Andrew Witty, chief executive of GlaxoSmithKline (GSK), refuses to be drawn on the Chinese government's accusations of dubious business conduct. But the ongoing investigation meant the pharmaceutical giant's half-year results, which referenced its high-profile asset swap with rival Novartis, risk falling on deaf ears.
In a media briefing, Mr Witty was only prepared to say that the company was "co-operating fully" with authorities and applied a "zero-tolerance policy" to bribery across the board. He admitted "the size of GSK" made it possible for staff to step outside of existing protocols, and that staff dismissals were a possibility, depending on case findings.
Meanwhile, Mr Witty is concentrating on the Novartis deal, which is due for completion in the first half of next year. He said the asset swap would make GSK "a more stable business", and secure future growth in vaccines, pharmaceuticals and consumer healthcare. These divisions are now expected to account for half of group revenues and generate consistent mid-single-digit sales growth over the coming years.
For the last six months, however, GSK reported a 4 per cent year-on-year decline in pharmaceutical and vaccines sales. That was due to increased competition in the US from generic copies of its products, specifically dietary supplement Lovaza.
Analysts at Deutsche Bank expect pre-tax profits of £6.4bn for the full year to December, giving EPS of 97.2p.
GLAXOSMITHKLINE (GSK) | ||||
|---|---|---|---|---|
| ORD PRICE: | 1,503p | MARKET VALUE: | £72.9bn | |
| TOUCH: | 1,502p-1,503p | 12-MONTH HIGH: | 1,733p | LOW: 1,502p |
| DIVIDEND YIELD: | 5.3% | PE RATIO: | 15 | |
| NET ASSET VALUE: | 126p* | NET DEBT: | 211% | |
| Half-year to 30 Jun | Turnover (£bn) | Pre-tax profit (£bn) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2013 | 13.1 | 2.7 | 41.4 | 18 |
| 2014 | 11.2 | 1.9 | 27.5 | 19 |
| % change | -15 | -30 | -34 | +6 |
Ex-div: 6 Aug Payment: 2 Oct *Includes intangible assets of £12.1bn, or 249p a share | ||||
