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Consumer health giant Reckitt Benckiser (RB) has posted a “slow” start to the year, with overall first quarter like for like growth of just 1%.

Growth in the consumer health markets slowed to the lower end of its 3-5% medium term expectations, due to “seasonal factors” and lower growth in the China infant nutrition market.

First quarter net revenues it its health division, which accounts for 61% of total revenues, were flat on an organic basis at £1.94bn with volumes down 4% reflecting seasonal over the counter weakness and retailer destocking.

Like for like growth in its Hygiene Home division was 3% to £1.22bn, with volumes down 1% and price/mix up 4%. The growth was due to strong performances from its Finish, Vanish and Harpic brands.

Despite the weak sales growth, Reckitt said it remained on course to hit its full year net revenue growth target of 3%-4%, with growth weighted towards the second half.

CEO Rakesh Kapoor commented: “As expected, Q1 saw a slow start to the year, especially in OTC. We expect to see improving growth in the remainder of the year, particularly in H2.

“Our health business unit was impacted by the unusually weak cold and flu season across US and several European markets and associated retailer inventory movements. While our seasonal products declined, Nurofen and Gaviscon delivered good growth from a combination of recent innovations and quality base products.

“Our Hygiene Home portfolio continues to perform strongly (+3%) from the executional focus of a dedicated business unit. Finish, Vanish, Harpic and Veja all performed well, driven by innovation-led growth. This more than offset some weakness in Air Wick and Lysol which faced tough comparators.

“Restoring outperformance in our Health business unit remains our top priority as we target innovation-led growth, invest and outperform in e-channels, invest behind the equities of our brands, and build a more resilient business.”

Reckitt shares have dropped 1.4% in early trading to 6,047p.

Morning update

On another busy morning, McBride (MCB) has announced that CEO Rik De Vos is to leave the company.

It said a search will commence immediately and De Vos has advised the board that he will remain in position while his successor is being recruited.

Chairman John Coleman said: “Rik has brought a strong vision and laid the foundations of the Company’s transformation through the “Manufacturing our Future” strategy.

“I would like to take this opportunity to thank him on behalf of the board and colleagues for his contribution. I would also like to thank Rik for agreeing to assist the board to ensure a smooth handover of his responsibilities.”

De Vos added: “In recent years, we have achieved much in a challenging trading environment. We have developed a clear strategy in “Manufacturing our Future” and delivered clear benefits from implementing the “Repair, Prepare, Grow” phases.

“However, I now consider that the group requires different leadership to deliver the next phase of its growth ambitions. I’m confident that I will be leaving McBride well positioned to realise these ambitions.”

McBride added that, following a weak third quarter trading period, the group now anticipates that its full year earnings will be modestly lower than current market expectations, primarily as a result of weaker than expected sales activity in Germany, France and Italy.

Elsewhere, Irish food group Kerry Group (KYGA) has reported a 10.3% jump in first quarter revenues driven by volume growth and acquisitions.

Volume growth in the period was 3.3% and acquisitions contributed 4.7% to growth and favourable currency translation a further 2.5%, while prices on average edged down 0.2% due to lower raw material prices.

Group trading profit increased by 10bps, reflecting a 10bps improvement in Taste & Nutrition, an adverse 10bps in Consumer Foods and increased net investment in its KerryExcel programme.

Kerry’s nutrition and wellbeing technology portfolio had a strong performance in the period, with volume growth of 3.8% driven by meat, snacks and dairy end use markets.

In North America, Kerry’s meat business enjoyed another strong quarter with volume growth of 2.6%, as it innovated to meet consumer demands for new regional flavours, cleaner labels, natural shelf-life preservation and plant-based alternatives.

European volumes were up 2.4% as it delivered a strong performance in its beverages portfolio, with “good” growth in meat and snacks.

Its consumer foods business posted more modest volume growth of 0.8%, with pricing down 0.3% and trading profit margin down 10bps impacted by Brexit risk mitigation costs. Kerry said the division had a “solid performance in the context of a subdued marketplace”.

Its Richmond brand had solid growth particularly with chicken sausages, along with the Denny brand in Ireland, but the traditional spreads category continued to be challenged.

CEO Edmond Scanlon commented: “We have made a solid start to the year with overall business performance in line with expectations. The group continued to deliver volume growth ahead of the market while expanding trading margin.

“We are pleased with our innovation pipeline and the continued enhancement of our product mix. Our industry-leading business model and unique taste and nutrition positioning continue to deliver significant value for our customers in meeting rapidly evolving consumer needs. The recently announced acquisitions have performed very well and we are pleased with the progress made on their integration.

