Reckitt launches £500m buyback as quarterly sales accelerate

Reckitt Benckiser Group PLC ( LSE:RKT OTCQX:RBGLY ) has launched a new £500 million share buyback after second-quarter sales accelerated across all regions and product categories.

The maker of consumer products brands ranging from Dettol to Durex said like-for-like net revenue rose 4.7% in the second quarter, lifting first-half growth to 2.6%.

Core Reckitt like-for-like growth accelerated to 4.2% in the second quarter from 1.2% in the first.

Volumes rose 2.0% and price and product mix contributed a further 2.2%.

Total group revenue fell 8.1% to £6.41 billion, mainly reflecting the disposal of its Essential Home business.

Emerging markets remained the strongest region of core growth, expanding 9.4% in the quarter.

North America returned to growth with a 2.8% rise, while Europe's decline narrowed to 1.5%.

Chief executive Kris Licht called this "broad-based acceleration", which came alongside a programme to reduce fixed costs and create more capacity for investment.

Adjusted operating profit for the first half fell 15% to £1.5 billion, while adjusted diluted earnings per share declined 9.7% to 152.1p.

Both decreases were mainly attributed to the Essential Home disposal.

Reckitt maintained its full-year guidance for 4-5% like-for-like revenue growth at its core business and an adjusted operating margin of 24.9-25.6%.

The group described higher oil-linked input costs as a "manageable headwind", adding that the impact was now expected to be lower than previously feared.

The interim dividend was increased 5% to 88.6p per share.

The new buyback will begin shortly and run for up to 12 months.