Reckitt: Dettol and Durex maker reveals 'unsatisfactory' drop in sales over latest quarter

It said compliance procedures found “an understatement” of trade expenses for the fourth quarter and prior quarters of 2023, which have also impacted upon adjusted profits by around £35m.

“Following investigation, we concluded a small group of employees had acted inappropriately and we are taking necessary disciplinary action,” the company said.

“We are confident this is an isolated incident specific to these two markets and does not impact our 2024 outlook and medium-term goals.”

It came as the group, which also makes Nurofen and Gaviscon, said like-for-like net revenues fell by 1.2 per cent over the final quarter of 2023, with overall net revenues down 7 per cent to £3.56bn.

This included a 2 per cent decline in its health division as it was impacted by the “phasing and shape of cold and flu season”, while like-for-like nutrition volumes slid by 14.8 per cent.

Kris Licht, chief executive officer of Reckitt, said: “While our performance in Q4 was unsatisfactory, we look to 2024 and beyond with confidence.

“We target another year of mid-single-digit growth in Health and Hygiene, driven by a more balanced contribution from price, mix and volume.”

Reckitt added that like-for-like revenues for the full year were up 3.5 per cent in 2023 against the previous year, driven by rises across its hygiene and health businesses.

The company said it now expects to deliver like-for-like revenue growth of between 2 per cent and 4 per cent next year.

Shares in the company were down 9.9 per cent in early trading to 5,258p.

Commenting on the results, Russ Mould, investment director at AJ Bell, said: “It’s clear from industry trends that cash-strapped consumers have shifted to cheaper alternatives including supermarket own-brand items.

“As the owner of a large portfolio of well-known brands, Reckitt has found life a lot tougher and its latest results suggest its pricing power isn’t as strong as some people thought.

"The idea that it can keep pushing up prices without damaging demand has gone out the window as its fourth quarter numbers are truly miserable.

"It looks like people are voting with their feet and going for the cheaper option.

“Reckitt’s results are plagued by a multitude of problems. Sales volumes fell 4.3 per cent in the fourth quarter which is a worrying sign for the company.”

It had also reported declining health sales and a big drop in nutrition revenue, he added.

He continued: "For a company that was once seen as an industry leader, Reckitt has been a big disappointment in recent years and the latest results keep that theme going.”