Reckitt’s new boss faces a Pepsi challenge

Now, the more obviously health-conscious Reckitt Benckiser is also giving Pepsi a go: hiring the drinks group's chief commercial officer, Laxman Narasimhan, as its new and first-ever externally appointed chief executive. Rather like those tasters of his cola, Mr Narasimhan faces a sticky and very public challenge: how to follow Rakesh Kapoor, who has helped Reckitt shares outperform the FTSE 100 index by 91 per cent since 2011, but at a point where the group's margins - and share price - appear to have peaked. Investors have long speculated whether Reckitt now needs to reset its near record high operating margin given the slowdown in revenue growth - and whether a new chief executive would choose to do that. Reckitt has been accused of under-investment in its brands in recent times, and analysts at AJ Bell reckon Mr Narasimhan could come in and change that. A further challenge will be dealing with a US Department of Justice case against the former Reckitt subsidiary Indivior, which has been charged with using a fraudulent marketing scheme to boost sales of an opioid addiction treatment.

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