Footcare division a drag on Reckitt

CONSUMER GOODS maker Reckitt Benckiser reported lower than expected quarterly sales growth on Friday, hit by weakness in its Scholl footcare business and negative pricing.

The firm, which employs 1,200 employees at its Hull operations, said like-for-like sales rose 2 per cent in the first quarter. Analysts had been expecting a rise of 2.6 per cent.

The company, which owns a suite of household brands including Durex, Dettol, Clearasil and Gaviscon, said it had been hit by “significant underperformance” at Scholl. The footcare brand brought down sales in Reckitt’s health division, more than offsetting gains from Durex sales.

Reckitt is expecting further weakness from Scholl in the short term, but is taking action to bring forward other projects to balance the business.

Despite missing targets, Reckitt reassured investors that it is on track to increase its likefor-like full year revenues by between 2 and 3 per cent.

Reckitt bought nutrition specialist Mead Johnson last year and said the integrated business had performed well in China.

The company did not explicitly refer to its recent decision to pull out of a bid for Pfizer’s health business, which followed on from Johnson & Johnson’s decision to walk away from the doomed auction.

However, Rakesh Kapoor, Reckitt Benckiser’s chief executive, said the company is not looking to grow through further acquisitions.

Mr Kapoor said: “Our priority remains organic growth under our new focused organisation structure. The integration of Mead Johnson is going well.

“We have work to do in parts of our health portfolio, particularly Scholl.

“I am very pleased to see such energy, focus and a strong start by the hygiene home team.”