Soft water supports strong profits

Demand for soft water, smooth legs and freshly-smelling air helped household products giant Reckitt Benckiser raise forecasts and post profits up 65%.

The achievement of these new targets will firmly establish the turnaround of the business

Bart Becht, chief executive

The Anglo-Dutch firm said strong revenue from limescale-remover Calgon, Veet depilatories and Air Care products helped net revenues reach £786m between July and September, a year-on-year rise of 8%.

And cost savings achieved through a restructuring drive are being reaped earlier than expected, said the company, which was formed in December when struggling UK stalwart Reckitt & Coleman took over Dutch rival Benckiser.

The firm, which also owns brands including Dettol, Disprin and Lemsip, has already exceeded its £38m savings target for 2000, its latest profits statement said on Wednesday.

'Platform for growth'

Chief executive Bart Becht said the firm was set to beat its 5% growth forecast for the year, confirming that Reckitt's dark days were behind it.

"The achievement of these new targets will firmly establish the turnaround of the business and create a solid platform for future growth and value creation," Mr Becht said.

But some analysts reacted warily to the figures, with ABN Amro downgrading the firm from "buy" to "add".

Shares in Reckitt Benckiser, which have outperformed the FTSE 250 index of middle-ranking firms by 66% since the beginning of the year, closed 33.5 pence lower at 923p in London on Wednesday.

The firm's pre-tax profits rose to £86m in the third quarter of the year, supported by strong growth in the Latin American and Asian markets, Wednesday's statement showed.