valuemanbuyer
07 Mar 2018
Re: Longer term outlook.. I don’t quibble about a couple of quid when I’m ill - I buy the brand I trust - that’s basically what the CEO says & that’s why consumer health is a v goodnarea to be
EssentialInvestor
07 Mar 2018
Re: Longer term outlook.. Just looking at the ULVR board (for the first times in a few years)this topic has been covered pretty exhaustively!.
EssentialInvestor
07 Mar 2018
Longer term outlook.. Will increasing online purchases coupled with the rise of discount retailers,lead to diminishing returns for some consumer product brands?, Including RB.Products such as cosmetics/beauty may be more immune, notice ULVR recentrepositioning.As one example you can now buy unbranded cold and flu tablets,for less than half the price of a branded alternative.Are younger consumers beginning to question costs on holdhold products etc.As s personal example I've abandoned Gillette razors after nearly 30 years,order from an online company now and get a great shave, for significantly less!.
picstloup
06 Mar 2018
Soddit Should have topsliced in the £70s but didn't, so decided to top up another 250 at £56.55.7 a few minutes ago.Surely it can't keep dribbling down?
Bill1703
02 Mar 2018
Re: Citigroup 7200p "Citigroup today reaffirms its buy investment rating on Reckitt Benckiser Group PLC (LON:RB.) and set its price target at 7200p."SITH - I think £72 might well be the "new £90" when it comes to Reckitts targets... there are still plenty of fan-boys among sell-side RB analysts, but their cheerleading is increasingly hoarse IMHO...You just have to look at the steady decline in consensus estimates - we are now below 340p consensus EPS for 2018 (and depending on FX, I suspect this might have to come down a bit further). I would have to check, but I am pretty sure this was up at 375-380p or even more, not that long ago.Of course, £72 is perfectly plausible, and possibly in relatively short order (in the overall scheme of things) - and I'd repeat my view that £57 is indeed "too cheap", on most realistic scenarios... and time horizons. But certain things would need to happen - MJ needs to turn up more decisively (and not just via the old trick of suddenly finding more synergies to target)... and they probably have to dodge the bullet of the Pfizer Consumer auction, though I am not sure the CEO will see it that way.
sage in the hills
01 Mar 2018
Citigroup 7200p Broker Forecast - Citigroup issues a broker note on Reckitt Benckiser Group PLCStockMarketWire | Wed, 28th February 2018 - 09
0Citigroup today reaffirms its buy investment rating on Reckitt Benckiser Group PLC (LON:RB.) and set its price target at 7200p.SAGE
shareordie
01 Mar 2018
Re: Question for RB Share holders "dubbed the Viagra condom"“The above would also drive "growth" Lol it sure would!
Bill1703
28 Feb 2018
Re: Question for RB Share holders "I have a question for RB share holders... Do you feel the sentiment would change if RB announces something on the above two categories?... Assume the above is via a licensing deal so not much cash paid upfront (not in the billions!!!!) but via royalities?"AI - a bit of a strange question... and intriguingly cryptic?The answer for me would be - maybe a tad, at the margin, and wouldn't do any harm.But de minimis, really... all else equal, it's not going to make much of a dent in the two (and related) big issues currently confronting the SP, namely (i) the accusation that they have significantly over-paid in the $17bn Mead Johnson deal, and (ii) they may be about to try and justify paying a not dissimilar amount for the Pfizer consumer unit, with associated concerns over a possible need for a big equity finance element.
Aberdeen_investor
28 Feb 2018
Question for RB Share holders I think the fall has been way overdone on this one...I have a question for RB share holders. Would you support a deal whereby you get to grow market share of the Durex Brand in North America by Durex offering a new type of condom "dubbed the Viagra condom"... (Tremendous scope over here given Trojan is number 1 by some margin in North America)Would you support a deal whereby RB can get into the Erectile Dysfunction Market including over the counter (OTC switch at an appropriate time in the future but prescription only during the early stages)The above two would fit into the strategy of focussing more on the higher margin sector of consumer healthThe above would also drive "growth" Do you feel the sentiment would change if RB announces something on the above two categories?Assume the above is via a licensing deal so not much cash paid upfront (not in the billions!!!!) but via royalities?Views?
samdauncey
27 Feb 2018
Re: The Big Brands - Wonderful Buy Backs... Bill1703. You say " you receive cash as a dividend, and your shares are marked "ex-dividend" by an equal amount".True in principle, but it's not possible to say exactly how much they are re-rated because dividends and gains are taxed differently and the price can change substantially regardless of the dividend: due to overall market sentiment. The re-rating should reflect some sort of average tax situation for the different holders.What I'd like to know is how that average compares to my own tax situation, in case it is better for me, personally, to deal just before or just after the ex-div date. The difference could be negligible but I'm certainly not a typical (investment house fund manager?) shareholder.
