Reckitt posts £804m annual loss but predicts growth

Reckitt Benckiser suffered an £804m annual operating loss caused by the sale of its Chinese infant formula business but the consumer goods company was upbeat about growth.

The FTSE 100 group swung to the loss under IFRS accounting rules for the year to the end of December from a profit of £2.16bn a year earlier. Net revenue fell 5.8% to £3.36bn.

The maker of Dettol disinfectant and Cillit Bang cleaner left its annual dividend unchanged at 174.6p a share.

Excluding the sale of the IFCN business, operating profit fell 8.5%, or 2.6% at constant currency, to £2.94bn. Like-for-like net revenue rose 3.3% - better than its guidance - and Reckitt said it was targeting growth of 1-4% on that basis in 2022.

Reckitt also predicted net margin growth despite strong inflation. Revenue and margin growth will be weighted towards the second half, it said.

Reckitt's business boomed in the early stages of the pandemic as demand surged for disinfectants and surface cleaners but growth slowed in 2021. The company is selling lower growth businesses such as the Scholl footcare brand and E45 moisturiser.

The company booked a £3.35bn loss in 2021 from the sale of ICFN and £234m losses from the disposals of Scholl and Enfabebe in Argentina.

Laxman Narasimhan, Reckitt's chief executive, said: "The business is showing positive momentum. We are therefore targeting both growth in LFL net revenue and an increase in adjusted operating margin in 2022, despite an unprecedented inflationary environment and ongoing uncertainties created by Covid."

Reckitt Benckiser shares rose 4.4% to £60.64 and were the biggest gainers in the FTSE 100 index.