LONDON (Alliance News) - GlaxoSmithKline PLC on Wednesday said its profit increased significantly in 2018 as a result of reduced research and development costs as well as a strong performance from its shingles vaccine.
In the year ended December 31, the pharma major posted a pretax profit of GBP4.80 billion, from GBP3.53 billion in 2017. Company-compiled consensus for 2018 profit was GBP7.90 billion.
Revenue was GBP30.82 billion, rising from GBP30.19 billion in 2017 and exceeding the GBP30.56 billion consensus.
Within this, revenue from Glaxo's Vaccines segment was particularly strong and reached GBP5.89 billion, up 14% from GBP5.16 billion in 2017 due to strong sales of its Shingrix shingles vaccine as well as its hepatitis vaccine.
Research & development costs came to GBP3.89 billion, reduced significantly from GBP4.48 billion a year ago. However, this did exceed analyst consensus for research & development costs of GBP3.77 billion.
Selling, general & administration expenses totalled GBP9.92 billion, compared to GBP9.67 billion in 2017 and a consensus estimate of GBP9.46 billion.
Glaxo will pay a final dividend per share of 23p, bringing the total annual dividend to 80p, flat on 2017. Looking ahead, the pharmaceutical firm intends to maintain its dividend at 80p in 2019.
Also in 2019, Glaxo is expecting its adjusted earnings per share to drop by between 5% and 9% at constant exchange rates due to the launch of a generic competitor to its drug Advair, which treats asthma and chronic obstructive pulmonary disease.
This drop in adjusted earnings per share will reflect the firm's recent acquisition of US pharma firm Tesaro Inc, the disposal of its Consumer Healthcare nutrition business to Unilever PLC, and its upcoming consumer joint venture with Pfizer Corp.
"GSK delivered improved operating performance in 2018 with group sales growth, strong commercial execution of new product launches, especially Shingrix, continued cost discipline and better cash generation," said Chief Executive Emma Walmsley.
"We are also focused on completing the transactions to divest our Consumer Healthcare nutrition business to Unilever; and the formation of our new joint venture with Pfizer that will create a new, world leading Consumer Healthcare company and which provides a unique opportunity to deliver substantial value for shareholders," Walmsley added.
Shares in Glaxo were up 0.3%at 1,526.60 pence on Wednesday following the announcement.
Glaxosmithkline (GSK)