Hargreaves Lansdown sees increasing headwinds at Reckitt Benckiser

12th Feb 2014 10:03

Hargreaves Lansdown Stockbrokers has said that 2013 results from Reckitt Benckiser's were in line with expectations, but headwinds have increased for the consumer products group .The company, which owns brands such as Cillit Bang, Nurofen and Durex, said that net revenue at constant currency excluding the struggling RB Pharmaceuticals (RBP) division was up 7% at £10.04bn in 2013. Like-for-like sales excluding RBP improved by 5%, with growth led by the Health and Hygiene divisions after recent investments.However, Reckitt said that the trading environment is now tougher than it was at the beginning of last year, "particularly in some emerging markets", where growth continues to slow.It said that constant currency revenue growth would slow to 4-5% in 2014, while margins would also be flat to slightly higher. Both targets exclude RBP."In all, headwinds for Reckitt have clearly increased. However, a potential move to a full Health and Hygiene business remains attractive in the still uncertain global economic environment," said Hargreaves Equity Analyst Keith Bowman."For now, with the shares having outperformed the FTSE-100 index by a little under 9% over the last year and the future of its Pharma business still uncertain, analyst opinion currently denotes a 'hold'."Bowman added that the uncertainty surrounding RBP persists and will be a "tough potential sell for management" given that a strategic review is taking place against a 20% fall in full-year operating profit at the division in 2013.Reckitt was trading 0.8% higher at 4,865p by 10:02.BC