Reckitt Repeats Outlook for Full-Year Profit As European Sales Decline

Reckitt Benckiser Group Plc, which last week agreed to buy the maker of Durex condoms, said second- quarter profit rose 21 percent as it sold more personal-care goods such as Lysol No Touch soap dispensers.

Operating profit climbed to 503 million pounds ($779 million) from 414 million pounds in the year-earlier period, the Slough, England-based company said today in a statement. That was more than the 486 million-pound average estimate of eight analysts surveyed by Bloomberg. Sales rose 10 percent to 2.06 billion pounds and the interim dividend was raised to 50 pence.

The maker of Nurofen painkillers and Lysol cleaners announced its plan to buy SSL International Plc for $3.9 billion as it attempts to overcome the slowdown in sales growth in Europe, its largest market. Sales there declined 1 percent in the first half due to “weakness” in fabric care, the company said.

Reckitt reiterated annual targets for 5 percent sales growth and 10 percent operating profit growth this year, excluding its pharmaceutical division.

“We see little prospect of the full-year targets being increased given ongoing competitive pressures and share losses in Western Europe and North America,” Bernstein Research’s Andrew Wood said before the release. He rates the stock a “market perform.”

Reckitt shares gained 43 pence, or 1.3 percent, to 3,336 pence in London trading on July 23. The stock has fallen 0.6 percent this year, compared to Procter & Gamble’s Co.’s 2.1 percent increase.

To contact the reporter on this story: Sarah Shannon in London at sshannon4@bloomberg.net.

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