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Summary
- Reckitt Benckiser shares crashed 10% on Tuesday, 27 July
- The stock extended losses after opening 7% lower in the wee hours of trading
- Net revenue of company slipped 8.2% to GBP 3,092m in Q2 FY21
Shares of Reckitt Benckiser Plc (LON: RB), the Slough-headquartered consumer goods manufacturer, crashed 10% on Tuesday, 27 July, after the company reported a slump of approximately 8% in the Q2 FY21 net revenue.
The stock opened 7% lower, reacting to the development, fell further in the wee hours of trading. Reckitt Benckiser shares have been on a falling trend since October last year, except for a one-and-half-month gain of 11% between late-February and mid-April of 2021.
According to the data available with the London Stock Exchange, the stock of Reckitt shed as much as 10.02% to a fresh 16-month low of GBX 5,601 from the previous closing price of GBX 6,225 apiece.
Reckitt Benckiser shares (27 July)
Image Source: EODHD/Others
Barring today’s slump in the share prices, the stock stands with a loss of nearly 8% on a year-to-date (YTD) basis.
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Unusually higher volumes were seen in the shares of Reckitt Benckiser on Monday. As per the LSE data, nearly 2.5 million shares exchanged hands, translating into a total traded turnover of more than GBP 110 million up until 13:49 BST.
Reckitt’s net revenue slipped 8.2% to GBP 3,092 million in the April-June quarter, while the total sales in the first half of the present calendar year slumped 4.5% to GBP 6,598 million
In H1 2021, Reckitt recognised free cash flows (FCF) to the tune of GBP 520 million, 72.7% lower as compared to the similar period of the last year. The sharp reduction in the FCF was largely due to partial unwind of the working capital benefit in 2020, the health-to-hygiene product maker said.
At the end of 30 June 2021, Reckitt Benckiser had a net debt of GBP 9,084 million. During the corresponding period, the growth was largely led by North America, while the company’s revenue grew moderately from the European markets.
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The board of directors have recommended an interim dividend of GBX 73 for the year 2021, maintaining the previous year dividend of GBX 73 per share. According to Reckitt Benckiser, the company has fixed 5 August as the ex-dividend date and the dividend will be paid on 15 September 2021 to all the eligible shareholders who remain on the register at the record date of 6 August 2021.
The company is expecting a slower growth in the third quarter as compared to the previous year number, mostly lifted by the removal of the nationwide first lockdown. Reckitt Benckiser expects a like-for-like net revenue growth between the range of 0% and 2% for the July-September quarter.
