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Haleon posts double-digit sales growth in bumper first half

The group became the UK's largest stock exchange listed in a decade when it split from pharmaceutical giant GlaxoSmithKline in July.

Haleon posts double-digit first-half sales growth as consumer split from GSK eases heartburn litigation concerns in the US

  • First interim results as an independent company show strong growth
  • Haleon boosted by strong performance in top brands like Panadol and Theraflu
  • Company Says It Isn’t Liable for Claims Related to U.S. Heartburn Drug Litigation

Haleon posted double-digit revenue growth in its first interim results as an independent publicly traded company.

The group, which became the UK’s largest stock exchange listed in a decade when it split from pharmaceutical giant GlaxoSmithKline in July, saw its revenue jump 13.4% to £5.19bn sterling in the six months to June 30 as adjusted operating profits jumped 12.2% to £1.19 billion.

Haleon also told investors it does not believe it is responsible for claims arising from US litigation over heartburn drug Zantac, which has hit pharmaceutical stocks significantly in recent months amid allegations that the compound contain a probable carcinogen.

The group became the UK's largest stock exchange listed in a decade when it split from pharmaceutical giant GlaxoSmithKline in July.

The group became the UK’s largest stock exchange listed in a decade when it split from pharmaceutical giant GlaxoSmithKline in July.

It formally denied GSK and Pfizer’s litigation claims “on the basis that the scope of indemnities under the joint venture agreement only covers their consumer healthcare businesses as they were conducted when they were created.” of the JV in 2018″.

Haleon shares reacted positively to the Zantac update, rising 1.4% to 262.9p in early trading, having been battered in recent weeks by concerns over its potential culpability.

Steve Clayton, fund manager at HL Select, said: “The litigation surrounding Zantac, which was previously marketed by GSK and Pfizer is a distraction, but Haleon itself has never marketed this product and we see no costs significant financial costs, other than litigation defense, being incurred by Haleon as a result.

The group attributed its stellar first-half figures to “strong brand strength performance”, with big-name drugs like Panadol, Theraflu, Otrivin, Advil and Centrum doing particularly well.

This helped it increase its adjusted operating profit margin by 90 basis points from last year’s levels, while adjusted earnings per share rose 21.5% to 9.6p.

Meanwhile, free cash flow fell from £364m last year to £553m over the period.

Brian McNamara. The boss of Haleon, underlined the maintenance of the market share in most activities, “demonstrating that the continuation of the investments generates sustainable growth, even in difficult market conditions”.

He added, “I’m also pleased that we achieved margin expansion in the first half despite significant cost inflation and the absorption of business standalone costs.”

“Strong free cash flow generation reinforces confidence in our ability to deleverage quickly over the next few years.”

Haleon left its operating margin and revenue guidance unchanged for the full year, with organic growth expectations of 6-8%, but warned that the positive momentum would continue at a slower pace in the third quarter in a context of macroeconomic challenges and uncertainties.

Victoria Scholar, Head of Investments at Interactive Investor, said: “Today’s results are broadly upbeat with strong first-half revenue and earnings growth lifting the shares towards the top of the FTSE 100.

“While a tougher economic backdrop lies ahead, some of this pain will be offset by a strong cold and flu season for Haleon, driving demand for some of its products.

“As a seller of consumer staples, Haleon appears to be relatively well positioned to weather an economic downturn.

“The biggest risk is that consumers will abandon branded products like Panadol, Advil and Aquafresh for cheaper unbranded rivals instead. Uncertainty around Zantac remains another overhang for stocks.

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