Rakesh Kapoor

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Consumer health giant Reckitt Benckiser (RB) has announced this morning that Rakesh Kapoor will retire from his position as CEO by the end of 2019.

His departure from the Durex and Strepsils maker will come after more than 8 years as CEO and 32 years at the company.

RB’s board has now initiated a formal process to appoint his successor, considering both internal and external candidates.

Chairman Chris Sinclair commented: “Under Rakesh’s leadership, RB has been transformed from a household cleaning business to a world leader in consumer health and hygiene. Rakesh has been both the visionary and the architect behind this strategic portfolio transformation since the mid-2000s. He has also developed RB2.0 - an organisation designed for sustainable growth and outperformance.

“On behalf of the Board, I want to express our appreciation for his vision, passion and leadership over his long and distinguished tenure. We are now commencing a formal and comprehensive process to appoint a successor, considering both internal and external candidates.”

Kapoor added: “It has been a huge privilege to lead RB and I am very proud of the hard work and commitment of our people in delivering our success and many achievements. The last two years in particular, have been transformational with the acquisition of Mead Johnson, the catalyst for the creation of our two business units, Health and Hygiene, Home.

“2020 will herald a new decade and I believe now is a good time for new leadership to take this great company through the next phase of outperformance. I will remain fully focussed on driving the business until a successor is in place.”

RB said that since Kapoor became CEO on 1 September 2011, the company has delivered total shareholder return (TSR) growth of 130%, a CAGR of 12%, circa double of FTSE 100 and ahead of most peers in consumer, health and nutrition.

Reckitt shares have dropped 1.8% to 6,141p on the news.

Morning update

Following the resounding parliamentary rejection of Theresa May’s Brexit deal last night the Food and Drink Federation has called for an extension of Article 50 to avoid a cliff edge exit in March.

FDF chief executive Ian Wright said: “The Prime Minister’s deal has been decisively rejected and it is now vital that the political leadership find a way to indicate what alternative should be pursued.

“We are calling for an extension to Article 50 in order for parliament to decide what our next steps are; whether that is a new deal, a referendum, an orderly exit from the EU without a deal at a later date, or a general election.

“The government should now be looking to speak with representative organisations such as the FDF, to ensure they are pursuing an alternative that prevents further damage to the UK’s wider economy.”

British Retail Consortium chief executive Helen Dickinson commented: “The events in Westminster are cause for serious concern. A no deal Brexit means the public will face higher prices and less choice on the shelves. British businesses desperately need certainty about the UK’s future trading relationship with the EU and will be severely disadvantaged by a no deal.

“This really is crunch time and politicians must come together around a workable solution that safeguards consumers from the costs and disruptions of new constraints on the tariff-free and frictionless trade we currently enjoy with partners in the EU. The time for Parliamentary games is over.”

Elsewhere this morning, Finsbury Food Group has released a trading update for the six months ended 31 December 2018 ahead of its interim results on 25 February.

The bakery and CAKE group said that like for like sales were up 0.5% on a like for like basis to £145.5m in the period.

However, due to the prior year benefitting from the trading of the bakeries closed in the first half of the year, total group revenue, including the closed businesses, declined 3.5% to £152.3m.

Growth in like for like sales was attributed to the Group’s core division, UK Bakery, which grew by 1.7% “despite a difficult macro environment with sustained inflationary pressure” which “illustrates the importance of the group’s strategic diversification and ongoing investment programme”.

Its overseas division declined by 8%.

The integration of its recent acquisition of Ultrapharm, is continuing to progress and additional capacity will be delivered by the end of the existing fiscal year.

Finsbury stated: “The group is now a diverse multi-channel speciality bakery group and despite the market conditions, is well placed to continue to drive efficiency, deliver innovation and maintain its leading position in the market.”

Meanwhile, Poundstretcher and Bargain Buys increased its like for like sales by 1.2% in the run-up to Christmas.

In the period from 30 September to 29 December total sales grew 11% to £152m which was a “reasonably good” performance “during a tough time for the retail industry on the high street”.

Sales growth was driven by store openings, with footfall up 2.3% on the previous year.

The group added that in the two weeks from 30 December to 12 January sales are “increasing sharply due to our great pricing , new reset stores and improved shopping experiences”.

Overall sales for the last 2 weeks have been £19m vs £15m last year which is up 26% for the 2 weeks.

In its financial year to date overall sales are trading up 15% vs last year – driven by the introduction of 57 new stores this year, 22 of these opened in the last 11 weeks.

The FTSE 100 has opened just 0.1% lower after last night’s drama in parliament at 6,888pts.

Finsbury Food Group has plunged 12.4% to 81.5p after this morning’s first half sales update.

Other fallers include Premier Foods (PFD), down 2.3% to 32.7p, Stock Spririts Group (STCK), down 1.6% to 212.5p, McColl’s (MCLS), down 1.6% to 55.1p, Hilton Food Group (HFG), down 1.5% to 920p and Unilever (ULVR), down 1.2% to 4,030.5p.

Risers so far today include Nichols (NICL), up 4.6% to 1,579p, Greene King (GNK), up 1.35 to 610.8p and Marks & Spencer (MKS), up 1.2% to 279.1p.

Yesterday in the City

The FTSE 100 was up 0.6% before last night’s Brexit deal vote, but the pound rose 0.1% against the dollar to $1.287 even after the decisive rejection of the exit plan on hopes a softer exit could now be agreed – or no Brexit at all - after a drop of more than 1% earlier in the day.

On a quiet day for grocery and fmcg newflow, large consumer stocks were generally on the up yesterday.

TATE & Lyle (TATE) was amongst the strongest risers, climbing 2.5% to 688.2p, while Ocado (OCDO) was up 2.1% to 896p, Just Eat (JE) rose 2.2% to 625p and Reckitt Benckiser was up 1.7% to 6.252p.

Other risers included SSP Group (SSPG), up 1.6% to 691.8p, Britvic (BVIC) up 1.4% to 867p and Unilever (ULVR), up 1.2% to 4,078.5p.

Fallers yesterday included Finsbury Food Group (FIF), down 7.5% to 93p ahead of this morning’s trading update, Glanbia (GLB), down 1.4% to €15.88, Nichols (NICL), down 2.7% to 1,510p and McBride (MCB), down 2.7% to 136.2p.