British household goods firm Reckitt Benckiser (RB) has decided to spin off its US-based pharmaceuticals division, it announced on Monday after a strategic review.
The company will float the unit, RB Pharmaceuticals, on the London stock market later this year, it said in a statement which also revealed that first-half net profits jumped by almost a quarter.
“We believe that RB Pharmaceuticals has the potential to deliver significant long term value creation as a stand-alone business,” said Reckitt chief executive Rakesh Kapoor in the earnings release.
“We have therefore decided to pursue a demerger of RB Pharmaceuticals with a separate UK listing. We expect this to take place over the next 12 months.
“This will also allow RB to focus on its core strategy to be a global leader in consumer health and hygiene.”
Reckitt added on Monday that group net profits surged by 23 percent to £812 million ($1.4 billion, 1.0 billion euros) in the six months to June 30 from a year earlier, boosted partly by cost-cutting.
Revenues however dipped seven percent to £4.667 billion in the reporting period, hit by adverse currency moves. At constant exchange rates, revenues grew three percent.
Reckitt Benckiser’s top-selling brands include household cleaner Cillit Bang, Durex condoms and Nurofen/Nureflex pain relief tablets.
In morning deals, Reckitt shares jumped to the top of the risers board on the London stock market.
The group’s share price gained 2.96 percent to 5,220 pence on London’s FTSE 100 index of top companies, which was down 0.04 percent at 6,789.15 points.