Disinfectant demand boosts Reckitt Benckiser's quarterly sales

Coronavirus concerns over hygiene and cleanliness have seen shares climb close to all-time highs

Article updated: 28 July 2020 12:00pm Author: Ian Forrest

  • Like-for-like sales rose 10.5% in the period, thanks partly to higher demand for disinfectant products such as Dettol, and the hygiene business saw a strong 19.4% rise
  • The shares eased back 1% in early trading, although they have strongly outperformed the market over the past six months and are close to all-time highs. Online presence accounts for 12% of sales and continues to deliver an alternative avenue of sales
  • Recommendation: Given the good momentum in the business we are content to maintain our ‘Hold’ recommendation for lower to medium risk investors

Reckitt Benckiser reported today that demand for its cleaning and disinfectant products had helped it achieve good growth in its second quarter, but also warned that there was more uncertainty about its prospects for the second half. Like-for-like sales rose 10.5% in the period, thanks partly to higher demand for disinfectant products such as Dettol, and the hygiene business saw a strong 19.4% rise. The company’s performance ahead of the coronavirus crisis was better than it had expected and a sharp 60% rise in online sales provided a good boost. These made up 12% of overall revenue in the first half. Investors will also be pleased to see that the dividend was maintained but the company made some cautious comments about the second half of the year, citing the uncertain macro-economic environment.

The shares eased back 1% in early trading, although they have strongly outperformed the market over the past six months and are close to all-time highs. These are better than expected figures from Reckitt today and confirm the general market view that they have performed well during the pandemic. The company believes the virus will be around for some time to come and hopes that many of the cleaning and hygiene habits widely adopted by people and companies will continue as a result. It remains to be seen if that is dented by a prolonged economic slowdown but, given the good momentum in the business, we are content to maintain our ‘Hold’ recommendation for lower to medium risk investors.


All information given including prices, yields and our opinion is correct at the time of publication. Our opinions on investments can change at any time and for our latest view please go to www.share.com. To understand how our Investment research team arrive at their views please read our Investment Research Policy.

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Ian Forrest

Investment Research Analyst

Ian’s background in investments, financial journalism and research has seen him advising private investors on equities and helping to manage portfolios. His qualifications include the Certificate in Financial Planning and the Chartered Institute for Securities & Investment’s Investment Advice Diploma.

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