Innovation and investment still in play at Reckitt Benckiser, says Hargreaves Lansdown

28th Jul 2014 11:56

Reckitt Benckiser's first half results were "broadly in line", according to Hargreaves Lansdown.The household goods group reported revenue at constant exchange rates rose 3% to £2.3bn on a similar rise in underlying operating profit to £1.08bn.But underlying diluted earnings per share fell 4% to 113.4p and the group left its interim dividend unchanged at 60p.The consumer health business continued to grow but the home products business remained weak in challenging markets."A focus on health products continues to lead the way, enhanced by ongoing acquisitions, while the group's focus on product innovation and investment is still playing its part," said Keith Bowman, Equity Analyst at Hargreaves Lansdown Stockbrokers. "Less favourably, currency headwinds continue to take their toll, home products are battling against supermarket own-branded alternatives, whilst emerging markets such as India and Thailand continue to be challenging."The firm also unveiled plans to hive off its drug arm RB Pharmaceuticals into a separate UK-listed company, saying a stand-alone business could significantly increase long-term shareholder value."A separate listing of its Pharmaceutical business will leave management to focus on core growth arenas while potentially retaining an interest, whilst despite headwinds, the company remains on track to achieve its full year revenue growth target," Bowman said. "On balance, and given a 7% outperformance of the wider FTSE-100 index over the last six months, analyst consensus opinion continues to point towards a firm 'hold'."RD