Reckitt shrugs off difficult trading

STRONG demand for sauce mixes and air fresheners helped Reckitt & Colman, the consumer products giant, to shrug off difficult trading conditions in the first half, writes Neil Thapar.

Taxable profits at the Colman's mustard to Lemsip cold remedies group edged up 5 per cent to pounds 134m for the period to 4 July, despite a drop in sales from pounds 994m to pounds 936m.

The profits growth partly stemmed from higher demand for sauce mixes. The company said shoppers cut back on their food bills by buying cheaper cuts of meat - but flavoured meals with its products.

But it was forced to write off pounds 52m below the line against the disposal of a loss-making spices business, which has been hit by a long-running price war. The disposal meant trading profits from the food division rose from pounds 20.8m to pounds 21.2m.

Profits from household goods and toiletries jumped from pounds 103m to pounds 104.6m thanks to the continued popularity of air fresheners. Pharmaceuticals, which includes Disprin soluble aspirin and Dettol antiseptic, improved its contribution from pounds 19.4m to almost pounds 20m.

Earnings improved 5 per cent to 21.3p. The interim dividend is up 7.2 per cent to 5.95p.