Household cleaning products producer Reckitt Benckiser has been tipped by The Share Centre to perform in the long-term, as the company’s strategy continues to deliver results.
The firm reported net income of £380 million, in its half-year results earlier this year, and was bullish about its prospects for the remainder of the year.
Bart Becht, chief executive at Reckitt Benckiser, said the firm had benefited from ‘excellent growth’ in developing markets.
Becht warned, however, that increased competition for its US prescription drug Suboxone, which recently lost its exclusivity as an orphan drug, could harm its market penetration and earnings.
He said, ‘For the total group, we are confident of delivering another year of good growth in 2010, notwithstanding potential generic competition to Suboxone in the US.’
Nick Raynor, investment adviser at The Share Centre, said the firm’s recent fall in share price could present investors with a good opportunity for long-term growth.
He said, ‘The company’s strategy for growth is simple and well executed. Its core products such as Cillit Bang, Clearasil and Vanish, remain strong, allowing a constant stream of new products to keep sales moving upwards.
‘Despite the tough consumer environment, the strength and diversity the company’s portfolio enables it to continue to make steady progress.’
Raynor added, ‘In order to diversify itself further, the company has accelerated further in to the health and personal care sector though the acquisition of SSL.
‘This strategy, along with positive interim results released in July 2010 means we recommend Reckitt Benckiser as a stock to consider for lower risk investors.’