Wednesday, 24 July 2013
GlaxoSmithKline - Q2 & Half Year Results
Its three primary areas of business are pharma, vaccines and consumer healthcare. Major brands include Aquafresh toothpaste, Horlicks, Lucozade, Nicorette/NiQuitin CQ, Polygrip, Ribena and Sensodyne toothpaste.
The share price has seen a good run over the past 6 months rising just over 25% from 1335p to 1675p. In addition there have been two quarterly dividends totalling 40p…and they say elephants don’t gallop.
However, in the past week the run has been stalled following an admission of corrupt practice by some of its executives in China. CEO, Andrew Witty said he had no personal knowledge of the allegations - "Clearly, we are likely to see some impact to our performance in China as a result of the current investigation, but it is too early to quantify the extent of this,” he told reporters on Wednesday, according to Reuters. China is obviously an important market and this quarter sales there increased 14% to £212m
They have today issued Q2 & half year results to 30th June. Over the 6m period, turnover is flat at £13bn. Core profits were down 5% at £3.8bn and core eps fairly flat at 53.2p.
The company have previously announced plans to divest the nutritional drinks brands, Lucozade and Ribena, and say they remain on track and expect to reach an agreement by the end of the year.
They are committed to using free cash flow to support increasing dividends, share repurchases or, where returns are more attractive, bolt-on acquisitions.
GSK continue to target share repurchases of £1 - 2 billion in 2013.
Hopefully the problems in China can be resolved fairly quickly.