“In summary, we are encouraged by our progress in the quarter and reaffirm our full year 2019 guidance of adjusted earnings per share growth of 6% to 10% in constant currency.”

European Coke bottler Coca-Cola HBC (CCH) has delivered a “strong” first quarter of volume and revenue growth and proposed a special dividend as a result of its good performance. 

The group delivered FX-neutral revenue growth of 4.7% in the first three months of the year, driven by a 3.5% rise in volumes despite a 90bp headwind from the late Easter.

Established segment volumes grew by 0.2%, with ongoing growth in Ireland and Greece and a notable improvement in Italy despite the Easter impact.

Developing markets segment volumes grew by 2.6%, while its emerging markets segment saw volumes grow by 5.7% with encouraging volume growth in Nigeria and continued strong results from Russia, Romania and Ukraine.

FX-neutral revenue per case increased by 1.1% as better pack mix, and the benefits of price increases in the second half of 2018, more than offset dilution from the discontinuation of Brown-Forman Spirits distribution in Russia.

CCH said that “following several years of strong financial performance and good progress towards our 2020 growth targets” it is proposing a special dividend of €2.00 per share, amounting to a total of approximately €730m.

CEO Zoran Bogdanovic commented: We have started the year well, delivering solid growth in revenues despite the impact of this year’s late Easter. Volume growth accelerated compared to last year and our ongoing revenue growth management initiatives continue to deliver improvements in price/mix.

“This good start sets us up well to deliver on our plans and make 2019 another year in which we achieve FX-neutral revenue growth above our targeted range with another step up in margins.”

Carlsberg has posted organic net revenue growth of 6.4% in the first three months of 2019, driven by pricing, volume growth and acquisitions.

Organic growth was boosted by price/mix growth of 3%, which was positive across all regions, and total organic volume growth of 3.4%.

Reported growth was 9.3% in the period to DKK13.9bn, boosted by acquisitions (+2.6%) and currencies (+0.3%).

Tuborg volumes were up 7%, the Carlsberg brand up 2%, Grimbergen up 4% and 1664 Blanc jumping 30%.

Craft & speciality volume growth was 18%, while alcohol-free brew volume grew by 15%.

Carslberg expects to post a mid-single-digit percentage organic growth in operating profit in 2019, and is likely to experience a currency-related translation impact on operating profit of around DKK150m, based on the spot rates at 1 May.

CEO Cees ’t Hart commented: “We had a good start to the year, with particularly strong volume growth in Asia and continued solid progress of our craft & speciality and alcohol-free portfolios, which improved the price/mix. We are maintaining our full-year earnings expectation.”

On the markets this morning, the FTSE 100 is down another 0.4% so far to 7,356.9pts.

McBride shares have sunk 8.4% to 96.4p on the warning over full year earnings and CEO departure. Kerry Group is up 1.7% to €100.09 and CCH is up 1.9% to 2,775p.

Other risers include Premier Foods (PFD), up 0.6% to 35.6p and Glanbia (GLB), up 0.4% to €16.36.

Fallers include Marks and Spencer (MKS), down 1.7% to 285.2p, Applegreen (APGN), down 2% to 456p, Stock Spirits (STCK), down 3.2% to 227p and PayPoint (PAY), down 3.3% to 1,002p.

Yesterday in the City

The FTSE 100 fell back 0.4% to 7,385.2pts yesterday.

Sainsbury’s ended the day up 3.9% at 231.2p as underlying profit growth outperformed market expectations despite a 0.2% fall in group like for like sales and a 41.6% drop in pre-tax profits from £409m to £239m due to exceptional one-off costs.

Other risers included PZ Cussons (PZC), up 2% to 209p, Marks & Spencer (MKS), up 1.5% to 290.1p, Fevertree Drinks (FEVR), up 1.3% to 3185p and Ocado (OCDO), up 1.1% to 1,378p.

Fallers included British American Tobacco (BATS), down 2.1% to 2,927.5p, Greencore (GNC), down 1.1% to 227.5p, Reckitt Benckiser (RB) down 1.1% ahead of its first quarter update this morning to 6,130p and Imperial Brands (IMB), down 1.1% to 2,410p.

Nichols (NICL), which accounced yesterday that total group revenue for the first quarter of 2019 was £30.6m, up from £27.8m in the same period last year, fell 0.8% to 1,767.5p.

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