Chinese rivals dent Reckitt sales

TOUGH competition against Durex condoms in China put a dent in revenues at Reckitt Benckiser.

In a gloomy set of final results for outgoing boss Rakesh Kapoor, the consumer goods giant reported falling like-for-like sales in Europe and Asia during the second quarter.

The ‘slow start to the year’ saw the firm, which also makes Cillit Bang cleaning liquid and Gaviscon tablets, downgrade its revenue forecasts for the full year from between 3pc and 4pc to between 2pc and 3pc.

A particular sore point was China, where Durex faced ‘challenges from local players’.

Sales of Reckitt’s baby formulas were hit by a decline in birth rates and a price increase affected its Dettol cleaner. That price hike has since been reversed.

Like-for-like sales in Europe fell 2pc. One bright spot was North America, where strong demand for baby formulas that claim to support brain development helped like-for-like sales rise 4pc.

But the disappointing performance sent shares tumbling 3.1pc, or 205p, to 6455p yesterday.

Kapoor, 60, exits in September to be replaced by PepsiCo executive Laxman Narasimhan.

The current chief executive said much of the poor performance was now ‘behind us’ and said his ‘RB 2.0’ plan – aimed at separating the health and hygiene units – would be complete by mid-2020.

Overall, revenues at Reckitt rose 2pc to £6.2bn in the three months to June 30 and operating profit rose 9pc to £1.4bn.

But shares fell 2.8pc, or 187p, to 6483p yesterday. Reckitt proposed to pay a dividend of 73p per share, up from 70.5p in 2018.