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.

The FTSE 100 flirted with gains on Tuesday as commodity shares rallied on strong iron ore prices and a respectable set of results from BP.

Miners dominated the FTSE 100 top risers on Tuesday with Glencore, Antofagasta, Rio Tinto and Anglo American rising between 2%-3.5% in early trade.

News China are going to push back green targets on steel production helped Iron Ore break through $150/t and provided a boost to the outlook of mining profits.

BP reported its highest profit on more than a decade and announced a $4bn share buyback programme which saw its shares rise over 1%. However, analysts pointed to the possibility of taxes on oil firms to help tackle the cost of living crisis as reason to be cautious around major energy companies.

“BP followed Shell by reporting bumper profits but both companies probably wished the timing didn’t coincide with the rise in the UK energy price cap which piles pressure on households already facing a cost of living crisis,” says Russ Mould, investment director at AJ Bell.

“The UK Government has ruled out a windfall tax for the oil and gas sector for now, but the threat of a legislative intervention hangs in the air given the contrast between voters struggling to heat their homes and two of Britain’s biggest companies announcing such strong results and billions in giveaways to shareholders.”

Ocado

Ocado shares sank 10% after pre-tax profits accelerated on higher development costs despite a 7.2% increase inn full year. revenue to £2.5bn.

“As household incomes are stretched thinner than they have been in a very long time, more premium options like M&S and Ocado food may find themselves rubbed off shopping lists. Ocado’s core retail operation was a natural beneficiary of lockdowns, as the world shifted to online shopping. A reasonable portion of that increased demand should be permanent. However, Ocado is also battling against very strong comparatives from the pandemic, and growth looks lacklustre. It’s positive it can stoke more impressive levels of growth, but this may well prove more challenging in an inflationary environment,” said Sophie Lund-Yates, equity analyst at Hargreaves Lansdown.

“The real driver of subdued market sentiment comes from commentary around Ocado’s Solutions business. Enormous amounts are being funnelled into building out the Ocado Smart Platform and Customer Fulfilment Centres.”

BP shares rose on Tuesday after the oil and gas major announced a significant increase in profits driven by higher oil and energy prices.

Underlying RC profit for the 2021 year was $12.8bn compared to a $5.7bn loss in 2020.

BP shares rose 1.3% to 414p on news the sharp increase in profit is being returned to to shareholders in the form of dividends and sharebuybacks.

BP’s ordinary dividend for the fourth quarter will increase to 5.46 cent per share, up from 5.25 cents in the same period last year.

“2021 shows bp doing what we said we would – performing while transforming. We’ve strengthened the balance sheet and grown returns. We’re delivering distributions to shareholders with $4.15 billion of buybacks announced and the dividend increased,” said Bernard Looney, Chief executive officer.

BP benefited from higher energy prices and recorded average oil prices of $63.60 in 2021, rising from $36.63 in 2020.

“A week after Shell reported surging profits driven by their gas portfolio, BP has announced earnings that have also been bloated by the high oil and gas price environment. The company announced RC profit for the quarter of $4.1 billion beating consensus expectations of $3.9 billion, and a full year result of $12.8 billion. BP will look to increase its dividend, buy back shares, and continue investing in their energy transition strategy,” said Allegra Dawes, senior analyst at Third Bridge.

BP also took the opportunity to update the market on their clean energy activities that include offshore wind in New York and the establishment of a network of EV charging points.

“While oil majors have maintained that their traditional hydrocarbon businesses are essential for funding and enabling the energy transition, they are coming under increased pressure to decarbonize and invest in green energies,” said Dawes.

“BP has embarked on an aggressive strategy, with oil and gas production expected to be reduced by one million barrels of oil equivalent a day by 2030. They are also planning to develop a portfolio of 50GW by 2030 in renewable energy while becoming a leader in solar over the same period.”

Cadence Minerals have completed the first tranche of their investment in the Amapa Iron ore projects and secured a 20% interest in the asset.

Following a landmark restructuring agreement in December, Cadence Minerals have now completed all regulatory and contractual requirement and have confirmed they now own 20% of the joint venture that has a 100% interest in the Amapa Iron Ore Project.

Having conducted a heavily oversubscribed placing to raise £4.1m, Cadence Minerals are now focusing on the second phase of the investment and securing an additional 7% stake in the project for a consideration of $3.5m.

Indo Sino, Cadence Mineral’s joint venture partner, will have a twelve-month option to buy the shares in the JV held by Cadence for 1.5x the price paid by Cadence for the shares, if Cadence does not complete the investment.

“I am pleased to report that we have formally completed phase one of our investment into Amapa to acquire our initial 20 percent. Furthermore, our board are delighted that the recent fundraise to fund the second investment phase was oversubscribed. It is clear that our vision for Amapa is shared by new and existing shareholders alike given the high level of interest and participation in the fundraising,” said Cadence Minerals CEO, Kiran Morzaria.

“I look forward to reporting back to you on progress in the coming weeks.”