Spring clean helps Reckitt profits

Spring clean helps Reckitt profits

Household cleaning is one area of the economy showing no signs of slowdown, it seems.

Reckitt Benckiser, the world's largest home cleaning products group, has beaten profit expectations for 2002 and set itself further high targets this year.

The British company's products include Dettol antiseptic, Mr Sheen polish and Finish/Calgonit dishwasher powder.

However, its shares were knocked by news that one of the founding families was preparing to reducing its stake.

Buy-back?

Reckitt reported a 22% rise in profits for last year and said growth this year would see further strong gains.

"These targets demonstrate our commitment to shareholder value," said the company's chief executive, Bart Brecht.

Shares fell 8%, however, on news that JAB Investments was planning to cut its investment in the group from 24% to between 15-17%.

The group has come under pressure to return cash to shareholders after losing recent battles to buy units from drug giants Bayer and Pfizer.

Mr Brecht said on Wednesday that buying back shares was still being considered but that the company would not borrow cash to fund such a move.

Reckitt Benckiser was formed in 1999 when Britain's Reckitt & Colman bought Dutch-based Benckiser.

Convenient profit

A new management team has since been adding to the group's core stable of Lemsip cold treatment and Harpic toilet cleaner.

Sales of its ever-growing product range, which now include more convenience-driven items such as Lysol floor wipes, lifted profits to £408m in 2002 and sales by 7% to £3.53bn.

Analysts had predicted profits of £401-407m.

Reckitt said it expected profit growth to remain in double-digits for 2003, although it reduced its sales targets slightly from 6% to 4-6%.