Reckitt reiterates target as profit grows

26th Jul 2010 07:31

Reckitt Benckiser posted a rise in half-year profit and confirmed its full-year target after agreeing a £2.5bn bid for foot care and condom firm SSL last week.However, shares in the Anglo-Dutch household goods firm dropped after the group warned that growth in its European markets had virtually disappeared.Chief executive Bart Becht told a conference call: "Six months ago we were seeing 4% growth in our markets in Europe now it is below 1 percent (...) In Europe there is now virtually no market growth."Pre-tax profit rose to £971m in the six months ended 30 June compared with £816m last time on net revenue up 6% to £4.06bn, thanks to good growth in developing markets and the success of new Powerbrand product initiatives such as Lysol No Touch and Air Wick Aqua Mist. The board declared a 16% increase in its interim dividend to 50.0p per share.Reckitt still sees full-year net revenue growth of 5% and operating profit growth of 10%, both at constant exchange."For the total group, we are confident of delivering another year of good growth in 2010, notwithstanding potential generic competition to Suboxone in the US," said chief executive Bart Becht.The acquisition of SSL has long been rumoured and some investment analysts are asking why it is taking place now, though the answer may simply be that the decline in the value of sterling has made SSL very attractive to US companies such as Johnson & Johnson and Colgate-Palmolive.