Reckitt Benckiser cleans up as its new products boost sales

Reckitt Benckiser, the household goods heavyweight behind brands such as Cillit Bang and Dettol, delivered better-than-expected first quarter figures yesterday and helped shares recover after recent losses.

News of a 5 per cent hike in like-for-like sales and 15 per cent rise in underlying earnings saw the group further recover ground lost following last week's shock announcement that chief executive Bart Becht is to retire after 16 years.

Shares slumped 7 per cent when it revealed Becht - credited with driving rapid growth at the group since the 1999 merger of Reckitt & Colman and Dutch group Benckiser - is to stand down in September.

But the stock closed 4 per cent higher last night as Reckitt's developing markets once again offset tougher UK and European trading.

Group underlying operating profits rose to 530 million, driven by a 14 per cent leap in like-for-like sales across developing regions.

The firm also said recent product innovations, such as Dettol No Touch, helped increase sales.

But Europe, which accounts for 45 per cent of revenues, failed to deliver sales growth as a weaker performance from fabric care and dishwashing brands held back strong progress in health and personal care.

The group is planning for a 4 per cent rise in like-for-like net revenues this year and profit growth ahead of that - excluding its recent acquisition of Durex and Scholl firm SSL.

But Reckitt has warned of possible downward revisions to this year's targets if generic competition emerges for its heroin substitute Suboxone in the US. The group is shifting sales towards a new patent protected version of Suboxone to head off the threat to its tablet-based treatment.

Reckitt also faces an 89m lawsuit from the National Health Service relating to claims it engaged in anti-competitive behaviour involving its heartburn medicine Gaviscon.