In1999,itmergedwithBenckiser,aGermanchemicalsbusiness。

Duringthelastdecade,ReckittBenckiserhastargetedemergingmarketsandinvestedinNurofen,Strepsils,DurexandScholl。

Thecompany’srapidprofitgrowthsince2000hasrewardedinvestorshandsomely,butgrowthrateshaveslowedlately,whilecompetitionhasincreased。

Whorunsit?

RakeshKapoor,whojoinedthecompanyin1987,hasbeenchiefexecutivesinceSeptember2011。

KapoormaysympathisewithTescochiefexecutivePhilipClarke’spredicament,asbothmeninheritedtheirrolesfromsuccessfulpredecessorsjustastradingconditionsbecamemorechallenging。

LizDohertyischieffinancialofficerandAdrianBellamyischairman。

How’strading?

Inthethreemonthsto30September2011revenuesroseby16%to£2。

44bn,whileoperatingprofitsgrewby14%to£645m。

Earningspershare(EPS)roseby9%to63。

9p。

Thehealthcareandpharmaceuticalbusinessesperformedwell,butfabriccaresalesfellaspriceswerecutduetorisingcompetition。

What’stheoutlook?

WhileReckittBenckiserexpectstomeetits2011targets,futuregrowthlooksuncertainasdevelopedmarketsarematuring。

Moreworryingly,Suboxone–itstreatmentforopiatedependency–accountsforaround20%ofgroupprofits,whichcoulddeclineby80%shouldgenericcompetitionarrive。

Thisraisestheriskofthefirmoverpayingforacquisitionsinsearchofgrowth。

SomecityanalystssuggestitmaybeatakeovertargetforProcterGambleorColgatePalmolive,butcompetitionconcernsmaypreventthisfromhappening。

Theanalysts

Ofthe31analystssurveyedbyBloomberg,15say“buy”,seven“hold”andnine“sell”。

Theaveragepricetargetis3,446p–4%abovethecurrentshareprice。

MostbullishisDeutscheBank,witha4,100ppricetarget,whileRoyalBankofScotlandismostbearishwitha2,800ptarget。

Thenumbers

Stockmarketcode?

RBShareprice?

3,311pMarketcap?

£24。

1bnNetassets(June2011)?

£5。

5bnNetdebt(Sept2011)?

£2。

2bnP/e(currentyearestimate)?

13。

5timesYield(prospective)?

3。

9%

Ourview

Despiteanenviableportfolioofleadingconsumerbrands,thecompanyfacesmanychallenges。

Yearsofstrongprofitgrowthmaybeathingofthepastandbettervaluefoundelsewhere。

Avoid。

Directorsdealings

DeputychairmanPeterHarfsold£23mworthofsharesinNovember,whichraisedafeweyebrows,givenheischiefexecutiveofJohABenckiser,whichhasa15%ownershipstakeinReckittBenckiser。

FinancedirectorLizDohertybought7,000sharesfor£230,000inOctober。

Recentshareactivitycanbeseeninthechartontheleft;themaindirectors’shareholdingsareshowninthetableontheright。

Directorandsharesheld

ABellamy:20,955LDoherty?

7,000RKapoor:244,875?

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