The global household goods giant’s overseas foreign earnings are now worth more in sterling terms, but sales are slowing and last month’s cyber-attack caused disruption.
Costas Costantinou, head of retail broking at Beaufort Securities, expected first-half revenues to total £5.2billion: “This is 13 per cent stronger than last year, but all of this is due to the beneficial effect of weaker sterling, Reckitt Benckiser’s reporting currency.”
The firm, whose brands include Harpic, Nurofen and Scholl, last week finalised a deal to sell its French’s food business to McCormick, US-based owner of Schwartz spices, for $4.2billion (£3.2billion).
The cash will shrink the company’s debt after its purchase of baby formula maker Mead Johnson for $17.9billion earlier this year.
Costantinou said Reckitt Benckiser has an enviable track record of sales growth and cash-flow generation, while the Mead Johnson deal gives it greater exposure to fast-growing China, but its organic sales growth rate has slowed sharply: “The stock is costly, so the downside risk from even mediocre performance could be significant.”