GlaxoSmithKline revenue rises four per cent in 2015, forecasting further growth in 2016

 
Billy Bambrough
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BRITAIN-PHARMACEUTICAL-GSK
GlaxoSmithKline has managed to beat expectations in beating estimates in two of the last four quarters (Source: Getty)

Drug giant GlaxoSmithKline (GSK) has reported earnings for 2015 up four per cent on last year at £23.9bn, with a profit of £10.5bn.

In the fourth quarter revenue rose by two per cent to £6.2bn, from £6.1bn in the same period a year earlier.

Fourth quarter results came in broadly inline with expectations, mostly down to growing demand for new drugs. However, core earnings per share fell 34 per cent to 18.1p, less than forecasts of 17.9p.

The last few quarters have come in as expected, with investors hoping for an end to GSKs record for unpleasant surprises.

The firm made a loss before tax of £416m in the last three months.

Analysts on average had forecast sales of £6.25bn and adjusted core earnings per share of 17.9p.

Shares rose on the news, jumping half a per cent to 1,432p.

Andrew Witty, chief executive at GSK said: “In 2015, we made substantial progress to accelerate new product sales growth, integrate new businesses in Vaccines and Consumer Healthcare and restructure our Global Pharmaceuticals business. This progress means the Group is well positioned to return to core earnings growth in 2016."

The firms pharmaceuticals business saw sales fall seven per cent, while vaccines were up 19 per cent and Consumer Healthcare up 44 per cent, reflecting the impact of the Novartis transaction.

The company announced a fourth interim dividend of 23p per share, on hold from the fourth quarter of 2014. GSK will however pay a special dividend of 20 pence per share.

Ketan Patel, associate fund manager at EdenTree Investment Management said: “Although the share price has held up very well during one of the most volatile starts to a year, some prominent investors have called for a break-up of the £69bn pharmaceutical giant which is facing strong headwinds on several fronts.

“If the board decide to cut the dividend post 2017, it would be a watershed moment, as no large cap pharmaceutical company has cut its dividend, excluding M&A deals, since the turn of the century.”

In its third quarter earnings release, the company reported strong sales and an optimistic outlook.

GSK is coming under increasing pressure from the “patent cliff” where big pharma companies are losing patents for some of their biggest money making drugs.

This allows other companies to make cheaper alternatives.

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