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Big Pharma is big news for Wednesday as GSK reports results for 2018

The launch of a generic rival to its Advair inhaler has many expecting a downgrade to Glaxo's outlook
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GSK's 2018 results will almost certainly be better than the market anticipated this time last year

Investors may be taking some stress medication on Wednesday as drug giant GlaxoSmithKline reports its final results for 2018.

The launch of a generic rival to its Advair inhaler has many expecting a downgrade to its outlook.

Meanwhile, housebuilders Barratt and Redrow will be reporting their interims amid a very grey looking property market clouded by the shadow of Brexit.

Launch of Advair generic to dent outlook at GSK

UK drugs giant GlaxoSmithKline PLC (LON:GSK) is set to publish a full-year trading update on Wednesday, and 2018’s results will almost be certainly better than the market had anticipated this time last year.

That’s because of the delay in the launch of a generic rival to GSK’s blockbuster Advair asthma inhaler, although Dutch pharma giant recently had its copycat version approved by the FDA.

That will no doubt eat into 2019’s earnings and it will be interesting to see if GSK has figured out what the exact impact will be on this year’s numbers.

Other drugs are also starting to face competition from cut-price rivals, but sales of some of the FTSE 100’s newer drugs, particularly the Shingrix shingles vaccine, should offset this somewhat.

GSK’s net profit column is likely to get a boost from the recent US$3.8bn sale of its consumer nutrition business to Unilever plc (LON:ULVR).

Any additional details on GSK’s planned break-up after it merged its consumer health assets with those of Pfizer last month will also be eyed.

Housebuilders bring results to the table amid patchy market outlook

Housebuilder Barratt Developments PLC (LON:BDEV) will be looking to make good on its strong start to the fiscal year when it reports its interims on Wednesday.

In an October trading statement, the firm said forward sales, including joint ventures, came to 12,903 units at a value of £3.14bn on October 14, compared to 12,277 units at a value of £2.8bn a year ago.

Barratt was also given a lift by a bullish sector note from Berenberg in January after the sector rose 14% at the start of the year after losing a quarter of its value in 2018.

Sophie Lund-Yates, equity analyst at Hargreaves Lansdown, said that Barratt had “started well” in 2019, adding that “government schemes like help-to-buy and easier mortgage access means Barratt’s been able to boost revenues in recent years”.

However, she added that the horizon was “not totally clear” after the government announced the end of Help to Buy in 2023 as well as a slowdown in the property market in London and the South East.

“With the sands shifting somewhat, investors will want to see Barratt’s taking steps to protect profitability if foundations start to creak.”

Redrow plc (LON:RDW) will be joining Barratt in reporting its half-year results on Wednesday, although it may face a more difficult crowd given the impending retirement of its chief executive and founder Steve Morgan in March as well as an update in November that revealed net private reservations had barely budged in the 18 weeks to 3 November at £588mln from £586mln the year before.

However, there may be room to manoeuvre with Redrow’s average selling price rising 4.6% in the 18 week period to £388,000 in addition to a strong £132mln cash position.

Significant announcements expected:

Wednesday February 6:

Finals: GlaxoSmithKline PLC (Q4) (LON:GSK)

Interims: Barratt Developments PLC (LON:BDEV), Redrow plc (LON:RDW), Frontier Developments PLC (LON:FDEV)

Trading updates: Severn Trent PLC (LON:SVT), DP Poland Plc (LON:DPP), CYBG PLC (LON:CYBG), Electrocomponents PLC (LON:ECM), Victrex PLC (AGM) (LON:VCT)

Economic data: US JOLT job openings


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