GSK dividend rises 5 per cent

The group remains reliant on its core respiratory division. This reported 7 per cent sales growth in the US, with new drug Breo delivering £5m since launching in the fourth quarter. Similar improvements were recorded in Japan and Asia Pacific, which grew 9 per cent and 4 per cent respectively. Europe is still GSK's weak spot; respiratory sales in the region were down 3 per cent.

The product pipeline holds the key to growth: GSK currently has seven new respiratory drugs in late-stage development. Even as the group tried to reduce spending last year, it managed to improve its rate of return on R&D investments to 13 per cent - only 1 percentage point shy of its 14 per cent long-term target.

Despite modest success in the respiratory division, total revenues were flat, prompting the group to reiterate its commitment to driving down costs and restructuring the business. Efforts to streamline the cost base are ongoing, with £400m of savings delivered in 2013. As part of its restructuring, GSK is also keen to improve the perception of its practices in China after a disappointing third-quarter performance in the country, hindered by an ongoing bribery probe. Despite the Chinese investigation, investment in emerging markets remains a priority, as demonstrated by the group's decision in December to increase its stake in its Indian subsidiary from 51 per cent to 75 per cent.

Management has guided market expectations towards EPS growth of 4-8 per cent this year, on sales growth of 2 per cent - both at constant currencies. Assuming negative foreign exchange movements will effectively offset this growth, broker Shore Capital expects EPS of 113p this year, flat on 2013.