The latest results from drugs giant GlaxoSmithKline (GSK) look like a pretty good effort. Demand for the group's new drugs pushed total sales up 6 per cent at constant exchange rates, and a £7.7bn divestment boost from the 2014 Novartis deal left operating profits up 187 per cent at £10.3bn. Chief executive Andrew Witty said new products generated £2bn worth of sales last year, so the company could hit its £6bn target for new drug sales by 2018 - two years early. However, stripping out any one-off sales boosts, operating profits fell 13 per cent to £5.7bn, leaving underlying EPS down just over a fifth at 75.7p.
Mr Witty reckons it would be "unwise" to break up GSK. This is something some shareholders have been lobbying for, specifically spinning off either the consumer healthcare or HIV Viiv divisions. The thing is, both those businesses are bringing in plenty of money: Viiv grew sales by more than half last year, while the consumer business reported a 44 per cent increase in sales at constant currency.
Prior to these results analysts at JPMorgan Cazenove expected EPS of 82.6p for the 2016 financial year.
| GLAXOSMITHKLINE (GSK) | ||||
|---|---|---|---|---|
| ORD PRICE: | 1,417p | MARKET VALUE: | £69.0bn | |
| TOUCH: | 1,416-1,417p | 12-MONTH HIGH: | 1,645p | LOW: 1,228p |
| DIVIDEND YIELD: | 5.6%* | PE RATIO: | 8 | |
| NET ASSET VALUE: | 105p* | NET DEBT: | 122% | |
| Year to 31 Dec | Turnover (£bn) | Pre-tax profit (£bn) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2011 | 27.40 | 7.7 | 105 | 70.0 |
| 2012 | 26.40 | 6.6 | 92 | 74.0 |
| 2013 | 26.50 | 6.6 | 113 | 78.0 |
| 2014 | 23.01 | 3.0 | 57 | 80.0 |
| 2015 | 23.92 | 10.5 | 174 | 80.0 |
| % change | +4 | +255 | +204 | - |
Ex-div: 18 Feb Payment: 14 Apr *Does not include 20p special dividend in relation to FY2015 **Includes intangible assets of £21.8m or 448p a share | ||||
