Glaxo promises a sweeter 2013 as sales go flat

Julian Harris
Follow Julian
PHARMA giant GlaxoSmithKline (GSK) said yesterday that it expects revenue and profit to bounce back this year, despite a weak European market dragging sales down one per cent during 2012.

Chief executive Andrew Witty also revealed that the firm is weighing up the future of its famous Lucozade and Ribena brands, refusing to rule out the possibility of divesting both.

Witty said that he has a completely open mind over the future of the drinks, as GSK launches a review that will report by the middle of the year.

The company could look for partners to help grow the brands in its key emerging markets, or invest more cash – or sell them off. “Nothing is ruled out,” Witty stressed.

Lucozade and Ribena attract high sales in countries such as Nigeria and New Zealand – as well as in the UK – yet have been less successful in places such as India and China.

It said the drinks do not “naturally fit” with the firm’s operations as well as other products such as Horlicks.

Witty is upbeat over GSK’s future in drug sales, pointing to six new products filed since the start of 2012, and arguing that the pipeline is packed with promising new developments.

Core pre-tax profits were down four per cent at £7.6bn in 2012, on a seven per cent slump in European sales as a result of states forcing down prices. “Governments [in Europe] are sending a very clear signal,” Witty said, adding that GSK will turn its attention to other parts of the world. “All the growth is elsewhere,” he said.

Nonetheless, GSK expects core earnings per share growth of three to four per cent for 2013, predicting that sales will be one per cent higher.