MARKET REPORT: Haleon shares rise as Sensodyne toothpaste maker unveils plans for a £500m buyback

Shares in Haleon rose after toothpaste maker Sensodyne revealed plans to return £500 million to investors this year.

The FTSE 100 company’s major share buyback program came about as sales of its Otrivine nasal drops and cough syrups flew off the shelves during a tough cold and flu season.

After rising 6 percent in the final three months of last year, revenues rose 8 percent to £11.3 billion in 2023, while profits rose slightly to £1.63 billion.

Haleon reported strong sales in Central and Eastern Europe and Otrivine performed well in the Middle East and Africa. It expects the group’s turnover to grow between 4 and 6 percent this year.

Debt has fallen by more than £2 billion since it was spun off from the merged consumer healthcare division of GSK and Pfizer 18 months ago.

To cut costs, the company divested a fungal drug brand last year and sold its lip balm brand Chapstick for £340 million in January.

It said: ‘By selling these we can accelerate growth.’ Derren Nathan of Hargreaves Lansdown said a “defensive portfolio” of painkillers and toothpaste is “less sensitive to swings in the economy than more discretionary categories”.

Haleon, which is also behind Advil painkillers, was hovering at 330p in July 2022. Yesterday it rose 5.6 percent, or 17.5p, to 331.45p.

Before its listing, it was a joint company with 68 percent owned by GSK and the rest controlled by pharmaceutical giant Pfizer.

Now the couple owns 4.2 percent and 32 percent respectively.

GSK shared good news after avoiding another day in court by reaching a confidential settlement in a case alleging that its discontinued heartburn drug Zantac caused cancer.

The pharmaceutical giant said the settlement reflects its “desire to avoid the distraction associated with protracted litigation,” adding that it “does not acknowledge any liability in this settlement.” Shares fell 0.3 percent, or 5.2p, to 1664.6p.

Stock Watch – ADF

ADF, which rents costume and make-up trailers to the British film and TV industry, is feeling the impact of strikes between May and November by American writers and actors.

ADF, which supported the creation of the final season of Netflix hit The Crown, said producers are rushing to reorganize their schedules at short notice.

Turnover is expected to rise 11 percent to £34.8 million in 2023, while profits will fall by almost 80 percent to £1.1 million. Shares fell 8.5 percent, or 4.5p, to 48.5p.

In the broader market, the FTSE 100 rose 0.07 percent, or 5.04 points, to 7,630.02 and the FTSE 250 rose 0.22 percent, or 41.29 points, to close at 19,054.87.

Hopes for rate cuts remained after US inflation rose 0.3 percent in January.

And bitcoin, the world’s largest cryptocurrency, continued to approach the record high of $69,000 (£54,600) it reached in November 2021.

Energean rose 4.1 percent, or 40.5 cents, to 1,020 cents after the energy company started production from its fourth well in Israel and signed a 15-year gas contract that will add about £1.6 billion in revenue.

There were also big gains for energy services company Hunting after it returned to a £4m profit in 2023 after making a £1.9m loss the year before.

Revenues rose 28 percent to £736 million, sending shares up 11.5 percent, or 34.5p, to 334.5p.

Another riser was Howden Joinery, after the kitchen supplier’s sales last year were roughly in line with the 2022 record.

Shares rose 7 percent, or 54.4p, to 827p.

Hammerson, which owns Birmingham Bullring and Brent Cross shopping centres, posted solid results for 2023 as shoppers flocked to stores again. Shares rose 2.5 percent, or 0.62p, to 25.4p.

Demand for immigration services such as running deportation centers and managing housing in Britain and Europe saw Serco rise 4.5 percent, or 8.1 cents, to 187.3 cents.

The outsourcing giant also outlined plans to launch a £140 million share buyback.

By contrast, the London Stock Exchange Group fell 0.4 percent, or 36p, to 8876p after profits fell 3.7 percent to £1.2 billion last year.