Reckitt profit rise falls short of expectations

9th Feb 2011 07:03

Reckitt Benckiser, the maker of household products such as Dettol and Cillit Bang, enjoyed strong profit growth in 2010 as developing markets offset a decline in Europe, but earnings fell short of expectations and the shares fell.The company, also responsible for Nurofen headache pills, posted a profit before tax for the 12 months of £2.14bn, up 13% from £1.89bn in 2009. Revenue was up 9% at actual exchange rates, or 7% at constant rates, to £8.45bn. Both were a touch below consensus estimates.Sales were up 18% to £1.88bn in developing markets, with growth everywhere, but net revenue fell by 1% in Europe to £3.43bn and was flat on a like for like basis.Like-for-like net revenue growth for the group was 6%, excluding last year's £2.5bn acquisition of condom and footcare group SSL, and net income rose 15% at constant currency to £1.66bn.In 2011, the firm wants 4% like-for-like net revenue growth, excluding SSL, with profit growth "ahead of that". The industry is currently showing no growth. It's also after 12% net revenue growth for the whole group and 10% adjusted net income growth, both at constant exchange. But Reckitt warns that its targets exclude the potential impact of generic competition to heroin substitute Suboxone in the US, and will be adjusted downwards if generic competition does emerge.The final dividend goes up 14% to 65p a share, taking the payout for the year to 115p, up 15% on 2009.