Consumer goods firm Reckitt (RKT) dipped 0.2% to £62.59 as it announced the sale of its E45 skincare brand (and related sub-brands) for £200 million to Karo Pharma.
The proposed sale, if completed, would be another ‘step forward in Reckitt's plan to actively manage its portfolio for higher growth, following the recent divestments of its IFCN business in China and its Scholl brand, as well as the acquisition of Biofreeze,’ the company said.
The proposed sale was subject to the satisfaction of customary closing conditions, including consultation with employee representatives in France.
Subject to the satisfaction of those conditions, the proposed sale of the E45 business was expected to close in the second quarter of 2022.
TOUGH YEAR FOR RECKITT
Reckitt shares have had a tough year, falling 7.7% against a FTSE All-Share up 12.9%. Investors have lost some faith in CEO Laxman Narasimhan’s turnaround of the business.
Plus the benefits it enjoyed in the early stages of the pandemic thanks to a focus on health and hygiene products have waned to be replaced by rising input costs and slower sales.
Still third quarter numbers (26 Oct) were more encouraging and Berenberg noted at the time that: ‘We believe Reckitt offers the most compelling structural change opportunity from improved execution.
‘Based on the company's key categories, we expect like-for-like sales growth to accelerate to 4% (average) from 2023 and to underpin a stock re-rating.’
