The plan to cut overheads, trim stock levels and halt costly promotions follows the abrupt departure of the company's chief executive in January and an underlying 11.4 per cent slide in 1998 profits announced on Friday.But the shake-up and a devalued Brazilian currency will cut up to 120 million pounds off pre-tax levels this year and lead to trimmed dividend growth as Reckitt attempts to remedy mistakes made in North America after it "lost its way".

Beset by economic problems in East Asia and Latin America and de-stocking in North America, the profits came in below expectations. The shares were the biggest losers in the FTSE 100 index, closing down 5.5 per cent at 731 pence.The group which markets Lysol disinfectant, Harpic lavatory cleaners and Dettol antiseptic warned it saw the negativeimpact from these three regions contining at least through the first half of 1999 with little relief seen until the year 2000.

Reckitt's 1998 underlying pre-tax profits slipped 11.4 per cent to 265.4 million pounds ($434.3 million) on flat sales of 2.2 billion pounds. The pre-tax fall was an even steeper 24.7 per cent once exceptional charges for plant closures, business sell-offs and year 2000 costs are taken into account.

Acting Chief Executive Michael Turrell said the action plan will cut 30-40 million pounds off annual costs at a one-off cost of 55-70 million. Reckitt will trim traditional half and full year promotional spending to reduce around two weeks worth of excess stocks in the global trade at a cost of 30 million.

Finance Director Steve Wilson said these one-offs, including a Brazilian devaluation effect of 15-20 million pounds, will cut Reckitt's pre-tax numbers by 100-120 million in 1999.

He also warned future dividend growth would be trimmed until the group's goal of double digitearnings growth was met. Reckitt's year dividend rose 5.4 per cent to 25.3 pence a share.

Turrell said the search for a new chief executive was continuing to replace Vernon Sankey, who resigned in January, and admitted that he was a candidate for the post.

Analysts said Reckitt was addressing issues that should have been dealt with years ago.

"Things are going to get worse, and 1999 numbers will be largely irrelevant. We have a pre-tax number of 235 million pounds pencilled in for 2000, but six months ago that figure began with a four," said one leading industry analyst.

That forecast puts Reckitt on the same 17 times price earnings rating as consumer products giant Unilever Plc implying there is still some hope of a white knight coming to take Reckitt out of its misery. "But why rush? Sorting out Reckitt is going take some time," said the analyst.

Reckitt's move to restore the group to health will mean job cuts amongst its 16,000 worldwide workforce and closure within its 42 plants across theglobe, although full details of these will come in the summer with the group's half-year results.

Turrell said the job cuts and closures would be spread across the globe, and would include Europe, which saw 1998 sales growth of 2.3 per cent and steady profit margins. he plan was aimed at returning the group to double-digit earnings growth. Group chairman Alan Dalby said Reckitt was seeking to correct mistakes which caused its performance to suffer in North America where Reckitt was slow to react to the spread of just in time ordering by its customers and was pre-empted by new products from its arch-rival Clorox Co.

Turrell said he was "very disappointed" with the 1998 results, and admitted it had taken its "eye off the market" on new product innovation after it lost out to Clorox's new bathroom cleaner and all purpose cleaner products in the US.