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Reckitt Benckiser Reports Lower Profit Amid Revenue Decline

Reckitt Benckiser sees a drop in fiscal 2024 profits and slight revenue decline, yet maintains a higher dividend. Investors may weigh the company's growth estimates against recent performance.

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AI Rating:   5
Earnings Per Share (EPS)
In fiscal 2024, Reckitt Benckiser's earnings per share were reported at 203.2 pence, which reflects an 11.1% decline from the previous year's 228.7 pence. This substantial drop in EPS could signal to investors potential challenges in profitability.

Revenue Growth
The company reported a net revenue drop of 3% to 14.17 billion pounds from 14.61 billion pounds the previous year. However, net revenue grew by 1.4% on a like-for-like basis. This indicates mixed signals for future revenue potential, especially with flat growth in Europe and low-single digit growth projected in North America.

Profit Margins
The profit before income tax decreased from 2.40 billion pounds last year to 2.10 billion pounds this year, which could indicate challenges in keeping margins stable against declining revenue. The slight increase in core profitability from adjusted earnings per share indicates some operational efficiency, but the decline in the standard EPS raises concerns.

Future Guidance
Looking ahead, Reckitt anticipates adjusted earnings per share growth for fiscal 2025 and projects group LFL net revenue growth between 2% to 4%. The company's medium-term guidance suggests more consistent growth in the upcoming years. While investors will appreciate the growth targets, the performance metrics from fiscal 2024 may temper expectations.

Overall, investors should consider Reckitt's dividend increase of 5% as a positive sign of returning value, despite the concerning declines in profit and revenue. Additionally, the projected growth in emerging markets and specific targets in core categories may still offer some upside for shareholders.
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