Reckitt Benckiser Group PLC (LSE:RKT, ETR:3RB) beat revenue expectations and raised guidance for the year but warned prices will remain high.
The manufacturer of everything from Durex to Dettol said revenues grew 8.6% to £6.8bn in the six months to the end of June compared to the same period last year, beating previous guidance of 1%-4% growth.
However, the group warned while the input environment remains “unpredictable,” prices will remain high for customers with inflation in the high teens.
Despite this, the conglomerate raised full-year revenue growth forecasts to between 5% and 8%, with more of its brands becoming “less sensitive to Covid dynamics.”
According to a statement, the increased guidance reflects the belief its over-the-counter and infant formula and child nutrition business will normalise in the second half, as well as its disinfection products performing in line with expectations.
In the medium term, the group believes it is “firmly on track” to deliver its goal of mid-20s adjusted operating margins by the mid-2020s.
Operating profit climbed 23.9% to £1.7bn, while operating profit margin also moved higher, up 2.9% to 25.6%.
In addition, first-half margins benefitted from “favourable product mix, productivity initiatives, pricing and phasing of our investments.”
The group’s dividend is expected to be 73p, in line with the first half of last year.
“Despite challenging conditions, we are confident about the rest of the year, we are already delivering sustainable mid-single digit net revenue growth, and remain firmly on track to deliver our medium-term adjusted operating margin goal,” said chief executive Laxman Narasimhan.