US flu outbreak boosts sales at Strepsils maker RB

CONSUMER goods group Reckitt Benckiser has reported a strong start to the year, boosted by strong demand for Strepsils amid a severe flu outbreak in the US.
According to the Centres for Disease Control and Prevention, 2012-13 saw the earliest start to the flu season in almost a decade. Picture: Jon SavageAccording to the Centres for Disease Control and Prevention, 2012-13 saw the earliest start to the flu season in almost a decade. Picture: Jon Savage
According to the Centres for Disease Control and Prevention, 2012-13 saw the earliest start to the flu season in almost a decade. Picture: Jon Savage

The group, which also owns Dettol disinfectant and Vanish stain remover, said it had benefited from an increase in marketing activity on the back of this year’s flu season, which hit the US earlier than normal this year before tailing off at the start of this month.

According to the Centres for Disease Control and Prevention, 2012-13 saw the earliest start to the flu season in almost a decade, with infections peaking in early December rather than January.

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Reckitt reported revenues of £2.52 billion for the first three months of the year, up 7 per cent on the same period last year and ahead of analysts’ forecasts of £2.47bn.

Chief executive Rakesh Kapoor said: “We are pleased with a strong start to the year, with our health and hygiene brands leading RB’s growth. Mucinex and Strepsils have done particularly well, benefiting from a higher incidence of flu in the US.”

He added: “Other ‘powerbrands’ also performed well, with Durex in particular benefiting in China.”

Reckitt Benckiser Pharmaceuticals (RBP), which makes heroin addiction treatment Suboxone, saw first-quarter revenues jump 19 per cent to £201m. Generic rivals to Suboxone were approved for sale in the US in February and have since taken about 10 per cent of the market.

Keith Bowman, an analyst at Hargreaves Lansdown Stockbrokers, said: “Despite newly-introduced generic competition for its highly-profitable pharmaceuticals business, the update has broadly reassured investors.”

Investec analyst Martin Deboo said this year’s cold and flu season was “very strong”, with visits to doctors across the US running at double the rate of last year, and Reckitt’s figures had “clearly been flattered” by the outbreak.

He added: “We think that cough and cold sales are in the region of £500m to £600m annually, or about 5 to 6 per cent of group sales excluding RBP, but significantly higher in the two winter quarters.”

Swiss drug maker Roche said earlier this month that worldwide sales of its Tamiflu prescription drug leapt 84 per cent in the first quarter. However, Deutsche Bank said there was more to Reckitt’s growth than a temporary flu boost.

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Analysts at the firm said: “Although the flu season undeniably helped the first-quarter sales performance, it is the non-flu related areas of the portfolio that were more impressive.

“Home and hygiene products comfortably produced their best like-for-like in many quarters to a level last seen when market growth rates and the competitive environment were more favourable, in early 2008.”

Kapoor said Slough-based Reckitt, which counts Harpic and Nurofen among its brands, was well placed to grow its revenues by between 5 and 6 per cent this year, excluding RBP.

He added: “We expect continued challenging market conditions but nonetheless we remain confident that we can achieve our full-year targets.”