FTSE 100 movers: Reckitt powers ahead; Croda falls

By Frank Prenesti

Date: Wednesday 24 Apr 2024

(Sharecast News) - FTSE 100 8,049.18 0.05%
Consumer goods giant Reckitt Benckiser said on Wednesday that it was on track to deliver its full-year revenue and profit targets as it posted a rise in first-quarter like-for-like net sales.

In an update for the three months to the end of March, the Dettol and Lysol maker said LFL net revenue grew 1.5% to £3.7bn, with a volume decline of 0.5% and price/mix growth of 2%.

The hygiene segment saw LFL net revenue growth of 7.1%, with broad-based volume growth across Finish, Lysol, Harpic and Vanish.

In the health unit, LFL net revenues rose 1%. Reckitt pointed to strong volume growth across Intimate Wellness, non-seasonal over-the-counter brands, VMS and Dettol. This was offset by the expected lapping of prior year retailer inventory rebuild in seasonal OTC products.

In nutrition, however, LFL net revenue fell 9.9%.

Reckitt reiterated its 2024 guidance for LFL net revenue growth of between 2% and 4% for the group. It also continues to expect mid-single-digit growth for the health and hygiene portfolios and a mid to high-single-digit decline for the nutrition business.

Chief executive Kris Licht said: "We have delivered a good first quarter. Following a period of price-led growth, we are now returning to a more balanced contribution from price, mix and volume. We grew volumes in many of our powerbrands in the quarter, including Lysol, Dettol, Durex and Finish, as well as our non-seasonal OTC portfolio.

"In addition, we continue to benefit from carryover pricing and consumers trading up to our premium innovations.

"The net revenue performance in the quarter is in line with our expectations. Hygiene delivered broad-based growth. Health saw good growth across many brands, reduced by a tough comparator in our cold & flu OTC brands. Nutrition continues to normalise in the US as expected, and we have maintained our value market share leadership."

International distribution and services group Bunzl said revenue in the first quarter fell 2.4% on a constant currency basis, driven by lower volumes in its US foodservice redistribution business, American retail customers clearing inventory and deflation.

Adjusted operating profit for the first three months of the year was in line with expectations and the group held its profit guidance for the year. At actual exchange rates, group revenue declined by 5.9%.

Bunzl said it continued to expect to deliver slight revenue growth in 2024 at constant exchange rates, driven by acquisitions already completed in 2023 and 2024; with underlying revenue declining slightly. Group operating margin is expected to be slightly below the record level reported for 2023.

It added that Britain's Competition and Markets Authority had cleared its £399m purchase of an 80% stake in catering equipment firm Nisbets but the deal was still subject to clearance by the Irish competition authority which is expected during the first half of 2024.

Croda backed its full-year profit guidance on Wednesday despite a decline in first-quarter sales, as it hailed an "encouraging" start to the year for the consumer care business.

In an update for the three months to the end of March, the speciality chemicals company said group sales fell 10% at constant currency versus a strong prior year comparator, to £409m. On a reported basis, sales were down 14%.

Compared with the final quarter of 2023, reported sales rose 8% excluding lipid sales for Covid-19 vaccine applications in the previous quarter, and overall group results were "in line with expectations", it said.

Croda said that for 2024, it continues to expect group adjusted operating margin to be two to three percentage points lower than 2023, and adjusted pre-tax profit of between £260m and £300m.

Chief executive Steve Foots said: "Consumer Care has made an encouraging start to the year with growth across all business units and a significant improvement in North America. Life Sciences continues to experience more challenging market conditions, particularly in Crop Protection.

"Overall, we are on track to meet our previously stated group guidance for the full year. We are focused on executing our strategy, accelerating the conversion of our exciting Pharma pipeline, and investing for the future whilst carefully monitoring costs, with a clear set of priorities that will drive our near-term performance."

Mining stocks were mostly on the up, bouncing back after their recent underperformance following a jump in iron ore prices to a seven-week high. That was after Australian producer Fortescue reported that 2024 shipments would miss market expectations due to supply disruptions. Rio Tinto, Glencore and Anglo American were all performing well in London.

Bucking the trend was blue chip silver miner Fresnillo, falling 1% after reporting a drop in both gold and silver output over the first three months of the year.

Lloyds Bank shares rose despite a 28% fall in Q1 profits.

Market Movers

FTSE 100 (UKX) 8,050.52 0.07%

FTSE 100 - Risers

Reckitt Benckiser Group (RKT) 4,390.00p 3.29%
Scottish Mortgage Inv Trust (SMT) 851.60p 2.95%
BAE Systems (BA.) 1,378.50p 2.87%
Rio Tinto (RIO) 5,427.00p 2.07%
Anglo American (AAL) 2,151.00p 1.89%
Bunzl (BNZL) 3,102.00p 1.57%
InterContinental Hotels Group (IHG) 8,094.00p 1.20%
Diploma (DPLM) 3,602.00p 1.07%
Sage Group (SGE) 1,176.00p 0.90%
BP (BP.) 527.40p 0.82%

FTSE 100 - Fallers

Croda International (CRDA) 4,693.00p -3.99%
Ocado Group (OCDO) 364.60p -3.49%
Entain (ENT) 818.20p -3.38%
Burberry Group (BRBY) 1,135.00p -2.53%
Persimmon (PSN) 1,302.00p -2.44%
London Stock Exchange Group (LSEG) 8,810.00p -2.09%
Marks & Spencer Group (MKS) 257.60p -2.02%
SEGRO (SGRO) 854.00p -1.73%
Land Securities Group (LAND) 638.00p -1.62%
BT Group (BT.A) 105.40p -1.50%


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