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Persistent Covid-era disinfectant demand boosts Reckitt Q1 sales

Naomi Ackerman
·2-min read
<p>Reckitt was recently announced as the official hygiene partner for the COP26 climate summit in Glasgow this autumn</p> (PA)

Reckitt was recently announced as the official hygiene partner for the COP26 climate summit in Glasgow this autumn

(PA)

Reckitt saw revenues rise above expectations in the first quarter amid continued "very strong" disinfectant demand, despite a slump in performance in its health arm.

The consumer goods giant, maker of Dettol and Lysol, said in a trading update on Wednesday that first quarter like-for-like revenues rose by 4.1%. Hygiene product sales surged by 28.5% - accounting for 47% of net revenue in the period and driven particularly by Lysol demand in North America.

Reckitt was also recently announced as the official hygiene partner for the COP26 climate summit in Glasgow this autumn.

But like-for-like health division sales were down 13% on Q1 2020, which Reckitt bosses put down to manic stockpiling of its Lemsip, Nurofen and other products this time last year - and low demand for cold and flu products due to lockdowns, which have seen infections plummet worldwide.

The Slough-based company said "demand for cold and flu relief products [were] impacted by an exceptionally weak season", but added that the division is being helped by double-digit growth in Durex sales "driven by easing of social restrictions" in China.

Nutrition sales were down 7.4% on the same period a year earlier. The company said the strategic review of its China baby formula business is "processing well" and that it will update the markets "when appropriate".

Total first quarter net revenue was £3.5 billion, down 1.1% on a reported basis on the same period last year, which Reckitt put down to foreign exchange effects.

The group said it continues "to expect to deliver mid-single digit revenue growth in the medium-term".

Chief executive, Laxman Narasimhan, said the results bring "two-year growth to over 17% as we lap the pantry loading of March 2020" and that his team is "closely tracking shifts in consumer behaviour to understand supply and demand trends" in its sectors as countries emerge from Covid restrictions.

He added that bosses "expect the difficult current market conditions for our cold and flu relief products to improve over time".

Laura Hoy, equity analyst at Hargreaves Lansdown, said: "When you considerate fact that Covid-related pantry-stocking began this time last year, any growth at all is impressive. Compared to 2019 levels, revenues is up more than 17%."

Shares fell 1.4%, or 92p, to 6494p, on Wednesday morning.

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