GSK plc (LON:GSK)’s revenue in the second quarter rose 13% to £6.9bn, reflecting growth across all segments but particular strength in Specialty Medicines.
Excluding a one-off, non-cash £699m charge related to Pfizer Inc. (NYSE:PFE) investments and ViiV Healthcare, operating profits were up 22% to £2.0bn. Higher royalty income and sales growth more than offset the impact from a higher proportion of lower-margin Xevudy (Covid-19 solutions) sales, higher freight costs and commodity prices and increased investment in new product launches.
Excluding the impact of covid sales, the group now expects 2022 sales growth of 6-8%, up from 5-7%. Underlying operating profit is expected to grow between 13-15%, up from 12-14%.
A 16.25p dividend was announced, bringing the total for the half to 27.5p.
Shares were broadly flat following the announcement.
Laura Hoy, Equity Analyst at Hargreaves Lansdown:
“GSK’s first set of results without its consumer healthcare arm Haleon PLC (LON:HLN) under the umbrella were promising. The group’s captialising on a return to more normal buying patterns following the pandemic as lower priority vaccines for conditions like Shingles are back in demand and the antibiotics market recovers. GSK’s also making good on promises to grow Specialty Medicines through a portfolio of new HIV drugs, which contributed over a third to the division’s revenue growth in the second quarter.
All of this supported improved guidance for the full year, suggesting the leaner organization is more nimble than expected.
The rosy results received tepid reaction from markets as worries about a looming prolonged downturn continued to weigh. While GSK is in many ways insulated from the impact of a recession—healthcare falls firmly into the essentials bucket—the group’s not immune. Drug pricing remains a hot topic for debate in the group’s largest market, the US. As lawmakers look for ways to ease the cost of living crisis, they could put big pharma back in the hot-seat.”
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