Andrew Witty, chief executive of GlaxoSmithKline (GSK), is "committed to rebuilding group sales" after a dismal year that almost halved net profit - and even knocked 'core' operating profit back by 6 per cent at constant currencies. The respiratory business is the main culprit. Launches of new products Anoro and Breo last year were dampened by US pricing pressures - the full impact of which has yet to play out, says Mr Witty.
However, sales of new HIV products Triumeq and Tivicay are storming ahead. An IPO of the ViiV Healthcare HIV division still looks likely, and word has it that Citi, Goldman Sachs and Morgan Stanley have been appointed as financial advisers to handle the float. Before that, shareholders will receive £4bn-worth of proceeds from the asset-swap transaction with Swiss group Novartis (NOVN).
Following last year's bribery ordeal in China, GSK is also clamping down on its business practices. It has stopped paying sales representatives bonuses based on the number of prescriptions generated, and will stop paying doctors to speak on the group's behalf in a couple of months' time.
Prior to these results, which were broadly in line with expectations, analysts at Deutsche Bank were forecasting pre-tax profit of £4.5bn in 2015, giving EPS of 97.3p, up from £4.3bn and 93.9p last year.
| GLAXOSMITHKLINE (GSK) | ||||
|---|---|---|---|---|
| ORD PRICE: | 1,464p | MARKET VALUE: | £71bn | |
| TOUCH: | 1,464-1,465p | 12-MONTH HIGH: | 1,706p | LOW: 1,296p |
| DIVIDEND YIELD: | 5.5% | PE RATIO: | 26 | |
| NET ASSET VALUE: | 88p* | NET DEBT: | 291% | |
| Year to 31 Dec | Turnover (£bn) | Pre-tax profit (£bn) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2010 | 28.4 | 3.2 | 32 | 65.0 |
| 2011 | 27.4 | 7.7 | 105 | 70.0 |
| 2012 | 26.4 | 6.6 | 92 | 74.0 |
| 2013 | 26.5 | 6.6 | 113 | 78.0 |
| 2014 | 23.0 | 3.0 | 57 | 80.0 |
| % change | -13 | -55 | -49 | +3 |
Ex-div: 19 Feb Payment: 9 Apr *Includes intangible assets of £12bn, or 248p a share | ||||
