The world's biggest household cleaning goods group, Reckitt Benckiser, reported a higher-than-expected 16 per cent rise in 2005 net profit on Wednesday, and set new sales and profit targets for 2006.
The British maker of Lysol disinfectants and Mr Sheen polish posted 2005 net profit of £669 million ($1.17 billion), ahead of analysts' forecasts of £649-655 million.
The annual dividend rose 15 per cent to 39 pence a share.
Reckitt's profit rise matched its target for at least a mid-teens percentage rise at actual exchange rates, while 2005 underlying sales rose 6 per cent at constant exchange rates towards the top of its target range for a 5-6 per cent rise.
The Finish and Calgonit dishwasher products group set its 2006 targets for percentage sales growth in the mid-teens, including the group's recent acquisition from Boots, and a low double-digit rise in net profit, both at constant currencies.
"The targets should be seen against a background of increasingly challenging market conditions and still limited visibility into the BHI (Boots Healthcare International) business after only one week of ownership," said chief executive Bart Becht in a results statement.
Reckitt said its 2005 operating margin rose to 20.1 per cent from 2004's 19.3 per cent despite pressure from higher oil prices and related packaging costs, hitting its margin target early.
The group was aiming to push operating margins to 20 per cent by 2006 to match its big US peers such as Colgate-Palmolive, Clorox and Procter & Gamble.
Reckitt shares rose about 25 per cent in 2005, outperforming its peers and many analysts say this outperformance is set to continue due to strong sales growth driven by innovation and marketing, and cost savings from its BHI acquisition.
Its shares closed at £19.35 yesterday, valuing the group at about £14 billion.
Reckitt completed its deal to buy Boots's non-prescription drug business for £1.9 billion on February 1 stwhich adds Boots's Nurofen painkillers and Strepsils throat lozenges to Reckitt's Lemsip and Disprin cold remedies, and promised £75 million of cost savings by 2008.