Haleon, the manufacturer of Panadol painkillers in Waterford, has revised its revenue forecast upwards after implementing price increases. The company, known for producing Sensodyne toothpaste, has also raised its full-year sales predictions following a 10% increase in revenue during the first six months. This surge can be attributed to consumers stockpiling over-the-counter brands.
Haleon now anticipates a revenue growth of 7% to 8% for the year, surpassing the previous forecast of 4% to 6%. Pain relief brands such as Voltaren and Fenbid have been particularly successful in driving these positive results. Additionally, the company has projected a 9% to 11% growth in adjusted operating profit for the full year, measured at constant currencies.
Last summer, Haleon separated from pharmaceutical giant GSK and is now focused on selling non-core brands and streamlining its portfolio under the leadership of CEO Brian McNamara. The company is also implementing a cost-cutting program that aims to reduce expenses by £300m (€348m) annually over the next three years. Mr. McNamara believes there is a significant opportunity to simplify Haleon’s operations, although he did not disclose the potential number of job cuts that may occur.
As part of its strategic initiatives, Haleon has agreed to sell its ringworm and athlete’s foot treatment, Lamisil, to Karo Healthcare for £235m. Despite this divestment, Mr. McNamara stated that the company does not have plans for a major divestment program in the near future.
Following the trading update, the company’s stock experienced a 3% decline. Analysts attribute this drop to potential share sales by Pfizer and GSK, who currently hold significant minority stakes in Haleon. Despite this setback, the improved outlook for the company should not be overshadowed.
In the first half of the year, revenue from vitamins, supplements, and minerals experienced a slight decrease of 0.5%. This decline can be attributed to the tremendous spikes in demand witnessed last year due to the COVID-19 pandemic, particularly for brands like Emergen-C vitamin C products.
In conclusion, Haleon’s revised revenue forecast and increased sales predictions demonstrate the company’s ability to adapt and thrive in the consumer health industry. With a focus on streamlining operations and reducing costs, Haleon is well-positioned for future success. However, challenges remain, including potential share sales by major stakeholders. Nonetheless, the company’s positive outlook should not be overshadowed by these concerns.
Additional reporting by the Irish Examiner.