GlaxoSmithKline plc, (GSK) has suffered a setback during the fourth quarter ended December 2015 and it incurred a net loss of £428 million as against a net profit of £1,025 million in the corresponding period of last year. Its turnover increased only by 1.6 per cent to £6,286 million from £6,186 million due to higher new product sales. EPS worked out to negative 7.3 pence as against 21.3 pence in the last period. Its research and development expenditure increased by 7.7 per cent to £1,054 million from £979 million.
The Novartis transaction completed on March 2, 2015 and so GSK's reported year to date results include ten month's turnover of the former Novartis vaccines and consumer healthcare products and exclude sales of the former GSK oncology business from March 2, The Group has restated its segment information.
Sir Andrew Witty, CEO, said, “In 2015, we made substantial progress to accelerate new product sales growth, integrate new businesses in vaccines and consumer healthcare and restructure our Global Pharmaceuticals business. This progress means the Group is well positioned to return to core earnings growth in 2016.”
“For 2016, we continue to expect core EPS percentage growth to reach double-digits on a constant currency basis, although we are also mindful that the macro-economic and healthcare environment will continue to be challenging. As a result, we remain focused on improving commercial execution and realising the benefits of our integration and restructuring program.” Witty added.
For the year ended December 2015, GSK's turnover increased by 4 per cent to £23,923 million ($34,625 million) from £23,006 million in the previous year. Its gross profit, however, declined by 3.9 per cent to £15,070 million as against £15,683 million. Its R&D expenditure for the full year increased by 3.2 per cent to £3,560 from £3,450 million and selling, general and administration expenditure increased by 12 per cent to £9,232 million from £8,246 million. Its other operating income increased sharply to £7,715 million as against expenditure of £700 million.
Due to hefty growth in other income, its net profit reached at £8,372 million from £2,831 million in the previous year. EPS worked out to Pence 174.3 as compared to Pence 57.3 in the last year. The company has a strong portfolio of innovative products across its three business viz., pharmaceuticals, vaccines and consumer healthcare. Revenues are split across pharmaceuticals 58 per cent, consumer healthcare 26 per cent and vaccines 16 per cent.
The sales of global pharmaceuticals declined by 14 per cent to £11,844 million reflecting the impact of the disposal of the oncology business to Novartis. The sales of HIV products went up sharply by 54 per cent to £2,322 million. The sales of new pharmaceutical products were £1,713 million. However, the sales of seretide/advair declined by 30 per cent to £3.7 billion. It US pharmaceutical sales declined by 20 per cent to £4,233 million. Advair sales were down 13 per cent £1,865 million and Flovent sales down 19 per cent to £379 million. Its European pharma sales declined by 16 per cent to £2,849 million due to disposal of oncology products.
The sales of vaccines increased by 19 per cent to £3,657 million and that of consumer healthcare moved up by 44 per cent to £6,028 million. Its sales in US increased by 3 per cent to £8,222 million, and that in Europe 11 per cent to £6,450 million and international by 5 per cent to £9,251 million during 2015.