Reckitt cleans up as profits soar despite European downturn

Reckitt Benckiser, the firm behind products such as Dettol, Durex and Cillit Bang, saw profits climb 13 per cent last year despite declining European demand.

Strong growth in developing countries helped the household goods heavyweight offset a weak performance in Europe - its biggest market - where net revenues fell 1 per cent.

It is targeting further sales and profits growth in 2011, although at a reduced pace for earnings due to a tough global economic backdrop.

Pre-tax profits rose to 2.14 billion last year despite a 2 per cent fall in the fourth quarter, with Reckitt meeting its own forecasts for 6 per cent revenues growth and coming in just shy of its 16 per cent net income goal.

It is aiming to double sales growth this year, but it expects net income to rise by a more muted 10 per cent.

Reckitt, which recently completed its acquisition of Durex and Scholl owner SSL International, said results had been boosted by intense marketing efforts surrounding its key "power brands".

The Slough-based group joined rivals in cautioning over input costs and competition within the industry. Consumer product firms have been hit by soaring commodity prices and Carex and Imperial Leather producer PZ Cussons revealed recently that it was impacting soap costs, with palm oil prices racing higher.

Reckitt yesterday said its profit margins were already under pressure from increased promotional spend in the fourth quarter.

New launches, such as its no-touch hand soap system under the Dettol brand, helped health and personal care sales rise 6 per cent in 2010.

Net revenues eased 1 per cent to 3.4bn in Europe as the region was hit by increased competitive activity for Vanish stain removal, as well as weak demand for laundry detergent, fabric conditioner and water softeners.