Reckitt profits climb as SSL takeover drives revenues

Reckitt Benckiser: reports a rise in profits
Reckitt Benckiser: reports a rise in profits

Profits at Reckitt Benckiser rose by 4.7% to £486m in the first quarter of 2011, with the integration of SSL pushing total revenue up 14% compared to the same period last year.

Group revenue came in at £2.2bn in the first quarter of 2011. Reckitt acquired SSL, which makes Durex condoms and Scholl footcare products, for £2.54bn at the end of October last year.

The results are the first since the company announced last week that chief executive Bart Becht would retire in September and would be replaced by executive vice-president and global category manager Rakesh Kapoor.

Becht said: "Reckitt Benckiser got off to a strong start in the first quarter of 2011. Like-for-like net revenue growth of 5% was driven by the success of innovations, such as the Dettol No Touch, and continued excellent performance in Developing Markets."

Europe still accounts for 45% of group sales, but like-for-like sales were flat. Growth in health and personal care sectors were offset by declines in fabric care while dishwashing was flat.

North America and Australia accounts for 24% of revenue, and growth came from health and personal care, dishwashing and food. Profits increased by 20%, with growth driven by Finish Quantum dishwashing tablets, French's Yellow Mustard and Frank's Red Hot Sauce.

In developing markets, which account for 24% of revenue, profits soared by 31% on the back of the performance of the Dettol personal care range.

The pharmaceutical division accounts for 7% of sales, and growth came from buying back the rights to the drug Suboxone from Merck.

Becht said: "RBP [the pharmaceutical division] is making very good progress with moving more of its business into the patent-protected Suboxone sublingual film.

"By the end of March, the film had captured a 37% market volume share and represented 35% of the total RBP US net revenue in Q1. The integration of the SSL business is well on track to deliver the targeted cost synergies and net revenue growth in 2011."

Becht said he expected the group to meet company targets by year-end.

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