Reckitt’s Korean scandal takes toll and sales hit dampens City hopes
CONSUMER goods giant Reckitt Benckiser was among the heavyweight London companies whose results disappointed investors today, pouring cold water on a rally in equities.
Shares in the Dettol-to-Durex group fell 257p, or 3.5%, to 7070p as it missed analysts’ third-quarter sales forecasts with 2% organic growth, forcing it to reveal full-year like -for-like sales growth would be at the lower end of its 4%-5% guidance.
The company confirmed a boycott of its products in Korea was largely to blame for the sales slide after chemicals used to sterilise humidifiers killed almost 100 people. Chief executive Rakesh Kapoor apologised this year and was attacked by angry relatives in Seoul over Reckitt’s role in the scandal.
Today, it said Korea lowered its likefor-like sales growth by around 1.5% in the third quarter.
The disappointing update, along with a profit warning from Travis Perkins, made investors nervy and the FTSE 100 drifted 13.75 points lower to 6986.31.
Miners kept away from the red flashing on trading screens after third-quarter GDP growth in China remained at 6.7%. Reassuring signs the economy of the world’s hungriest consumer of industrial metals is stabilising lifted Anglo American 26p to 1055.5p. Bar- clays, up 2.35p at 176.35p, was the only bank on the rise after Investec’s banking guru Ian Gordon predicted it would avoid the earnings doom and gloom next week. Gordon’s forecasts of £1.7 billion for Barclays’ underlying pre-tax profits in the third quarter would be 33% more than other City analysts are expecting and prompted an upgrade to buy.
Motorpoint’s ambitions of driving into the FTSE 250 took a blow as the used cars dealer issued a profit warning, five months after its £200 million float. The shares, which listed at 200p, lost 34p to 133p after it warned investment in margins, prompted by Brexitinduced uncertainty, will hit profits.
GW Pharmaceuticals, which is developing cannabis-based epilepsy treatments, disappointed the City when it said it would cancel its shares from AIM to cut costs and keep its listing of American Depositary Receipts on New York’s Nasdaq. GW fell 14.99p to 838.01p.
AIM tiddler Cluff Natural Resources soared 1.85p, or 42%, to 6.3p as it revealed prospective gas resources of up to 4.75 trillion cubic feet at its North Sea block.
@jamienimmo63