Top story
Annual revenues at Reckitt Benckiser have increased 9.2% to £14.5bn as the Dettol and Durex owner increased prices by almost 10%.
The hikes contributed to like-for-like growth of 7.6%, which was offset by a 2.2% decline in volumes.
Prices rose by 12% in the final quarter of 2022, with volumes falling 5.8% as lockdowns in China hurt the intimate wellness business.
Operating profits for the year increased 9.2% to £3.4bn, with operating margins expanding by 90 basis points to 23.8%.
CEO Nicandro Durante said Reckitt delivered “a year of strong growth” amid “a continued challenging environment”.
“We are now 28% larger than we were in 2019,” he added. “Our healthy balance sheet underpins our financial strength, and we are delighted to grow the dividend in 2022 with the aim to deliver sustainable dividend growth in future years.”
Reckitt guided towards like-for-like revenue growth of mid-single digits in 2023.
“We have a strong innovation pipeline in 2023, which will be supported by increased brand equity investment,” Durante said. “We remain fully focused on the delivery of our strategy, to protect, heal and nurture in the relentless pursuit of a cleaner, healthier world.”
Sales in the hygiene division declined 3.1% on a like-for-like basis in 2022 as Lysol struggled to compete against pandemmic highs, although the brand showed improvements in the final quarter.
The Health arm increased sales 14.7% thanks to strong demand and share gains in the over the counter portfolio, which includes Nurofen, and continued momentum for Durex and vitamins and supplements.
A 22.9% increase in nutrition was driven by the infant formula business in the US.
Shares in Reckitt opened 0.8% higher at 5,810p.
Morning update
Shop prices have continued to climb to new record highs in February, with food inflation accelerating to 14.5%.
The latest BRC-NielsenIQ shop price index revealed food prices increased from 13.8% in January, with fresh food inflation up from 15.7% to 16.3%, and ambient food inflation of 12.2%, up from 11.3%.
Non-food inflation rose to 5.3% in Feburary, compared with 5.1% in the prior month.
It pushed overall shop price inflation from 8% to 8.4%.
BRC CEO Helen Dickinson said price rises for gardening tools and petfood had affected non-food, while the weaker pound made fresh produce imports from Europe more expensive.
“While we expect to see the annual inflation rate reduce in the second half of this year, retail prices will remain high over the coming months,” she added. “Government must avoid any additional costs on business as this will jeopardise retailers’ ability to best support their customers and keep prices low throughout this cost of living crisis.”
Mike Watkins, head of retailer and business insight at NielsenIQ, said: “With more than half (56%) of UK consumers feeling they are in a worse financial position compared to a year ago and inflation still stubbornly high, many households are trimming back on non-essential spending.
“And as volume sales are down on last year, some retailers are having to work even harder to encourage customer spend, including additional price cuts or promotional activity. This likely to continue until consumer confidence starts to improve.”
Soft drinks group Nichols has increased revenues 14.3% to £144.3m in 2022 as Vimto continued to outperform rivals.
Adjusted pre-tax profits rose 14.5% to £25m, while the group moved from a £17.7m pre-tax loss in 2021 to a £13.8m profit.
It also held adjusted pre-tax profit margins steady at 15.1%.
UK revenues increased 13.7% to £127m in 2022, mostly driven by the continued recovery for the out-of-home channell post-pandemic.
International sales also rose 16.1% to £38m.
Nichols proposed a final dividend for the year of 15.3p, up 15% year on year.
Non-executive chairman John Nichols said: “Vimto continues to perform well both in the UK and internationally and despite ongoing inflationary pressures, which accelerated during the second half, the brand has ensured a robust financial performance for the group.
“In the UK we have again seen the brand outperform in dilutes and continued to make significant progress in the ready to drink subcategory.”
Just Eat Takeaway is forecasting further improvements in profitability in 2023 after posting adjusted EBITDA of €19m last year, compared with a €350m loss in 2021.
The group said all operating segments contributed to the return to the black, with largest gains in UK & Ireland, Southern Europe and North America.
Total orders in 2022 fell 9% to 984 million but increased prices helped the delivery service to hold gross transaction value steady at €28.2bn and increase revenues 4% to €5.6bn.
Active consumers also fell from 99 million to 90 million in 2022.
In the UK and Ireland, GTV remained stable at €6.6bn, while adjusted EBITDA improved significantly to €23m in 2022 from minus €107m in 2021.
CEO Jitse Groen said the priority in 2022 was to “enhance profitability and strengthen our business”.
“We expect a further improvement to adjusted EBITDA in 2023 and our ambition to create a highly profitable food delivery business is firmly on track,” he added.
Just Eat guided for adjusted EBITDA of about €225m in 2023 but didn’t give a forecast for GTV.
Irish nutrition group Glanbia has reported double-digit growth in annual revenues and profits.
Group revenues increased 21.2% to €5.6bn in 2022, while pre-exceptional EBITDA rose 13.5% to €347.1m.
Branded like-for-like revenue increased 14.6% in the Glanbia Performance Nutrition division, with prices 16.7% higher and volumes down 2.1%.
The Glanbia Nutritionals division increased like-for-like revenue by 12.8% on 16.1% pricing and a 3.5% decline in volumes.
Group managing director Siobhán Talbot said Glanbia had achieved its highest ever annual earnings performance despite unprecedented inflationary headwinds.
“Looking forward, our strategic focus on ‘better nutrition’ growth platforms is clear and we are confident that it will drive sustained growth in the coming years, delivering the targets set out at our recent capital markets event,” she said.
Glanbia also announced it had signed a non-binding memorandum of understanding for the sale of the plc’s holding in the Glanbia Cheese joint ventures to joint venture partner Leprino Foods.
The FTSE 100 is edging back towards the 8,000pts mark, rising 0.5% so far to 7,914.93pts.
Elsewhere this morning, Nichols shares responded well to the 2022 performance, rising 3.9% to 1,036.9p, while Glanbia soared 6.1% to €12.44.
Just Eat Takeaway spooked investors by omitting 2023 guidance for gross transaction value, sending shares crashing 5.5% to 1,709.6p.
Elsewhere, Naked Wines is up 3.2% to 113.7p and Hotel Chocolat is up 2.9% to 212p.
Other fallers included Virgin Wines UK, down 1.9% to 51p, and Ocado, down a further 1.6% to 539.9p.
Yesterday in the City
The FTSE 100 fell 0.6% to 7,884.52pts, not helped by a nosedive at Ocado.
Shares in Ocado tumbled 10.6% to 558.4p as the group reported a loss of more than £500m for the year.
Other fallers included McBride, which dropped 2.1% to 23.5p following first-half results in which the private label manufacturer warned of a continued spike in costs.
Wholesaler Kitwave, however, jumped 5.9% to 233p after reporting soaring full-year sales and profits.
Risers elsewhere included THG, up 4.3% to 57.8p, Associated British Foods, up 2.3% to 2,019p, and Marks & Spencer, up 2% to 161p.
The day’s other fallers included AG Barr, Diageo and Fever-Tree, down 1.6% to 552p, 1.6% to 3,542p and 1.3% to 1,066.2p respectively.
No comments yet