Reckitt sees sales at top of the range

LONDON: British consumer goods group Reckitt Benckiser Group Plc said yesterday that it expected to post annual revenue growth at the top end of forecasts after demand for its brands such as Dettol and Strepsils helped it to post first-half sales up 6%.

The maker of Nurofen painkillers and Cillit Bang cleaners also said that it remained bullish on demand for its heroin addiction drug Suboxone, despite competition from cheaper versions in tablet form.

To boost growth Reckitt is putting greater focus on its fastest growing health and hygiene brands like Dettol, Strepsils and Durex, and is moving quicker into the key emerging markets of Brazil, Russia, India and China.

First-half sales rose 6% on a constant exchange rate to £5 billion ($7.7 billion), driven by a strong emerging markets performance. Adjusted earnings rose 7% to 118.3 pence a share.

Those figures compared with company-compiled forecasts of £5.1 billion and 118.75 pence respectively.

Reckitt said it was confident of achieving full-year group revenue growth at the upper end of a 5 to 6% range and raised its interim dividend by 7% to 60 pence per share.

The firm also said it continued to see strong patient and doctor preference for the film version of its heroin addiction drug Suboxone over tablets.

Shares in the company were hit badly this month when US health-care provider CVS CareMark Corp dropped the dissolvable film version of Reckitt’s heroin addiction drug Suboxone from its list of covered medicines in favour of a cheaper tablet. There are no guarantees that other prescription-management companies would not follow suit.

Some analysts fear Suboxone’s profit could fall sharply if other health-care providers now follow suit. Reckitt stopped selling the tablet version of the drug in the US in March.

Suboxone has faced competition from cheaper generic pills since February, although the company said that its film version — the only one it now supplies — had maintained its total share of prescriptions, which were continuing to increase at low double digit rates in the United States.