Reckitt freshens profits and launches new products

RECKITT Benckiser, the world's biggest household cleaning goods group, today reported an 18% rise in annual profits to £905m and forecast further growth in 2008.

The company, which makes products including Air Wick Freshmatic air freshener and cleaner Cillit Bang, and employs about 800 people in Hull, said 2008 would also see the roll-out of new products across sectors which include fabric care, dishwashing and personal hygiene.

These include stain remover Vanish Oxi-Action Magnet, the launch of detergent Woolite All Textiles, a new range of Clearasil skin care products and the roll-out of improved Veet wax strips which will offer more effective body hair removal.

Another new product which will be rolled-out in the first half of this year is a Lysol/Dettol hand sanitiser which the company claims uses a formula used in hospitals which kills 99.9% of germs.

Net profit in 2007 increased to £905m, compared with analysts' forecasts of between £899m and £910m, on revenues of £5.26bn, which were up 10%.

Bart Becht, Reckitt Benckiser's chief executive, said the group was aiming for between 6% and 7% net revenue growth in 2008 and net profit growth of 10%.

Mr Becht said the successul integration of products following the acquistion of over-the-counter medicine business Boots Healthcare International (BHI) had helped to boost performance.

Reckitt purchased the non-prescription drugs business in early 2006, adding Nurofen painkillers and Strepsils throat lozenges to its portfolio.

Reckitt also completed the purchase of Adams Respiratory Therapeutics last month for £1.1bn.

Mr Becht said: “Reckitt Benckiser had a great year in 2007 due to the success of its 18 'Powerbrands' behind new products such as Air Wick Freshmatic or Vanish Oxi Action Multi, and strong growth for the ex-BHI brands Nurofen, Strepsils and Clearasil.

“Profit growth was driven by strong gross margin expansion and BHI synergies coming in ahead of schedule.”

In the fourth quarter, net profit rose 2% to £292m on revenues of £1.37bn.

The group said net borrowings reduced from £660m to £125m in 2007 following a £300m share buyback scheme. It also intends to return a further £300m to shareholders through a share buyback scheme in 2008.

It will also pay a final dividend of 30 pence a share, up 20%, to give a year payout of 55p, up 21%.

The company, which can trace its history back to 1814, was formed in 1999 following a merger between Reckitt and Dutch business Benckiser.

Although headquartered in Slough, Berkshire, it has operations in 60 countries and employs more than 20,000 staff worldwide.