Economy

Revamped Reckitt has yet to clean up its act

An amalgamation of issues have deterred growth for the company in recent months, such as cyber-attacks and limp consumer response to new product ranges.

Reckitt said to help boost performance it would operate from two business units from the start of 2018.

It also announced a corporate overhaul to reorganise the firm into two divisions - its consumer health business, including recently acquired United States infant formula company Mead Johnson, and a home and hygiene arm.

As of 09:35 BST, Reckitt Benckiser's share price had added 0.10 percent to 7,042.00p, slightly underperforming the broader United Kingdom market, with the benchmark FTSE 100 index now standing 0.23 percent higher at 7,533.40 points.

Reckitt is no stranger to selling off businesses. The stock's market capitalization is 66.55B. Analysts have questioned whether the group has enough managerial clout and financial firepower to seal a takeover of Pfizer's health business so soon after its Mead Johnson takeover.

We can also take a look at the Average Directional Index or ADX of the stock. "But we should not try and pre-guess, because that is disrespectful", he said.

According to its third quarter trading update, net revenue slipped one percent to £3.2 billion in the three months to September-end as a result of "known issues" and a persistently hard market climate.

Reckitt's London-listed shares were down 0.5 percent at 7,005 pence at 0815 BST on October 18.

In its base business, the group is targeting flat full year like-for-like revenue. It had previously forecast 3 percent, but reduced it in July after a June cyber attack hobbled its operations, leading to lost sales.

"Q3 was a soft quarter as we experienced both the tail end of known issues, and the impact of a continuing challenging market environment", said chief executive Rakesh Kapoor.

"We are also perturbed by the new business structure which will likely further reduce already poor disclosure", they said.

Kapoor added that MJN had a "better quarter, particularly in Greater China, and is progressing well against its second half target for a like-for-like revenue range of a 2% decline to flat". Rival Danone on Tuesday reported a 50 percent jump in Chinese baby food sales in the quarter.

"Here is the ideal opportunity for us to be able to create a proper leader in consumer health with the expertise and the focus that is needed to drive true leadership ... while at the same time unleash the potential of our hygiene/home portfolio by providing focus and accountability", CEO Rakesh Kapoor said.



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