- Double-digit second quarter revenue growth
- Increased full year guidance
- Long term growth targets reiterated
Pharmaceutical firm GSK (GSK) delivered a better than expected second quarter trading update and increased its guidance for full year revenue and profit growth.
Investors broadly welcomed the upgrade with the shares gaining 0.4% to £17.62.
Today’s results for the company, formerly known as GlaxoSmithKline or Glaxo, were the first glimpse of the standalone pharmaceutical business after the recent (18 July) demerger of its consumer healthcare division Haleon (HLN).
SPECIALTY MEDICINES SHINE
For the quarter ended 30 June, revenues increased 19% to £6.9 billion and adjusted operating profit jumped 22% to £2 billion.
The weakness of sterling provided a significant tailwind, such that revenue and profit growth in constant currencies was reduced to 13% and 7% respectively.
Growth was driven by a strong performance across the group's specialty medicines franchises with divisional revenues up 44% year-on-year to £2.7 billion.
Vaccine revenues increased by 9% to £1.7 billion, with the shingles vaccine Shingrix the standout performer producing a record quarter, while general medicines saw revenues grow 5% to £2.5 billion impacted by generic competition.
INCREASED GUIDANCE
Reflecting its stronger than expected performance in the first half, the company now anticipates revenue growth of between 6% and 8% and adjusted operating profit growth of between 13% and 15% for the year ending 31 December 2022, a percentage point higher than prior guidance.
Adjusted earnings per share are expected to grow around 1% behind the increase in operating profit.
Within the three divisions, vaccines, led by Shingrix, is expected to deliver sales growth in the low-to-mid teens, specialty medicines around 10% and general medicines are expected to register a decline reflecting continued generic pressures.
The company said most of the expected Covid-19 related sales for 2022 were realised in the first half and it expects ‘substantially lower’ sales related to the virus in the second half.
There was no change to the full year dividend guidance of 61.25p per share, which is equivalent to 49p per share before the share consolidation related to the Haleon demerger.
Overall, GSK said it was confident in delivering on its five-year targets of 5% compound annual growth in sales and 10% growth in profit.
Key to achieving the targets will be delivering growth from its pipeline of new drugs and making operational improvements.
Chief executive Emma Walmsley said, ‘We continue to strengthen our pipeline, notably with very positive high-level results from our late-stage RSV vaccine candidate, together with targeted business development acquisitions of Sierra Oncology and Affinivax.
