By Michael Susin

Reckitt Benckiser's shares rose after the company said adjusted profit beat market expectations, despite lower sales, as it continues to progress with its turnaround plans.

Shares in morning trade were up 3% at 53.40 pounds. Since the start of 2025, the stock is up more than 10%.

The consumer-goods company--which houses Dettol, Harpic and Durex among its brands--reported pretax profit for 2024 of 2.10 billion pounds ($2.71 billion), compared with 2.40 billion pounds in the year-earlier period. The fall was driven by higher one-off impairments and restructuring costs, it said.

Adjusted operating profit--which strips out exceptional and other one-off items--was 3.475 billion pounds, ahead of the 3.37 billion pounds from a year ago and beating company-provided market consensus of 3.31 billion pounds.

Profits were lifted by a gearing effect from higher prices and productivity improvements that led to a lower cost base, Quilter Cheviot head of equity research, Chris Beckett, said in a note.

Revenue came in at 14.17 billion pounds compared with 14.61 billion pounds the prior year, missing market expectations of 14.19 billion pounds according to the company-provided consensus.

Net revenue on a like-for-like basis grew 1.4%, driven by a 2.0% contribution from higher pricing, while sales volume decreased 0.6%. This compares with market expectations of a 1.8% contribution from prices and a drop of 0.2% in volumes.

Reckitt's revenue growth was supported by its hygiene segment, up 4.2% on a like-for-like basis, while nutrition segment revenue fell 7.3%.

During the fourth quarter, net revenue grew 4.6% on a like-for-like basis to 3.54 billion pounds, missing market expectations of 5.3% growth as the group flagged lower sales in the health segment from its over-the-counter brands due to weak cold and flu trends. These brands represent around 10% of the group's total revenue.

In July 2024, Reckitt launched a plan to make it portfolio slimmer and simplify the organization in order to accelerate growth. The new structure consists of a core group of 11 major brands, representing more than two-thirds of the total revenue. Reckitt is on track to exit its essential home segment by the end of 2025 and is evaluating opportunities to sell its Mead Johnson Nutrition business.

Looking ahead, Reckitt expects LFL core revenue growth of 3% to 4% in 2025. Group revenue is expected to grow between 2% to 4%, with Essential Home and Mead Johnson Nutrition making performance more second-half weighted.

The guidance comes below market expectations of 4.4% LFL revenue growth, according to a company-compiled consensus.

The board declared a dividend of 202.1 pence a share, compared with 192.5 pence for the previous year.

Write to Michael Susin at michael.susin@wsj.com

(END) Dow Jones Newswires

March 06, 2025 05:48 ET (10:48 GMT)

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