Bill1703
26 Feb 2018
Shares magazine update on RB In the most recent edition, with RB currently an underperformer within their "Great Ideas" portfolio. Full text below: "OUR BULLISH CALL on consumer health and hygiene titan Reckitt Benckiser (RB.) is a disappointing 16% in the red. The shares have fallen despite full year results (19 Feb) revealing a return to sales growth in the fourth quarter, boosted by a strong start to the flu season, as well as a 7% hike in the total dividend to 164.3p. Investors were disappointed as the Durex, Strepsils and Air Wick brands owner missed 2017 profit estimates and issued vague guidance for ‘moderate’ medium-term operating margin expansion. In 2018, the £42.7bn cap is targeting 13% to 14% total sales growth thanks to the acquisition of US baby formula maker Mead Johnson, yet tepid 2% to 3% like-for-like growth looks on the cards amid tough market conditions. Uncertainty regarding the magnitude and financing of mergers & acquisitions is also weighing on the shares; Reckitt could become involved in an auction for Pfizer’s consumer healthcare operations, which are up for sale. Though market conditions are challenging, we remain fans of Reckitt’s brand strength and consistent dividend growth and note Liberum Capital’s £80 price target, one implying a healthy 35.4% upside.SHARES SAYS: Reckitt Benckiser’s 2017 performance and share price chart are disappointments to us, yet we’re sticking with the company for its focus on higher margin health and hygiene categories and growth potential in emerging markets."
Bill1703
20 Feb 2018
RB faces battle to regain trust Fairly heavy-hitting stuff from the FT today. Pretty much all of it "fair comment" IMHO - but as always, it is op-ed pieces like this that actually pique my interest, as they often prove to be a reverse indicator of 'going bearish at the bottom'.Anyway, full text below for anyone who is interested:********** ********** **"Reckitt Benckiser faces battle to regain market’s trust""Rakesh Kapoor may have hoped he had put 2017 behind him, but the chief executive of Reckitt Benckiser looks to have his work cut out again this year. Despite his trademark evangelicalism, whether in describing a new campaign for Durex condoms involving emojis or the thermo-foaming properties of the group’s latest Finish dishwasher tablets, Mr Kapoor’s persuasive abilities failed to prevent Reckitt’s shares falling 7.5 per cent on Monday — their biggest one-day fall in more than seven years.Investors were disappointed that the group’s usual forecast for “moderate margin expansion” would be watered down in 2018 by Mead Johnson, the US-based infant formula business bought last June for $17bn. Margins would also be hit by costs related to last autumn’s decision to split Reckitt Benckiser into two business units. The group also said unfavourable currency movements would reduce its 2018 results by 7 per cent — higher than analysts’ expectations of a 3 per cent hit.At heart, however, is an issue of trust. As recently as 2015, Reckitt enjoyed like-for-like revenue growth of 6 per cent. And, as Mr Kapoor reminded analysts on Monday, since 2012 it increased its operating profit margin by 5 percentage points to 27.1 per cent last year, the highest among home and personal care companies. But for the past 18 months, Reckitt has suffered a series of “one-off” problems and disappointments that have led some investors to question Mr Kapoor’s sure-footedness. A failed Scholl footwear launch and June’s cyber attack, which affected dozens of companies, had a bigger than expected effect on revenues.Reckitt entered 2017 with a forecast for 3 per cent like-for-like revenue growth, but for the first nine months of the year, like-for-like revenues fell 1 per cent compared to the same period in 2016. There was some recovery in the final quarter, with growth of 2 per cent. That took revenues for the year to £11.5bn — flat on the previous year. Mr Kapoor says Reckitt’s markets are now growing at just 2 per cent because of pressures on consumer goods companies from a price war between retailers grappling with the growth of ecommerce groups such as Amazon. Reckitt is forecasting 2-3 per cent revenue growth in 2018, which should imply some outperformance if it manages to hit the top end of that range.But James Edwardes Jones, an analyst at RBC Capital Markets, says: “We are concerned at the lack of value growth, which in our view has been a crucial element of RB’s historic success. We wonder to what extent this plays a part in management’s expectation of some specific factors impacting margin for 2018.” The acquisition of Mead Johnson has also drawn a mixed reception. While Mr Kapoor regards the infant formula business as within the consumer health sector that he sees as Reckitt’s aspiration, others are less sure. Over-the-counter drugs are seen as having high earnings quality but Mead’s infant formula sales are highly dependent on the potentially attractive but unpredictable Chinese market. Mr Kapoor declined to comment on Monday on the sale of Pfizer’s healthcare arm, valued at between $14bn-$17bn, but has previously said he would be “very interested” if the US pharma group were to put the unit up for sale. However, concerns exist about how Reckitt would pay for the business given that its net debt levels are high following the Mead Johnson acquisition, at 3.5 times ebitda. Iain Simpson, analyst at Société Générale, says: “There is a strong strategic rationale for RB acquiring Pfizer Consumer Health but there is a price at which this potential acqui
