Hygiene awareness boosts Reckitt Benckiser’s profit continuously

Reckitt Benckiser (Bangladesh) Limited is witnessing continuous growth in net profit due to the surging usage of healthcare and hygiene products, fuelled by the awareness during the pandemic.

The products of this publicly traded British multinational company in Bangladesh are Finish, Lysol, Veet, Dettol, Air Wick, Durex, Mortein, Strepsils, Vanish, Trix, Mr Brasso, DermiCool, and Harpic etc.

The company witnessed its net profit reaching at Tk 80.81 crore in 2021, Tk 73.89 crore in 2020, and Tk 61.93 crore in 2019 respectively.

The company achieved Tk 490 crore in revenue in 2021, witnessing a degrowth of 7.3 percent compared to that of Tk 530 crore in 2020, as pandemic time the demand of the hygiene products was higher.

However, the revenue in 2021 is still higher than the revenue of the pre-pandemic era, which was Tk 410 crore in 2019.

Reckitt Benckiser (Bangladesh) has been paying sound cash dividends over the years. The company disbursed a 1650 per cent cash dividend in the last year- the highest witnessed for a stock on the Dhaka bourse yet. The company disbursed a 1400 per cent cash dividend in 2020. 

The multinational company has consistently achieved growth in its earnings per share (EPS) over the last four years. According to EBL Securities, its EPS in 2021 will be Tk 171, up from Tk 156.4 in 2020, representing a 9.4 per cent year-on-year increase.

Along with that, growth in the company’s dividend per share has also been observed in from FY 2019 to FY2021. The dividend payout ratio has been consistently over 90 per cent from 2017 to 2021, except coming down to 89.5 per cent in 2020 for a temporary setback due to the pandemic, it said. 

According to the central bank's inflation expectation survey, the annual average rate of inflation is anticipated to exceed 6 per cent by the conclusion of the current FY’22. 

As a result of rising fuel and edible oil prices, inflation expectations may heighten further. This inflationary pressure will erode consumers' buying power. Reckitt Benckiser being an FMCG producing company, is highly susceptible to buyers’ purchasing power, EBL Securities said in the study. 

Consequently, the rising inflation is a threat to Reckitt Benckiser’s top-line growth in the coming years, according to the study projection. 

The multinational company’s blockbuster brand is Dettol. Hand wash, soap, sanitizer, liquid disinfectant, and body wash are produced and marketed under this brand name. Another key revenue driver is the brand named Harpic.

Reckitt Benckiser’s Veet is one of the key depilatory brands in the country which caters both female and male populace. Its pharmaceuticals products Strepsils and Moove are the key products manufactured and marketed.

Listed in the Dhaka Stock Exchange in 1987, Reckitt Benckiser shares price stood at Tk 4,999.50 at the bourse on Thursday. 

General investors hold about 5.92 per cent of Reckitt shares, foreign investors 2.91 per cent and institutional investors 4.44 per cent. The Bangladesh government has a 3.77 per cent stake in the company and the sponsor-directors hold the remaining 82.96 per cent shares.