GlaxoSmithKline have released Q4 results and unveiled a 1% CER increase in operating profit to £895m driven by a 9% jump in revenue to £9.5bn.
A strong 4th quarter meant GSK recorded £34bn turnover in 2021 which was flat on actual exchange rates but rose 5% on constant exchange rates.
The group benefits from strong pharmaceutical sales providing a welcome boost to revenue but some analysts cautioned on the GSK’s pipeline and sales of key treatments such as Shingrix.
“Despite an encouraging performance in Q3, GSK’s shingles vaccine Shingrix – the key revenue driver and therefore swing factor – suffered at the hands of Omicron and a global focus on prioritising Covid boosters,” said Sebastian Skeet, Senior Analyst for healthcare sector clients at Third Bridge.
“Full year shingrix sales came in at 9% lower YoY although management expects strong double digit growth in the year to come. In addition, pipeline woes continue as Chief Scientific Officer Hal Barron leaves for a biotech start-up. Only time will tell how successful his efforts were to revitalise GSK’s pipeline with some bold bets.”
Glaxo received three major product approvals in 2021 including HIV drug Apretude and COVID-19 treatment Xevudy.
GlaxoSmithKline said profits are expected to rise 12-14% in 2022 which would exclude any contributions from COVID-19 treatments. The company is also gearing up for the sale of the consumer health business following interest from Unilever.
“Things are ticking over nicely at GlaxoSmithKline as the group gears up to separate its Consumer Healthcare business later this year. This arm of the business garnered a lot of attention when Unilever expressed an interest in buying it, but there’s been no word of another potential suitor. The group offered very few details on the future plans for Consumer Healthcare, but a comprehensive outlook and strategy has been promised on 28 February,” said Laura Hoy, Equity Analyst at Hargreaves Lansdown.
GlaxoSmithKline will pay a dividend of 23p for Q4 totalling 80p over the full year.