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Reckitt Benckiser H1 Profit Rises; Now Sees FY20 Results Better Than Previous View

British consumer goods giant Reckitt Benckiser plc (RBGLY,RB.L) reported Tuesday that its first-half profit before income tax grew to 1.44 billion pounds from last year's 1.26 billion pounds.

Net income attributable to owners of the parent company was 1.08 billion pounds, significantly higher than last year's 112 million pounds. Earnings per share improved to 150.9 pence from 15.8 pence last year.

Earnings per share from continuing operations were 144.2 pence, up 4.6 percent from last year. Adjusted earnings per share in the first half were 166.5 pence, compared to 145.4 pence a year ago.

Operating Profit grew 13.4 percent to 1.60 billion pounds, and adjusted operating profit climbed 15 percent to 1.70 billion pounds. Adjusted operating profit margin improved 90 basis points to 24.5 percent.

Net Revenue grew 10.8 percent to 6.91 billion pounds from 6.24 billion pounds last year. On a like-for-like basis, revenue grew 11.9 percent. The company recorded strong e-commerce sales growth of over 60 percent.

In the second quarter, Group LFL revenue growth was 10.5 percent with good growth in Hygiene and Health.

Further, the company declared an interim dividend per share of 73.0 pence, unchanged on 2019.

Looking ahead for fiscal 2020, the company said it now expects net revenue, margin and earnings performance to be better than expectations in February and April, although the outlook for the balance of 2020 remains uncertain.

The company said its underlying revenue performance, pre-COVID-19, has been ahead of early expectations for the year and overall, including favourable tailwinds from COVID-19, it now expects high single digit growth for the year as a whole.

Looking to the second half, net revenue growth is expected to reflect the benefit of COVID-19 tailwinds for Dettol and Lysol.

Further, 2020 margins are expected to be in line with current consensus expectations.

Looking to the medium term, outlook for sustained mid-single digit organic revenue growth and mid-20's margin by 2025 remains unchanged.

Laxman Narasimhan, Chief Executive Officer, said, "While uncertainties remain for the second-half of the year, on both the public health and economic fronts, we have increased confidence in the successful delivery of our medium term goals."

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