Reckitt boss eyes expansion in US as sales and profits leap

THE healthcare giant behind Nurofen and Durex used better than expected half-year figures to hint that it is back on the acquisition trail.

Reckitt Benckiser, which also makes Lemsip and Strepsils, walked away from paying £9bn for the consumer health business of Germany’s Merck last year, but said there would be consolidation in the industry.

Chief executive Rakesh Kapoor said: ‘It is a large attractive category [consumer health] where the top ten players control less than 30pc of the market. I do expect M&A to flow in this market.’

While the firm owns Nurofen, one of the UK’s leading painkillers, it is thought to be looking for an equivalent brand in the American market, with Advil a possible bid target.

Shares in Reckitt rose 1.44pc or 85p to 5993p after it credited a raft of innovations, strong sales of flu remedies and a spike in demand for bug spray in Brazil, for boosting sales for the six months to June 30 by 5pc.

Pre-tax profit rose to £921m from £838m on sales of £4.3bn.

It declared an interim dividend of 50.3p-a-share and increased its forecasts for the year.

The group is now targeting sales growth of 4pc-5pc, up from the 4pc previously forecast.

Much of the improvement is due to Project Supercharge, a cost-cutting drive that has triggered a £14m one-off charge, which includes redundancy payments. Kapoor refused to say how many jobs went and how many were lost from its Slough HQ.

The firm has faced a raft of fines from regulators during the year due to corporate governance issues, but Kapoor says this has nothing to do with the business being ‘leanly staffed’.

‘There is no correlation,’ he said. ‘We are appropriately staffed and take governance very seriously. The regulatory environment has been changing.’

He said that booming e-commerce in China was likely to be replicated around the world, and that maintaining growth in the developed markets at the same time as developing countries is key.