Pharmaceutical giant GlaxoSmithKline (GSK) delivered strong first quarter growth with revenues up 32% to £9.7 billion and adjusted earnings per share up 43% to 32.8p in constant currencies.

The company reaffirmed 2022 guidance for new GSK sales growth of between 5% and 7% and adjusted operating profit growth between 12% and 14% excluding Covid-19 contributions.

In mid-May the company will change its name from GlaxoSmithKline to GSK, ahead of the demerger of the Haleon consumer healthcare division in July.

The shares rallied 1% to £17.73 and have gained 22% over the last six months.

GROWTH ACROSS THE BOARD

The biopharma division excluding Covid-19 solutions registered 15% sales growth to £7.1 billion. GSK and Vir Biotechnology’s Covid-19 antibody drug Xevudy contributed revenues of £1.3 billion.

Vaccines saw a strong recovery, with sales up 36% led by the company’s Shingles drug Shringrix which doubled revenues to £698 million on increased US demand.

The consumer healthcare division grew revenues by 14% to £2.6 billion. Medium-term the business is expected to grow sales by between 4% and 6% and deliver a moderate expansion of its operating margin.

General medicines saw the lowest growth, with sales up 3% in constant currencies to £2.6 billion.

GSK generated strong free cash flow of £1.65 billion.

2022 GUIDANCE

GSK provided a breakdown of 2022 guidance assuming global economies and healthcare systems normalize over the rest of the year.

Specialty medicines, which comprise the Cancer, Respiratory Immuno-inflammation and HIV franchises, are expected to grow revenues by 10% in 2022.

General medicines are expected to show a slight decrease due to increased genericization of respiratory medicines. Vaccines are expected to grow revenues at a low teens percentage.

The company said it expected to deliver strong double-digit sales growth and ‘record annual sales’ of its Shringrix vaccine in 2022 based on demand in existing markets and continued geographic expansion.

DIVIDENDS

GSK declared an interim dividend of 14p per share and expects to declare a 27p per share dividend for the first half. This is comprised of 22p per share for new GSK and 5p per share for Haleon.

For the second half new GSK expects to declare a 22p per share dividend while Haleon would be expected to declare a 3p per share payout.

In aggregate this would represent a 2022 dividend of around 52p per share. New GSK is expected to declare a dividend of 45p per share in 2023.

Going forward, Haleon has indicated it will pay-out between 30% and 50% of underlying earnings in dividends.

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Issue Date: 27 Apr 2022