Reckitt Benckiser sees growth at upper end of target this year Reckitt Benckiser sounded a positive note by telling investors that growth would be at the upper end of targets this year even as regulatory provisions pushed down net income at the consumer goods group. The company, which under chief executive Rakesh Kapoor has pushed more into health brands, said revenues at the half-year stage were 6 per cent higher than last year at £5bn. Like-for-like growth was 5 per cent. Mr Kapoor said Reckitt had "made a strong start to the year." By sectors, the company's strongest growth was in its health division, which represents a quarter of group sales, where like-for-like sales increased 14 per cent. Reckitt pointed to a good performance from Mucinex cold remedies and Durex condoms. Reckitt also drew attention to a challenge to Suboxone, its heroin substitute drug, where generic tablets have gained market share this year. In addition, Reckitt took a £225m charge to make provisions for the expected outcomes of a number of regulatory investigations. The group said most of these were "historic" and related to competition law as well as involving other companies. The total exceptional pre-tax charge was £249m including some restructuring costs. Net income for the six months to June 30 fell 15 per cent to £660m. Analysts had expected about £868m, according to a consensus of published estimates. Group adjusted operating profit was 3 per cent higher at £1.2bn. Earlier this month, CVS Caremark, the US pharmacy chain, also said it had dropped the dissolvable film-based variation of the Suboxone treatment from the list of drugs approved by its insurance programmes. Reckitt said its film version of the product still had a good market share. We have always been aware of the challenges of operating in a post-generic environment. However, we continue to see strong patient and doctor preference for film over tablets and we are very pleased that the film [product] has maintained its volume market share of 69 per cent," Mr Kapoor said. Mr Kapoor said Europe, where some signs of economic recovery were emerging, would remain a difficult market and added that he was not concerned by a market slowdown in China. "Our business there is still in quite an exciting phase," he said. A withdrawal from private-label business helped to push Reckitt's gross margin 2.3 percentage points higher to 58.7 per cent. Reckitt said it was confident of increasing revenues this year by between 5 and 6 per cent and said growth should be at the upper end of that range. An interim dividend increase of 7 per cent to 60p was also declared.