News that drugs giant GlaxoSmithKline (GSK) will not sell its stake in HIV business Viiv Healthcare has, ultimately, changed the perception of the company going forward. The board said the decision reflected "an updated strong positive outlook" for the company, confirming suspicions that last year's musings were simply a last ditch attempt to drum up shareholder sentiment in reaction to a struggling share price.
As well as holding onto Viiv, chief executive Andrew Witty said £4bn in net proceeds due to be returned to investors from last year's $20bn asset-swap with Swiss rival Novartis (NOV) would be cut to just £1bn. Over the next three years, Mr Witty said investors would receive a dividend worth 80p a year - the same amount paid to shareholders for 2014 - and will hand back £1bn as a one-off cash windfall along with the 2015 full-year dividend. This will allow GSK to maintain its yield of more than 5 per cent - an important motivation for investors seeking income-stable stocks.