Consumer Healthcare giant, Haleon, recently spun out of GSK plc has reported strong growth in their third quarter trading update and raised their guidance for the full year slightly. They now see organic revenue growth of 8.0- 8.5%% for the full year and for margins to be slightly improved, despite some additional currency impacts.
Haleon saw improved trading in their Oral Health category, where their Sensodyne brand has a leading position. Respiratory health products have benefited from the seasonal bugs that are going around. Their only weak spot was Vitamins, Minerals and Supplements which was up against tough prior year comparables.
Haleon shares opened 1% higher.
Steve Clayton, fund manager at HL Select at Hargreaves Lansdown:
“This is a good update from Haleon. Guidance is up and the gains are coming across the portfolio with a mixture of price and volumes driving the overall result. But no news on the Zantac litigation front, which continues to overhang both GSK and Haleon alike. We don’t expect to see news on that front before some key test cases have gone through the courts next year. In the meantime, though, Haleon is trading strongly and looks to be making good progress in paying down the demerger debts that GSK left it with.
We like Haleon for the strength of its brand portfolio and the defensive, cash generative nature of the business. Investors will need clarity on the Zantac issue before the stock can display its true potential, but we think its case is strong and once proven, the re-rating potential for the business is clear.”
