Reckitt Benckiser South Korea scandal takes its toll on sales
Nurofen-maker Reckitt Benckiser has recorded worse-than-expected sales growth - as it grapples with flagging sales of a new footcare product and a disinfectant scandal in South Korea.
The FTSE 100 firm said like-for-like revenues, which strip out exchange rates, acquisitions and disposals, rose 2% in the three months to the end of September, compared to analyst predictions of a 2.8% rise.
However, the company said it was boosted by the plunge in the value of the pound following the Brexit vote, with revenues including the impact of currency changes rising 17% to £2.6 billion.
Reckitt Benckiser, which makes Durex condoms and Harpic toilet cleaner, said it had started paying compensation from a £300 million fund after admitting that a humidifier disinfectant produced by the company had killed 96 people in South Korea and caused illness for a further 400.
It said third quarter like-for-like revenues in developing markets rose 7% to £788 million, but were pegged back by a sales drop in South Korea after consumers boycotted its products.
Revenues in its European and US division were flat at £1.7 billion over the period after the firm's new Scholl "Wet & Dry" gadget - which removes hard skin from feet - eked out a weak performance.
Chief executive Rakesh Kapoor said the firm is targeting full year like-for-like revenue growth of 4% after previously forecasting it to hit the "lower end" of 4% to 5%.
"In an environment where market growth rates have softened, we continue to make good strategic progress in all of our power markets, particularly in India, and in China where we are driving strong development of our e-commerce channels," he added.
Shares were down more than 2% on the London market.