Top story

Dettol and Durex owner Reckitt Benckiser (RB) has reported a “good” start to the new financial year with like-for-like sales rising 5% in the first quarter.

The group’s performance in the quarter was led by 10% growth in the health division, the fifth consecutive quarter of double-digit growth, despite some retailer de-stocking because of the weak cold and flu season in the US and Russia.

Reckitt said there were also good performances from Durex, Gaviscon and Strepsils in the period.

Developing markets recorded double-digit growth in like-for-like sales (+10%) in for the third straight quarter, with North America lagging at just +1% growth as a result of the cold and flu de-stocking. The rest of Europe and North America grew at 5%.

CEO Rakesh Kapoor said:

“We had a good start to the year despite continued challenging market conditions. We are pleased to see growth across both developed and developing markets as we pursue our strategy of focusing on the health and hygiene powerbrands in our key powermarkets, supported by continued investment in innovation.

“Our consumer health brands have again outperformed. In hygiene, the performance of the brands was variable.”

He added Reckitt was on track to achieve its full-year like-for-like net revenue growth of 4%-5% and moderate operating margin expansion.

Morning update

Shares in Reckitt have nudged up 0.7% to 6,779p after the markets opened today on the back of the solid first quarter. Sainsbury’s (SBRY) has opened 1% down at 282.12p after news emerged at the weekend that a consortium involving the biggest shareholder in Formula One, the Qatar Investment Authority and the owner of Canary Wharf abandoned secret plans to launch a takeover bid for the supermarket.

Ocado (OCDO) has also tumbled 0.8% to 331.5p, Morrisons (MRW) is down 0.9% to 193.1p and Tesco (TSCO) has managed to escape the downward trend to rise 0.2% to 180p.

The FTSE 100 has also opened down 0.4% this morning to 6,316.35 points.

Stock Spirits Group CEO Chris Heath has finally bowed to shareholder pressure and announced he is stepping down from the helm of the listed drinks business with immediate effect. Independent non-executive Miroslaw Stachowicz serve as interim CEO until a replacement is found.

Western Gate, the investment vehicle of Portuguese businessman Luis Amaral, has been calling for Heath’s removal over worries about the group’s strategy to turn around the challenged Polish operation. Stock Spirits announced it had appointed a new head for the Polish division last week. Chairman David Maloney said: “The board and nomination committee have been discussing executive succession plans for several months and I appointed an international search firm in early February this year to help identify a new CEO. I also discussed this directly with Chris.

“Our plan was to ensure that we had a new Polish managing director in place before initiating any other changes to avoid further uncertainty. We were delighted to announce the appointment of Marek Sypek as managing director, Poland last week. But Western Gate’s actions have clearly interrupted our careful planning and so we decided to accelerate the CEO process.”

John Menzies CFO Paula Bell is set to resign from the group to join the board of Spirent Communications in the same role. She has agreed to remain with John Menzies until 29 July to help with the handover to Giles Wilson, who will join as CFO on 1 July. Wilson has been with the group for five years in a variety of senior roles including finance director of Menzies Aviation. Most recently he has been based in Dubai as senior vice president of the Middle East, India and African regions.

This week in the City

Tomorrow kicks off with the first half results from Primark owner Associated British Foods (ABF). Analysts at Bernstein expect continued negative reported sales growth of -1%, driven by slowing growth at Primark along with continued decline in the food businesses. However, food, including the challenging sugar division, should see improving profitability.

Tuesday also bring a quarter one earnings update from Danone and the annual general meeting of McColl’s.

There are more AGM’s on Wednesday and Thursday from Unilever and Fever-Tree respectively.

Topics