Headache for Nurofen owner as they lose £5bn

Nurofen-Dettol and Durex owner Reckitt Benckiser have a headache as Reckitt posted a £3.7 billion loss yesterday as it took a £5 billion charge on its takeover of baby formula maker Mead  Johnson. Reckitt which also owns Cillit Bang acquired baby milk maker Mead Johnson in a mammoth £13 billion ($16.6 billion) deal in 2017.

Reckitt Benckiser Group plc (RB) is a British multinational consumer goods company headquartered in Slough, England is a produced of health, hygiene and home products formed in 1999 by the merger of British company Reckitt & Colman plc and Dutch company Benckiser NV. Rakesh Kapoor the former CEO retired after 8 years as CEO and 32 years at the company and during his lengthy tenure Kapoor has seen Reckitt’s share price nearly double from £33 to more than £61.

According to the Reckitt, the infant formula and child nutrition arm had missed forecasts as it suffered in China from stiff competition, lower birth rates, and disruption to trade in Hong Kong.

The huge loss for 2019 contrast  with a £2.2 billion  profit in 2018/

The company also took a hit from a $1.4bn settlement with the US Department of Justice last year over a probe into the sales opioid addiction treatment by its former drug business Indivior.

Reckitt’s sales grew  2 per cent to  £12.8 billion and CEO Laxman Narishimhan, a former PepsiCo executive said the company would invest £ 2billion over the next three years as he revealed plans to overhaul the business.

Rickett resisted pressure from shareholders to offload fringe businesses to boost growth.

Rickett said there had been a spike in demand for Dettol as a result of the coronavirus but the outbreak could also hit its supply chain.