Haleon (LON:HLN) Boosts Dividend, Shares Bounce Off 52 Wk Low

Haleon's share price (LON: HLN) hit a new 52 week low at 346.10p early, before rallying somewhat to sit comfortably above 360p. While the company announced a dividend hike in H1 results, there is clearly broader market concerns surrounding regional performance disparities, as well as the organic growth guide.

The consumer health giant, announced a 10% increase in its interim dividend following a robust first half that highlighted certain market challenges.

The company declared an interim dividend of 2.2 pence per share, payable on September 18, 2025, to shareholders of record on August 15, 2025. This is in line with their policy of distributing approximately one-third of the prior year's full-year dividend.

Haleon's H1 free cash flow surged to £734 million, a £184 million increase year-on-year (excluding divestment proceeds from ChapStick). This was primarily driven by progress on working capital initiatives.

The company actively returned capital to shareholders, purchasing 95.2 million ordinary shares for approximately £370 million as part of its £500 million share buyback program. Haleon also completed the acquisition of the remaining 12% equity interest in its China OTC JV for £174 million, a move designed to enhance its strategic and operational flexibility in the crucial Chinese market.

Organic revenue growth showed a mixed picture. EMEA & LatAm (+5.2%) and Asia-Pacific (+5.0%) performed well, offsetting a slight decline of 0.4% in North America, which the company attributed to a weak US consumer and retail environment. Overall, H1 organic revenue growth was +3.2%, with +2.4% from price and +0.8% from volume/mix. Oral Health continued to be a star performer, delivering organic revenue growth of +7.6%.

“I am pleased with the significant progress we are already making with our productivity programme to simplify our supply chain and drive gross profit margin,” said Brian McNamara, Chief Executive Officer. “This contributed to our strong organic operating profit growth while investing in A&P and R&D. As a result, we are upgrading our guidance to high-single digit organic operating profit growth for the year.”

Haleon now expects organic revenue growth of around 3.5% for FY 2025 and high-single digit organic operating profit growth. Net M&A is projected to negatively impact 2025 revenue and adjusted operating profit growth by approximately 2.0% and 5.5%, respectively. The company anticipates net interest costs of around £270 million, an adjusted effective tax rate of approximately 24%, and a non-controlling interest charge of around £15 million.

The increased dividend and strong cash flow are positive signs, but the company faces challenges in key markets and from its M&A activities. Markets will be closely watching the company's performance in the second half of the year and its ability to navigate a potentially weakening global economy.