27th October 2021
Good morning Travel restrictions may be easing but Heathrow airport has warned that passenger numbers may not return to 2019 levels until 2026. Britain's biggest airport has racked up £3.4bn in losses since Covid began in March last year.
- The return of flu season boosts Reckitt
- Fintech heavyweights Klarna and Stripe team up
The return of flu season boosts Reckitt
What’s going on?
Households goods giant Reckitt Benckiser reported strong sales growth in the three months to September as consumers stocked up on cold and flu remedies.
Why is this important?
Reckitt makes a vast range of health and hygiene products and its brands are seeing different levels of demand as economies emerge from the pandemic.
The relaxation of Covid rules has led to more socialising which means more people catching colds and the flu. This winter is set to be particularly rough as immune systems were sheltered from germs last year during lockdown. This is good news for sales of Reckitt's Strepsils and Nurofen products.
On the flip side sales of cleaning products like Dettol, which benefited from strong growth at the peak of the pandemic, have since stalled as hygiene habits ease back.
Analysts had expected that Reckitt’s sales would drop 0.7% with consumers cleaning less. But the sales of its cold and flu medicines have been enough for the FTSE 100 company to report a 3.3% increase in revenue between June and September to £3.3bn.
Reckitt is so confident that the strong performance will continue that it’s upgraded revenue forecasts for the rest of the year. It now expects revenue for the full year to grow 1-3% instead of 0-2% and it will keep profit margins unchanged – and that’s despite facing raw material costs up by 10%.
Reckitt’s shares jumped 6% as investors cheered the better-than-expected results. Like many companies it’s facing rising costs but its confident that it can grow revenue and keep margins intact by a mixture of product price increases, cost cutting elsewhere and reducing the size of packaging.
Fintech heavyweights Klarna and Stripe team up
Klarna and Stripe, the world’s most valuable private fintech companies, have struck a landmark partnership making Klarna's buy-now-pay-later (BNPL) payment options available to millions of internet businesses across 20 countries including the UK and US.
Founded in Sweden in 2005, Klarna pioneered BNPL which allows customers to spread purchases over multiple interest-free payments instead of using a credit card. The sector has flourished in recent years as online shopping has soared during the pandemic. Klarna was valued at $46bn earlier this year.
San Francisco-based Stripe was launched in 2009 by two Irish brothers. It builds software that helps millions of businesses accept payments online. Its last funding round valued the business at $95bn.
Both companies are expected to list on public markets in the near future.
The partnership means that Stripe’s customers will be able to use Klarna as a payment method without striking a direct partnership with the Swedish company.
Klarna typically partners with retailers directly to embed its checkout button. The deal will give Klarna a much wider reach of customers and allow Stripe to enter the fast-growing BNPL sector as rivals like Square and PayPal make big bets in the space.
Stat of the day
This week Elon Musk's wealth rose $36bn to $255bn, making him the world's richest man
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