Dettol maker posts loss and warns on higher costs

Dettol maker Reckitt Benckiser has warned its margins will be squeezed this year due to higher costs, sending its shares 9% lower.

Dettol maker Reckitt Benckiser has joined other top consumer goods companies with a warning its margins will be squeezed this year due to higher costs, sending its shares 9% lower.

The company, which also owns brands such as Veet, Durex, and Finish, also missed second-quarter sales growth estimates as growth slowed in demand for its products.

Chief financial officer Jeff Carr said Reckitt had witnessed inflation across "most of its commodity groups", with costs trending up between 8% and 9% for the year.

Reckitt said it now expects its 2021 adjusted operating margins to fall to between 22.7% and 23.2% from 23.6% in 2020.

The company said it would take time to offset the inflationary headwinds with productivity and pricing action being implemented in the second half of the year and early 2022.

It posted a £1.82bn (€2.1bn) first-half operating loss, due to a £3bn charge it incurred on the sale of its infant nutrition business in China announced last month.

Reckitt's comments mirrored those of larger peer Unilever , which last week cut its margin guidance blaming higher raw material costs on everything from crude to palm and soybean oil.