Panadol maker Haleon sees profit sink on inflation

Haleon, the British consumer healthcare firm spun off by drugs giant GlaxoSmithKline, posted tumbling annual profit Thursday owing to rising costs.

Net profit sank more than a quarter to £1.1 billion last year compared with 2021 when it was part of GSK, Haleon said in a results statement.

Revenue jumped 14 per cent to £10.9 billion last year, as it lifted prices to compensate for higher commodity and freight costs as well as unfavourable currency effects.

A strong cold and flu season meanwhile boosted sales of its Theraflu treatment and pain relief drug Panadol.

The results sent Haleon’s share price sliding 4.6 percent on London’s falling stock market.

“While the business has been grappling with cost inflation, foreign exchange losses and other costs, it has been trying to offset these pressures by raising prices and forward buying,” noted Interactive Investor analyst Victoria Scholar.

“However, the risk is that consumers could trade down to cheaper unbranded alternatives instead amid the cost-of-living crisis and falling real wages.”

Haleon, whose brands include Centrum multivitamins, Sensodyne toothpaste and anti-inflammatory gel Voltaren, was spun off onto the London stock market last July.

“2022 was an extraordinary year for Haleon, having successfully demerged from GSK to become the first listed company 100-percent focused on consumer health,” said chief executive Brian McNamara.

Turning to the outlook, the group forecast revenue growth in the range of 4-6 per cent this year.