Reckitt Benckiser to spin off pharmaceutical unit

RECKITT Benckiser, maker of Cillit Bang and Nurofen, is to spin off its pharmaceutical unit into a separate business as it focuses on its consumer healthcare and hygiene brands which helped half-year pre-tax profits rise 16 per cent to £1.04billion.

RECKITT Benckiser, pharmaceuticals, Reckitt Benckiser profits up, Reckitt Benckiser £1.04bn, Chief executive Rakesh Kapoor. Reckitt Benckiser pharmaceutical unit, pharmaceutical unit made separate, Reckitt Benckiser is to focus on consumer healthcare which helped its profits rise 16 per cent[AFP/GETTY]

Operating profits at Reckitt’s pharma division fell 20 per cent in the six months to June 30 2014 to £183million, as its heroine treatment Suboxone was hit by copycat versions. 

The division will be listed on the London Stock Exchange within 12 months, with existing shareholders receiving shares in the spun-off entity, equal to their holding in the overall group. Reckitt is expected to keep a share in the new business once it is floated.

It is not as clean as if they had found a trade buyer. But it allows Reckitt to focus on the rest of the business and to keep a foothold in pharma

Hargreaves Lansdown equities analyst Keith Bowman

Hargreaves Lansdown equities analyst Keith Bowman said: “It is not as clean as if they had found a trade buyer. But it allows Reckitt to focus on the rest of the business and to keep a foothold in pharma.” 

Reckitt chief executive Rakesh Kapoor said: “We believe RB Pharmaceuticals has the potential to deliver significant value creation as a stand-alone business. 

Reckitt’s pre-tax profits were buoyed by strong performances from Durex and Gaviscon, though revenues fell back 6.5 per cent to £4.68billion.

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