Shares in the maker of Dettol and Nurofen fell 6% as investors braced for the impact of Trump’s tariffs.
The FTSE 100 consumer goods business Reckitt Benckiser, which is based in Slough and makes products including Durex condoms and Harpic bleach, said it was “closely monitoring” the evolving situation around trade tariffs and possible effects on its supply chain.
Its share price dropped 6% in early trading on Wednesday after senior management warned volatile market conditions could affect the sale of its lagging cleaning products business.
The group has put its Essential Home division, which includes brands such as Cillit Bang and Air Wick, up for sale. Net revenue in this part of the business dropped by 7% on a like-for-like basis in the first three months of the year to £482m, compared with a 3% rise in the core part of the group.
The chief executive, Kris Licht, told analysts in an investor call that while the company was encouraged by buyer interest expressed in the business, “we recognise that market conditions may impact this timeframe”.
Chris Beckett, of the fund management business Quilter Cheviot, noted that difficult market conditions could make it difficult for potential buyers to raise money to buy the business, “especially for private equity firms trying to raise finance in the current bond market”.
Elsewhere, the chemicals maker Croda’s shares jumped by as much as 9% on Wednesday after it said it would pass higher costs associated with tariffs on to its customers.
The FTSE 100 company, which sells chemicals to other businesses for a huge variety of consumer goods such as skin cream, shampoo and suntan lotion, said that while its local manufacturing and procurement model was well-balanced and helped limit its direct exposure to tariffs, it would apply a “tariff surcharge” to cover any further incremental costs.
The comments, combined with a reported 9% rise in revenue at constant currency to £442m, sent Croda to the top of the FTSE 100’s biggest risers on Wednesday.
The chemical specialist said it recognised that the political and economic environment was now “less predictable”, but it still expected to report an annual adjusted pre-tax profit between £265m and £295m this year.
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While big companies are scrambling to keep up with the potential costs and changing parameters of Trump’s trade war, the US administration has suggested that its tariff standoff with China could de-escalate.
On Tuesday, Trump told a White House news conference that high tariffs on goods from China would “come down substantially, but it won’t be zero”. It helped spark a broad rally in global stock markets, with the US blue chip S&P 500 index rising by 2.5%. The recovery also spread to Europe on Wednesday, with the UK’s FTSE 100 index up 1.4%.
