UK’s sanitising obsession boosts sales at Dettol maker Reckitt Benckiser during Covid pandemic
The UK Government’s message of “Hands, face, space” during the Covid pandemic is still paying off for hygiene and cleaning products maker Reckitt Benckiser.
Reckitt Benckiser reported a higher-than-expected jump in quarterly sales as Brits kept up their heightened cleaning regimens a year into the Covid-19 pandemic, and the company backed its full-year outlook.
The pandemic boosted Reckitt’s sales to record levels last year, and today it said like-for-like sales at its hygiene business that sells Harpic disinfectants and Dettol sanitisers surged 28.5 per cent in the quarter.
However, it wasn’t all good news.
An almost non-existent flu season meant its health unit, which makes Strepsils and other remedies, saw sales fall 13 per cent.
Overall like-for-like sales across the company were up 4.1 per cent for the first three months of the year.
Shares dipped 1.8 per cent to 6,469p this morning.
Chris Beckett, head of equity research at Quilter Cheviot poured cold water on the FMCG company’s longer-term growth propects.
“Ultimately, Reckitt is a defensive company that has benefitted from the pandemic. It continues to invest in the business and as such we should see growth slow as it looks to increase its capabilities and competitiveness. As a result, it is not a stock that will benefit from the economic recovery, particularly given it has done well from the working from home trend.”
“Longer term, Reckitt has good brands and market positions and many Covid changes to consumer behaviour will persist beyond the pandemic. The stock currently trades on 21x this year’s expected earnings and offers a three per cent prospective yield. We think this is still attractive against its peers.”