GlaxoSmithKline profits miss as China challenges weigh
Britain's biggest drugmaker GlaxoSmithKline (GSK) has reported growth in profit before tax of four per cent, reaching £6.6bn for the year ended 31 December 2013.
GSK saw earnings per share reach 31.1p; above analyst estimates of 30.8p. The company's full year revenue rose one per cent to £26.5bn.
GSK announced that it expected around 30 brand innovations/extensions in consumer healthcare over the course of 2014.
Chief executive officer, Sir Andrew Witty, commented:
GSK's trading performance in 2013 was in line with our guidance, despite some unexpected challenges and reflected the improving balance of our sales base. I was encouraged by the improved performance of our US business.
We also saw stabilisation of our European business (flat sales) with the benefits of our restructuring programme helping to offset the ongoing economic and pricing pressures in the region.
The company enjoyed a rise in emerging markets of five per cent for the year and 11 per cent for the fourth quarter. However, this excludes the impact of the ongoing bribery investigation by the Chinese authorities.
In China, pharmaceuticals and vaccines sales were down 18 per cent with Hepatitis and Respiratory products particularly affected.
GSK is hoping to put the scandal behind it but that may be easier said than done. "Investors will continue to express their hesitancy until litigation cases are brought forward and GSK officially moves past the incident and restores reputational damage," said market strategist at ETX Capital Ishaq Siddiqi.
GSK also announced cost savings of around £400m with a similar amount expected in 2014. That should aid the process of debt reduction.
2014 is set to be a positive year for the drugs company with a host of new product launches and the benefits of its restructuring programme coming through.