RECKITT BENCKISER HY 2020 RESULTS & Q2 TRADING STATEMENT

[idpickering]

Not the highest of yielders, but some here hold them, so may be of interest here;

Half Year Financial Highlights

· Group LFL growth of +11.9%: sustained strong demand2 for many of our hygiene and health products more than offsetting impact of social distancing behaviours; strong volume growth, up 11%

· Hygiene LFL growth of +16.1%: strong growth for Lysol and Finish in most markets, with strong double digit growth in North America, Europe / ANZ and most emerging markets

· Health LFL growth of +9.3%: strong second quarter for Dettol and Airborne which more than offset some pantry unloading in OTC and parts of IFCN, weaker demand for Durex and the expected headwinds in IFCN in Latin America and Hong Kong

· Strong e-commerce sales growth of over 60%1: estimated to be c.12%1 of half year group net revenue; record gross merchandise value of over $1.5bn in first six months of 2020

· Interim Dividend of 73.0p (2019: 73.0p), in line with policy and guidance from February 2020

Second Quarter Highlights

· Group LFL growth of +10.5%; Hygiene LFL growth of +19.4%, Health LFL growth of +5.0%

Full Year Outlook

· 2020 performance now expected to be better than April expectations, although the outlook for the balance of 2020 remains uncertain; detailed guidance set out on page 5

And later;

Dividends

The Board of Directors has declared an interim dividend of 73.0 pence (H1 2019: 73.0 pence), consistent with its policy and guidance from February 2020. The ex-dividend date will be 20 August 2020 and the dividend will be paid on 29 September 2020 to shareholders on the register at the record date of 21 August 2020. The last date for election for the share alternative to the dividend is 8 September 2020.

https://www.investegate.co.uk/reckitt-b ... 00032247U/

[Arborbridge]

What a shame that only amounts to 2.26% yield! Oh well, I shan't be buying or selling - just enjoying what little they chuck out so reliably, even without big increases.

Arb.

[idpickering]

What a shame that only amounts to 2.26% yield! Oh well, I shan't be buying or selling - just enjoying what little they chuck out so reliably, even without big increases.

Arb.

I rather short-sightedly sold my RB. holdings some time ago. I wish I'd just let them be in my HYP. It just goes to show what happens when one is trying to be to clever for your own, or your HYP's good. In HYPing, less is more, when it comes to being overly fickle, I've learned.

Ian.

[Arborbridge]

What a shame that only amounts to 2.26% yield! Oh well, I shan't be buying or selling - just enjoying what little they chuck out so reliably, even without big increases.

Arb.

I rather short-sightedly sold my RB. holdings some time ago. I wish I'd just let them be in my HYP. It just goes to show what happens when one is trying to be to clever for your own, or your HYP's good. In HYPing, less is more, when it comes to being overly fickle, I've learned.

Ian.

I wouldn't beat yourself up over it. I've often thought that RB is, frankly, a bit useless in that it provides almost no income. What it does have it some certainty, but it's the certainty of not having enough income to live on unless I bought other stocks too.
So, it is a mixed blessing but one I'm OK with for the moment. I could quite easily sell it and double my income, so that's the other side of the coin - but I tend not to hurry into changing my HYP, as you know.

Arb.

[Arborbridge]

What a shame that only amounts to 2.26% yield! Oh well, I shan't be buying or selling - just enjoying what little they chuck out so reliably, even without big increases.

Arb.

I rather short-sightedly sold my RB. holdings some time ago. I wish I'd just let them be in my HYP. It just goes to show what happens when one is trying to be to clever for your own, or your HYP's good. In HYPing, less is more, when it comes to being overly fickle, I've learned.

Ian.

Just another point -do you know what you recycled into, and would checking into that make you feel happier about the decision?

[Dod101]

I was looking at RB but once you get through the official speak it seems that the dividend will be stuck where it is for at least 2020 and maybe beyond whilst they rebuild cover. It is good to have a secure dividend but the yield is just not good enough for me. As a recovery share it looks OK though.

Dod

[tjh290633]

I was looking at RB but once you get through the official speak it seems that the dividend will be stuck where it is for at least 2020 and maybe beyond whilst they rebuild cover. It is good to have a secure dividend but the yield is just not good enough for me. As a recovery share it looks OK though.

Dod

Well, the official comments were:

Adjusted diluted earnings per share in the first half were 166.5p (2019: 145.4p), up 14.5%. Consistent with our dividend policy and the comments made in February 2020 in respect of maintaining a 50% payout over time, we are declaring an interim dividend per share of 73.0p, unchanged on 2019. Reflecting the strong net revenue growth and our negative working capital position, free cash flow was very strong in the first half of the year at £1,902m (2019: £929m)

So it is the 50% payout that is guiding them at the moment. With EPS reported at 144.2p, they are almost spot on the 50% mark at this stage.

Still worth hanging on to, but there are better opportunities for topping up.

TJH

[Dod101]

There was another bit about dividends as well, as follows.

'Repatriating cash to shareholders through a growing dividend remains a long term goal of the business. As a result of the investments being made over 2020 and 2021, which will benefit long-term sustainable growth, our payout for 2020 is expected to be in excess of our policy of paying an ordinary dividend equivalent to around 50% of total adjusted net income. As set out in February 2020, we will maintain the current dividend payout per share until we rebuild dividend cover to target levels, at which time we will be able to resume growth in dividends in line with the growth in adjusted net income'

That suggests a note of caution and leaves them with plenty of room to simply maintain the dividend for 2021 as well, but we'll see. I am not tempted to buy, at least not for income, anyway.

Dod

[monabri]

Listening to Radio 5 this morning I had to chuckle when they mentioned that "social distancing" had adversely affected one part of RB's business...

[dealtn]

Listening to Radio 5 this morning I had to chuckle when they mentioned that "social distancing" had adversely affected one part of RB's business...

Even 1 metre is (by some distance) a stretch too far.

[Arborbridge]

I was looking at RB but once you get through the official speak it seems that the dividend will be stuck where it is for at least 2020 and maybe beyond whilst they rebuild cover. It is good to have a secure dividend but the yield is just not good enough for me. As a recovery share it looks OK though.

Dod

It looks like much of the recovery (in price) has already happened, and rather rapidly - though it may go much higher of course.

Arb.

[TUK020]

Their share price reaction to the Covid outbreak puzzled me at first.
I thought they would jump on the back of Dettol sales. It didn't.
Then I found out that their main Dettol factory was in Wuhan.....
Later it started ramping up

[monabri]

I wonder if they deliberately release these articles the same day the company reports?

https://www.telegraph.co.uk/news/2020/0 ... midifiers/

"More than 14,000 people may have been killed in South Korea's toxic humidifiers scandal, ten times more than previously thought"