- Full-year revenue £14.6bn, up 3.5% LFL (Q4 fell 1.2%)
- Underlying operating profit down 1.9% to £3.4bn
- Full-year dividend 192.5p, up +5%
Matt Britzman, equity analyst, Hargreaves Lansdown:
“Reckitt’s fourth quarter missed the mark. Performance across pretty much all business areas was weaker than expected. The one positive to take away was an outlook that remains broadly in line with expectations, but investors will likely be disappointed with how the year ended.
It was a year when price hikes did all the work, with volumes taking a hit in the process. Cleaning and disinfectant brands like Lysol and Finish are back in growth mode after suffering from a post-pandemic rebase in demand. However, sales of over-the-counter cold and flu medicines were lower than usual in the final quarter, and the baby formula business in the US is still adjusting after competitor supply shocks in the previous year inflated sales. That rebase is expected to continue into the first half of 2024 before returning to growth in the second half. The positive news on this front is that Reckitt has been able to retain some of the market share it gained during the prior year.
Work to improve gross margins has yielded some results over the year and investment to reduce the fixed cost base is ongoing. The real question mark is around when volumes will start to turn positive as cost cuts can only support margin growth for so long.”
