Reckitt Benckiser Posts Gains in 2Q

Reckitt Benckiser Plc, the world’s largest household cleaning products group, reported a higher-than-expected 21% rise in second-quarter net profits on Thursday and raised 2002 profit and sales targets.

The Anglo-Dutch firm, which sells Finish/Calgonit dishwasher products, Lysol disinfectant and Dettol antiseptic, said after a strong first-half of 2002 it had raised its target for 2002 net profit growth to 18% from 12-15% previously.

Chief executive Bart Becht said it will also target the upper end of its 4-6% range for net revenue growth in 2002, after seeing sales growth, at constant exchange rates, of five percent in each of 2002’s first two quarters.

He added that with Reckitt set to be debt-free by the end of 2002, the group was now on the acquisition trail and could comfortably spend up to $1.5 billion, but if no deal materialized it would return cash to shareholders.

Mr. Becht said growth in Western Europe and North America, which accounts for 70% of sales and 90% of profit, more than offsetting the slowdown in Latin America and Asia Pacific.

“The new targets are clearly based on results to date, with a 21% rise in second quarter profits indicating that for the remaining part of the year an 18% rise is justified,” Mr. Becht said.

Reckitt Benckiser is continuing to launch a host of new products this year such as automatic dishwasher gel capsules, Airwick glowing candles and Harpic Powerons Gel. Mr. Becht said acquisitions were likely to come in household goods and the “functional side” of personal care. Analysts expect Reckitt may enter the auction for the household insecticide arm of Germany’s Bayer AG, and Pfizer’s Schick-Wilkinson Sword shaving business.

“We are always looking at acquisitions, and clearly we are in the insecticide business,” Mr. Becht said, adding that shaving would fit his definition of functional personal products.