Reckitt disciplines staff over ‘misreporting’ trade figures
RECKITT, the owner of brands including Nurofen and Dettol, has taken disciplinary action against a number of employees for misreporting trade figures.
It caused its annual revenues to be £55million lower than expected.
The consumer goods giant said an internal investigation found that the employees had understated trade spending at two of its Middle Eastern businesses last year.
Chief financial officer Jeff Carr said “several employees have exited the business” following the investigation.
Reckitt believes the accounting issue was an isolated one as the individuals involved did not have any influence outside of their designated geographies.
At its full-year results, Reckitt said: “Following investigation, we concluded a small group of employees had acted inappropriately and we are taking necessary disciplinary action.
“We are confident this is an isolated incident specific to these two markets and does not impact our 2024 outlook and medium-term goals.”
Due to what Reckitt chief executive Kris Licht said was an “unsatisfactory” fourth quarter, its 2023 revenues rose by just 1.1% to £14.6billion. The 5.2% increase it saw in sales at its hygiene business was wiped out by a 2% decline at health and a 14.8% fall in its baby and infant nutrition division.
Additionally, its annual pretax profits tumbled 21.7% to £2.4billion after it was forced to take an £810million writeoff on the value of its baby formula and food businesses due to high interest rates and increased regulatory requirements in the US.
Russ Mould, investment director at broker AJ Bell said that Reckitt’s results show it is struggling with a “multitude of problems”, the biggest of which is cashstrapped consumers shifting to cheaper supermarket own-brand alternatives.
He added: “It reported declining health sales, a big drop in nutrition revenue and revealed that some employees had been up to no good with regards to accounting issues in the Middle East.
“Once seen as an industry leader, Reckitt has been a big disappointment in recent years and the latest results keep that theme going.”