Bill1703
20 Feb 2018
Re: The Big Brands - FCF yields "... what a shareholder ""should"" care about is the total return on his investment, not the payout in dividends.... The buyback exercise effectively bribes the shareholder with his own money ... which gives the impression ... that you are gaining more from the deal... The exercise of changing the payout ratio is to some extent doing the same thing... unless you have really grown the earnings (cash measurable) to match the % growth in the dividend, you are basically increasing the risk on the payout."I am certainly with you there, Games, and while I know I'll never persuade you on the merits of share buy-backs (when conditions are appropriate, of course), I am happy to agree on payout ratios. Yes, allowing policy creep here can boost (hard cash) dividends, which of course is an important (arguably, THE most important) part of the total return equation - but the higher the payout ratio, the less sustainable the dividend (or at least, any future growth therein) and hence the greater chance that what you gain on the divi you will, over time, lose on the SP part of the total return.Comparing (as I like to do) RB with immediate consumer-giant peers ULVR and DGE, it is interesting that RB continues with its more "prudent" policy of pegging payout to around 50% of underlying EPS (ie. dividend cover c.2x), whereas both ULVR and DGE have felt the need to run cover down (now respectively 1.6x and 1.7x most recent FY).... like the actual dividend quantum itself, the payout ratio is always a choice, not an economic obligation - and choices can be changed.As always, the best way is to look at true dividend "capacity" is to ignore the whims of policy and consider free cash flow, out of which sustainable dividends ultimately must paid. At £60, RB is now on a FCF yield of 5.0% FY17 (vs 4.5% previous) - relatively attractive against ULVR (4.6% FY17, up from 4.2%) and DGE (4.1% FY17, up from 3.3%).Even as we (understandably) dip below £60, it is this FCF profile which should provide considerable support to RB, and should ultimately drive the longer term recovery - even with the margin pressure alerted for the current year and the exceptional costs associated with business restructuring, there is a good chance that the overall quantum of FCF will edge up again this year, and continue to grow thereafter. Near term, it'll still be a case of "all bets off" if they end up buying the Pfizer business... but then, if they don't pay too much for it, it's unlikely to be the worst deal in the world (quite a big "if" admittedly, and the market will doubtless shoot first and ask questions later). And of course, it may still never happen....
gamesinvestor
19 Feb 2018
Re: The Big Brands - Wonderful Buy Backs... "I rather feel that you missed the point of my post."Indeed -- the buyback exercise effectively bloats the appearance that your dividend is increasing, when in fact what a shareholder ""should"" care about is the total return on his investment, not the payout in dividends.The buyback exercise effectively bribes the shareholder with his own money (part of the asset) which gives the impression (again illusion) that you are gaining more from the deal.The exercise of changing the payout ratio is to some extent doing the same thing -- you raise the dividend, but progressively, unless you have really grown the earnings (cash measurable) to match the % growth in the dividend, you are basically increasing the risk on the payout.It's a fools gold unless the company realistically increases the revenue and the income at the same rate, hence reducing the need to keep increasing the payout ratio.It's this latter aspect that's been driving the share prices of all these companies, together with the cheap borrowed money over the last 10+years.At the end of the day it's simple mathematics, somewhat disguised in the parlance of the annual reporting shenanigans.Games -- I guess it's enough on the topic -- we should agree to disagree I suppose.
Bill1703
19 Feb 2018
Re: The Big Brands - Wonderful Buy Backs... "I rather feel that you missed the point of my post."Yes, and apologies, I appear to have done so... but as always, open to enlightenment!
