Reckitt Benckiser’s bid to bounce back from a string of disastrous setbacks was hurt on Tuesday, with the consumer goods giant revealing a manufacturing disruption at one of its baby formula factories has hit sales.
The FTSE 100 firm, which makes Nurofen tablets and Durex condoms, said its Netherlands plant had “technical engineering issues” during the third quarter, which contributed to £70 million in lost sales.
It added that supply has been restored, but it expects some lingering impact into 2019. Chief executive Rakesh Kapoor said on a conference call: “I’m really unhappy.”
Comparable sales rose 2% in the three months to September. Total sales decreased 2% to £3.1 billion.
The City was unimpressed, and shares in Reckitt Benckiser, which bought US baby formula group Mead Johnson last year, fell 304.5p, or 4.61%, to 6306.5p.
The glitch is the latest problem to hit the manufacturer. Last year it suffered a cyber attack, and it took a £318 million hit amid a US pharmaceuticals probe linked to competition and consumer protection laws. Reckitt Benckiser was also previously hurt by a scandal in South Korea over the sale of a toxic product.
Investec analyst Eddy Hargreaves said: “A further one-off issue, just as several prior ones have finally come to an end, is an unwelcome surprise at the third-quarter stage.”
Kapoor was more upbeat as he said the UK performed well during the period, and the firm reported growth in Lemsip sales, and a strong quarter in India.
He said his firm has “sufficient momentum and progress” to absorb the temporary manufacturing disruption.
Reckitt stuck by its full-year growth target for total net revenue growth of 14% to 15% at constant currency rates.
Hargreaves Lansdown fund manager Steve Clayton said that excluding the latest disruption, “the rest of the group looks to be performing to plan”.
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