By Martinne Geller
LONDON Feb 12 Consumer goods group Reckitt
Benckiser reported a rise in sales and forecast further
growth this year, despite challenges in emerging markets, and
named a new chairman for its declining pharmaceuticals business
to help with a strategic review.
The company did not say what option it was leaning towards
for the business, which centres on the opioid-dependence drug
Suboxone, but some analysts took the appointment of drugs
industry veteran Howard Pien chairman as a sign it might be
preparing for a sale or spin-off.
"The appointment of a chairman of this business might be
taken as implying a spin-out is a serious possibility," analysts
at Credit Suisse said in a research note.
CS values the pharmaceuticals business at about 1.5 billion
pounds, or just over 200 pence a share.
Shares in Reckitt were up 0.7 percent at 4865 pence by 0856
GMT on Wednesday, valuing the entire group at 35 billion pounds.
Reckitt, whose wide range of household, health and personal
brands include Lysol disinfectant and Durex condoms earlier
reported that fourth-quarter like-for-like sales excluding its
drug business rose 4 percent. The consensus forecast from
analysts in a company-supplied survey was for an increase of 4.2
Including the impact of acquisitions, quarterly revenue
excluding Suboxone, rose 7 percent to 2.32 billion pounds. That
exceeded company targets, due to swift integration and
"Market conditions are more challenging now than at the
beginning of last year, particularly in some emerging markets,"
Chief Executive Rakesh Kapoor said in a statement. Still, he
said he was confident the company's pipeline of new products and
investments would deliver growth this year.
Reporting earnings down 4 percent at 238.5 pence a share but
up 2 percent at 269.8 pence before exceptionals, the company
raised its total dividend by 2 percent to 137 pence a share,
including the final payout of 77 pence.
For 2014, Reckitt forecast revenue growth of another 4 to 5
percent, with flat to moderate operating margin expansion,
Reckitt said in October it was considering all options for
the pharmaceuticals business, which is declining due to
competition from cheaper generic versions. It said on Wednesday
that the review was continuing and that it would update
investors over the course of the year.
Regarding acquisitions, Kapoor said Reckitt would continue
to be active in consumer healthcare, but declined to comment on
a recent Reuters report that companies like Reckitt could be
interested in buying U.S. drugmaker Merck & Co's $8-10
billion consumer healthcare business.