Haleon PLC on Wednesday reported higher profit in the first quarter of 2024, as cost of sales decreased by more than revenue.
The Surrey, England-based consumer health arm spun out of GSK PLC, backed its annual guidance and reported a ‘solid’ quarter.
Revenue declined 2.2% on-year to £2.92 billion in the three months that ended March 31, as revenue for Haleon’s Pain Relief and Respiratory Health units declined amid a weaker Covid season in China compared to a year ago.
Revenue rose by 3.0% on an organic basis, however.
Cost of sales were reduced by 5.7% to £1.08 billion from £1.15 billion, helping pretax profit to grow by 8.9% to £590 million from £542 million.
Haleon noted that its multivitamin brand Centrum recorded high-single-digit percentage growth in organic revenue, benefited from higher prices in North America. Haleon’s Vitamins & Mineral Supplements unit, which includes Centrum, recorded total revenue growth of 4.2% to £422 million in the recent quarter from £405 million a year ago.
Further, the Oral Health unit, which includes Sensodyne toothpaste, had revenue growth of 5.3% to £854 million from £811 million.
Pain Relief revenue declined 8.6% to £662 million from £724 million, amid ‘tough comparatives’ from a year ago, a period that saw strong demand for Fenbid in China. Fenbid gel contains ibuprofen and reduces pain and inflammation.
Respiratory Health revenue fell 7.8% to £470 million from £510 million due to lower demand for Contac in China. Contac helps with headache, pain, and nasal congestion, and demand increased after the country lifted Covid restrictions in the first quarter of 2023, leading to ‘strong cold and flu comparatives’.
Looking ahead, Haleon still predicts annual organic revenue growth in the 4% to 6% range. Chief Executive Officer Brian McNamara said: ‘First quarter trading was solid and in line with guidance shared when we reported FY 2023 results.’
McNamara added: ‘Regionally, whilst growth was held back in the US from inventory adjustments by some retailers, Haleon’s consumption in this region was strong, up mid-single digit and ahead of the market. As such, we remain confident of delivering on our FY guidance.’
Haleon shares were down 1.6% to 334.10 pence each on Wednesday morning in London.
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