[Corrected - sales figures amended]
Shares in GlaxoSmithKline took a hit in afternoon trade on Tuesday after the pharmaceuticals giant reported fourth quarter sales that missed forecasts. Nevertheless, the firm upped its total dividend and identified further share buy-backs in the coming year.
Glaxo has announced an ordinary fourth quarter dividend of 21p, resulting in a full-year ordinary dividend of 70p, up 8% over last year. In 2011, the company completed £2.2bn of share repurchases and currently expects to buy back £1-2bn of shares in 2012.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
"Alongside both of these, we have also elected to return the net proceeds from the sale of our non-core North American OTC brands to shareholders through payment of a supplemental dividend of 5p. This will be paid with the fourth quarter ordinary dividend," announced Chief Executive Officer Andrew Witty.
Turnover for the three months ended December 31st 2011 fell 2% at constant exchange rates (CER) to £6,978m, short of the £7,380bn figure forecasted by a Dow Jones Newswires poll.
The group's shares were down 2.08% at 1,390p in London an hour after the results were released.
Full-year turnover fell 3% to $27,387m, however, on an underlying basis, group sales rose 4% reflecting portfolio breadth and mix, Glaxo said. The group saw particularly strong sales growth in the Emerging Markets (+15%), Japan (+28%) and Asia Pacific (+10%), however, this was partly offset by the USA (flat) and Europe (-4%).
Pharmaceuticals and Vaccines full-year reported sales fell 4% to £22,192m, as sales of pandemic-related products Avandia and Valtrex plummeted from £2,285m to £507m. Meanwhile Consumer Healthcare sales rose 5% to £5,195m.
With three new products being approved last year, the sales of new products jumped 47% to £2.5bn.
Full-year operating profits after restructuring rose from £3,783m to £7,807m, with the group realising £590m in restructuring charges. Excluding these, operating profits totalled £8,397m up 65% in CER terms over 2010.
The restructuring programme delivered £2.2bn of annual savings in 2011, and the firm assured that it is on track to deliver the full annual savings target of £2.5bn by 2012. With the addition of further savings that were identified, the programme is now expected to deliver £2.8bn of annual savings by 2014.
"Three and a half years ago, we set out to fundamentally change GSK to create a more balanced business capable of addressing the market challenges we face, delivering sustainable financial performance and providing new value to patients and consumers. Our record in 2011 demonstrates that we are succeeding," according to Witty.
"As we go into 2012, we are mindful of the potential pressures we face given the current global political and economic environment. However we continue to expect to drive further shareholder returns as we seek to grow sales across our broadly based business and improve operational leverage and financial efficiency to deliver strong cash generation," Witty added.
BC
