26 April 2023
If you are covering Reckitt Benckiser’s results, please see the following comment from Chris Beckett, head of equity research at Quilter Cheviot:
"Ultimately Reckitt’s numbers are good considering the economic backdrop. There are two things that are interesting points to note in the company’s results, firstly we are still only a year on since the US was suffering a big wave of Covid variant Omicron during which sales of disinfectants were soaring, therefore the year on year comparisons this year do not look positive for these products. Against this more people are catching flu and colds as handwashing and sanitising covid habits fade. The company is late into the reporting cycle so all of this was largely as expected.
"The other interesting point is rival Abbot, which produces baby powder among other products, attracted negative headlines when its baby powder was linked to serious bacterial infections in at least four infants. This caused the company to have to close down factories and Reckitt’s capitalised on this through increased sales of its own baby powder. The whole industry is understocked at the moment and the company has enjoyed the beneficial effect of having to rebuild inventory but this is likely to peter out soon.
"Elsewhere, the company has announced, Kris Licht as new CEO after a seven month search. Licht is an internal appointment so it begs the question why it took so long for the company to announce his new role. The optics of it do not look good and you might speculate that the company wanted someone external but ultimately could not find someone willing or come up with the renumeration package that attracted the right talent. Whatever way you cut it a seven month wait to announce an internal hire doesn’t smack of a vote of confidence."
