These full-year results for Shire Pharmaceuticals (SPH) were the last for departing chief executive Angus Russell as he hands over in April to Mr Flemming Ørnskov, formerly of German company Bayer. He leaves the company in reasonable shape after a year where regulatory fines and generic competition to key products affected sentiment, but there is still a sense that the decisions that Mr Ørnskov makes early in his tenure will have major strategic implications for Shire. In the meantime, management will hope that a series of complicated legal disputes have reached a satisfactory conclusion so that more time can be spent on developing its products.
The earlier-than-expected onset of generic competition to attention-deficit disorder drug Adderall XR caused a 19 per cent drop in the product's revenues to $429m (£277m). This could have affected overall revenues growth - up by an underlying 12 per cent - but was offset somewhat by a one-off payment from GlaxoSmithKline (GSK) and ViiV Healthcare of $38m to settle a dispute over royalties. Operating income fell by 14 per cent to $949m, affected by a non-cash charge of $198m to impair the intangible assets for gastric medicine Resolor as the product has been hit by austerity measures in the EU. In addition, the $58m fine Shire must pay to the US government to settle a civil dispute had an impact in the fourth quarter. Research & development spending increased by 25 per cent, when impairments are included, to $195m.
Subject to review post results, Citi expects current-year adjusted pre-tax profits to rise a fifth to $1.4bn, giving EPS of 205¢.
SHIRE PHARMACEUTICALS (SHP) | ||||
|---|---|---|---|---|
| ORD PRICE: | 2,070p | MARKET VALUE: | £11.5bn | |
| TOUCH: | 2,069-2,070p | 12-MONTH HIGH: | 2,316p | LOW: 1,682p |
| DIVIDEND YIELD: | 0.5% | PE RATIO: | 24 | |
| NET ASSET VALUE: | 683¢* | NET CASH: | $373m | |
| Year to 31 Dec | Turnover ($bn) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2008 | 3.02 | 266 | 32.0 | 9.9 |
| 2009 | 3.01 | 643 | 93.0 | 11.4 |
| 2010 | 3.12 | 769 | 108 | 13.1 |
| 2011 | 4.26 | 1,090 | 157 | 15.1 |
| 2012 | 4.68 | 911 | 134 | 17.3 |
| % change | +10 | -16 | -15 | +15 |
Ex-div: 6 Mar Payment: 9 Apr *Includes intangible assets of $3.03bn, or 544¢ a share £1=$1.55 | ||||
