Europe woes limit growth at Glaxo

Drugs giant GlaxoSmithKline saw a modest increase in group revenue in the first quarter of 2012 as growth in the US, Emerging Markets/Asia Pacific (EMAP) and Japan offset declines in Europe.

Total turnover amounted to £6,640m, up 2% at constant exchange rates (CER) or 1% on a reported basis.

Pharmaceuticals revenue rose 2% but was affect by continue pressure from austerity measures in Europe as well as slower growth in EMAP - this was driven particularly by "continued disruption in the Middle East, but also some broader sensitivity to a more challenging economic environment in a number of EMAP markets" the group said.

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Vaccines turnover increased by 1% due to similar pressures as well as phasing of tenders and a demanding comparator. Meanwhile, Consumer Healthcare revenue rose 1% as growth was held back by the non-core over-the-counter (OTC) brands that the company is in the process of divesting.

The group achieved 6% CER growth in turnover in the US, its biggest market which accounts for £2,151m of sales. Its second-largest geography is Europe, where turnover declined by 5% (CER).

Total operating profit was flat at £2,037m, up 2% at CER. Pre-tax profit slumped to £1,879m, from £2,464m the year before after the prior-year figure was helped by profits on disposals.

The firm has confirmed a 6% increase in the first-quarter dividend to 17p and announced that total share buy-backs this year will be in the range of £2-2.5bn.

Shares were trading 1.85% lower at 1,430.5p at 12:15, just 15 minutes after the results were released.

BC