Reckitt Benckiser unveils £1bn share buyback

(Sharecast News) - Reckitt Benckiser unveiled plans to return £1bn to shareholders on Wednesday, as new chief executive Kris Licht laid out plans to boost revenues over the medium term. Licht, who took over at the start of the month, said the consumer goods company's strong free cashflow generation and balance sheet meant it could boost shareholder returns via a £1bn share buyback programme, carried out over the next 12 months.

He also pledged to continue growing dividends.

Licht, who has been at Reckitt Benckiser since 2019, most recently as chief customer officer, said the firm's "excellent" portfolio of brands meant it was well-positioned to deliver "mid-single digit like-for-like net revenue growth over the medium term".

He continued: "Our pipeline of large innovation platforms gives me continuing confidence to deliver mid-single digit net revenue growth.

"We do, however, have room to sharpen and improve. We will continue to invest in the superiority of our products, work to improve the consistency of our in-market execution and optimise our cost base.

"At the same time, we will constantly sharpen our portfolio in line with our clear principles for portfolio value creation."

The update came as Reckitt posted a 3.4% uptick in third-quarter like-for-like sales, to £3.6bn, slightly below analyst expectations for a 3.7% improvement.

Within that, hygiene sales rose 8.1%, boosted by brands such as Finish and Vanish, while health - which includes Durex and Nurofen - improved 5.4%.

Nutrition, however, fell sharply, down 11.9%, hit by tough comparatives after the firm temporarily benefited last year from competitor supply issues in the US.

On a total basis, sales fell 3.6%, with nutrition down 15.4% and health falling 3.3% on the same basis.

Group volumes were down 4.1%, while the price-mix rose 7.5%.

However, Reckitt reiterated its target for full-year like-for-like net revenue growth of between 3% and 5%, with adjusted operating margins "slightly above" 2022 levels once the impact of US nutrition is stripped out.