Reckitt surges to six-month high following Mead Johnson boost

CONSUMER goods giant

Reckitt Benckiser enjoyed its best day of trading in under-fire boss Rakesh Kapoor’s seven-year reign as it begins to reap the rewards from its huge Mead Johnson acquisition.

The Dettol and Nurofen maker had vowed to return to growth after a year of stagnation spilt over into its new financial year in its first quarter in April.

The company pulled out of its recent sales struggles and wowed investors by lifting its revenue target to 14pc-15pc. Its strong performance was driven by an uptick in demand from China for baby formula in its Mead Johnson division.

Ameet Patel, at Northern Trust Capital Markets, argued that the results suggest “a recovery is well under way”. He added that it was a “return to form” and vindicated the $17bn (£12.3bn) deal made last year.

Reckitt shares had slipped to their lowest level in over three years in April on another underwhelming update but stormed to the top of the FTSE 100 yesterday. The company jumped 499p to £68.10, a 7.9pc surge.

Reckitt’s climb to a six-month high accounted for nearly a third of the

FTSE 100’s 38.14-point gain to 7,701.31.

GDP growth hitting a four-year high in the US received a muted reaction on Wall Street. With the 4.1pc reading in line with economists’ expectations, the Dow Jones inched higher in early trade while European stocks outperformed, enjoying their fourth consecutive week on the rise. Elsewhere, publisher

Pearson climbed 33.6p to 957.4p on its operating profit recovering to £233m after it was all but wiped out last year.

The company’s “strategic repositioning is now largely complete” but investors will be waiting to be reassured by a bumper sales season for academic books in the second half of the year, Hargreaves Lansdown’s George Salmon commented.

William Hill failed to hold a 2.2pc gain after Peel Hunt analysts argued that the company’s responsible gambling drive could make the business “more sustainable” but hit earnings.

In an upgrade to “hold”, Peel Hunt told clients that the benefits from the liberalisation of sports betting in the US are still “a while off ”, as the FTSE 250 bookie slipped back 2.3p to 297.9p.

Energy provider SSE recovered from an early dip to edge up 3.5p to £12.64, despite being downgraded to “hold” by HSBC on increased risk from the planned demerger of its retail business.

Car dealership operator

Inchcape slumped 56.5p to 727p after HSBC downgraded it to “hold”, arguing that it was facing numerous headwinds.

IT security firm Sophos and shopping centre owner

Intu Properties enjoyed rebounds following their post-results slumps, recovering 29.4p to 499.4p and 5.8p to 170.8p, respectively. Administration firm Equiniti rallied 13p to 221p after beating City estimates in its interim results.