Dettol firm Reckitt slumps after ‘unsatisfactory’ sales drop

Dettol and Durex maker Reckitt has revealed an “unsatisfactory” drop in sales over the latest quarter and pointed towards more modest growth last year.

Shares in the household goods company slumped in early trading as it also revealed revenues for the past year were around £55 million lower than expected due to a discrepancy in financial reporting in the Middle East.

It said compliance procedures found “an understatement” of trade expenses for the fourth quarter and prior quarters of 2023, which have also impacted upon adjusted profits by around £35 million.

“Following investigation, we concluded a small group of employees had acted inappropriately and we are taking necessary disciplinary action,” the company said.

“We are confident this is an isolated incident specific to these two markets and does not impact our 2024 outlook and medium-term goals.”

2023 was a year of progress. We delivered good trading performances in Health and Hygiene. Nutrition began rebasing & held market leadership in the US. Our innovation platforms proved they can deliver meaningful growth https://t.co/yo7rsdeIOy#ThisIsReckitt $RKT pic.twitter.com/35vBg6UlYP

— Reckitt (@ThisIsReckitt) February 28, 2024

It came as the group, which also makes Nurofen and Gaviscon, said like-for-like net revenues fell by 1.2% over the final quarter of 2023, with overall net revenues down 7% to £3.56 billion.

This included a 2% decline in its health division as it was impacted by the “phasing and shape of cold and flu season”, while like-for-like nutrition volumes slid by 14.8%.

Kris Licht, chief executive officer of Reckitt, said: “While our performance in Q4 was unsatisfactory, we look to 2024 and beyond with confidence.

“We target another year of mid-single-digit growth in Health and Hygiene, driven by a more balanced contribution from price, mix and volume.”

Reckitt added that like-for-like revenues for the full year were up 3.5% in 2023 against the previous year, driven by rises across its hygiene and health businesses.

The company said it now expects to deliver like-for-like revenue growth of between 2% and 4% next year.

Shares in the company were down 9.9% in early trading to 5,258p.