Reckitt Benckiser’s sales warning is a product of mixed priorities | Nils Pratley :-: the Guardian
The previously lean machine behind Dettol and Durex has bet its future on branching out and sceptici..
The previously lean machine behind Dettol and Durex has bet its future on branching out and scepticism is the right response
Reckitt Benckiser, the Dettol to Durex empire, has enriched its investors splendidly over the past decade – the shares have travelled from £27 to £68 – but the engine now seems to be spluttering. The third-quarter update delivered a second sales warning of the year. Like-for-like revenues will be flat in 2017, which hasn’t happened in any year since the company was created in its current form in 1999.
Chief executive, Rakesh Kapoor, can grumble about “a continuing challenging market environment” but Reckitt is also underperforming against its peers. In normal circumstances investors might shrug, remember the virtue of patience and trust Kapoor’s long-term record. It’s not an unreasonable view, but Reckitt has more on its plate these days.
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