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Reckitt Benckiser
15:25 06 Jul 2017
Reckitt Benckiser shares plunge as it sees £100mln
hit to full year revenue after cyber-attack
Price:
7748.00p
Market Cap:
£54,504.18M
1 Year Share Price Graph
Reckitt Benckiser Group plc (LON:RB.) shares took a tumble today after the
consumer products group revealed a cyber-attack disrupting the consumer
goods company's operations could cost an estimated £100m in full year
revenue leading analysts to chop forecasts and targets for the stock.
The FTSE 100-listed manufacturer of Nurofen, Veet, Dettol and Stepsils said
some of its factories were still not in operation following the so-called 'Petya'
ransomware attack on 27 June but it was working on getting them back up and
running.
In late afternoon trading, Reckitt shares were off their earlier lows, but still
down 1.6%, or 123p at 7,577p.
Share Information
The attack disrupted Reckitt's ability to manufacture and distribute products to
customers in a number of markets across the group, it said.
Code:
Listing:
52 week
Revenue in the second quarter is expected to drop 2% on a like-for-like basis,
compared to a 4% increase the same period a year ago when it reported net
revenue of £2.2bn.
Sector:
Capital Goods
Website:
www.reckitt.com
For the full year, the group cut its revenue guidance to like-for-like net revenue
growth of 2% from a previous estimate of 3%, following a 3% rise in 2016 to
£9.8bn. This would equate to about £100mln in lost revenue.
Petya ransomware attack hits companies across the globe
The ransomware, which blocked access to computers and demanded US$300
in Bitcoin to release them, hit a number of businesses worldwide including
Oreo cookie manufacturer Mondelez International, the shipping group Maersk
and the advertising agency WPP.
Reckitt said its revenue was also affected by a new goods and services tax
(GST) in India, which resulted in fewer orders from customers in June.
Excluding the impact of the taxes and the cyber-attack, like-for-like revenue in
the second quarter is expected to be flat.
RB.
LSE
Low
6496p
High
8108p
Company Synopsis:
Reckitt Benckiser is a manufacturer and
marketer of branded products in household
cleaning and health and personal care,
selling a range through over 60 operating
companies into around 180 countries. Its
product groups include Fabric Care,
Surface Care, Dishwashing, Home Care,
Health & Personal Care, making up core
business together with Other Household
and
Food.
Author:
Proactive Investors Ltd
+44 (0)207 989 0813
[email protected]
"We expect that some of the revenue lost from the second quarter will be
recovered in the third quarter. However, the continued production difficulties in
some factories mean that we also expect to lose some further revenue
permanently," the company said.
Jefferies downgrades Reckitt to 'hold', Whitman Howard cuts annual forecasts
Jefferies cut its rating on Reckitt to 'hold' from 'buy', saying the anticipated weak second quarter looks set to "kill
our bullish thesis on an full year 2017 guidance beat".
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The broker said it also had some "minor concerns" of a potential "kitchen-sinking" regarding the company's US$16.7bn
takeover of US baby formula maker Mead Johnson Nutrition. The deal was announced in February.
Jefferies said it remains an admirer of the stock but the recent rally no longer leaves sufficient upside for a continued
'buy' rating.
Whitman Howard left its rating at 'buy' but cut its full year organic revenue growth estimate to 2.0% from a previous
guidance of between 3.4% and 2.8%.
On top of the cyber-attack dramas, Reckitt Benckiser's first half also saw ongoing resistance in South Korea after the
sale of a humidifier disinfectant in the nation killed about 100 people and left hundreds with permanent lung damage,
Whitman said. It also suffered weak demand for its latest Scholl footcare range.
Still, Whitman believes Reckitt remains "well placed to enjoy mature market growth in its core product range",
particularly in its home and personal care division.
"Importantly, we continue to argue that Reckitt Benckiser is best placed to be an active consolidator in consumer
health," Whitman said.
"In particular, it Is one of the few European large cap FMCG companies which generates superior margins to its US
counterparts. Moreover, at 28% its margins way exceed those of most of its consumer health competitors which are
embedded into global pharmaceuticals companies. The path to value creation in our opinion is clear."
-- Updates share price --
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The Business Centre 6 Wool House, 74 Back Church Lane
London, E1 1AF
United Kingdom Company No. 05639690
VAT No. 87207082