Reckitt launches £250m buyback

DETTOL-to-Mr Sheen group Reckitt Benckiser will return £250m to shareholders via a share buyback programme over the next 12 months, but chief executive Bart Becht says the move does not rule out potential acquisitions.

Already the world's biggest manufacturer of household products, Reckitt has been tipped as a bidder for SSL International, which makes Durex condoms and Dr Scholl sandals, and is valued at about £600m.

Becht declined to comment on SSL but said: 'Even with our buyback programme we have the flexibility to make acquisitions and we continue to look for opportunities.'

Boosted by the success of new products such as its Dettol Easy Mop, first-half net income at the group rose by 15% to £199m, on turnover 4% ahead at £1.83bn. It has raised its full-year target for growth in net income to 14%, up from the previous 'low double-digit' forecast.

Shareholders get a 10% increase in interim dividends to 14p and the shares jumped 32p to £11.62.

The group continues to spend heavily on advertising new product launches but strong cash generation means it is now sitting on a £95m cash pile. This meant its interest charges almost halved, to £11m.

Becht said growth had come virtually across the board although in North America a slowdown in the market combined with heavy marketing expenditure saw operating profit tumble by 31% to £29m. In Asia, sales of Dettol were boosted by the Sars epidemic.