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GSK reports 30% jump in first-quarter profits as demand for its vaccines booms

Revenue edged 6% higher in the quarter to £7.66bn, with almost all of that growth coming from the vaccines business

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GSK kept it full-year guidance in place

Profits at GlaxoSmithKline PLC (LON:GSK) soared by almost a third in the first quarter of 2019 on the back of booming demand for its vaccines, stronger margins and lower taxes.

GSK, which makes dozens of jabs that treat a range of conditions from Shingles to meningitis and hepatitis, posted a 6% rise in revenue to £7.66bn in the three months ended 31 March (Q1 18: £7.22bn).

The vaccines division accounted for almost of that growth as sales soared by 23% to £1.52bn, with Shingles treatment Shingrix raking in £357mln on its own in the quarter.

READ: GSK’s ViiV moves step closer to producing monthly HIV jab

Growth was less furious in the larger pharmaceuticals business, where revenues edged 4% higher to £4.16bn.

Within that, sales of Glaxo’s portfolio of HIV drugs, including Triumeq and Tivicay, rose 7% to £1.12bn. Advair sales dropped another 14% to £486mln following the launch of a cut-price competitor.

Revenues in consumer healthcare, home to brands such as Sensodyne and Panadol, were broadly flat at £1.98bn.

Given the top-line bump, as well as stronger margins and a lower tax rate, post-tax profits jumped by 30% to £985mln in the quarter (Q1 18: £759mln). Earnings per share zipped 50% higher to 16.8p (Q1 18: 11.2p).

Bosses, who still expect a 5-9% fall in adjusted earnings per share this year, proposed a 19p quarterly dividend and remain committed to paying out 80p per share this year.

Strong start, says CEO

“We have made a strong start to 2019, which is an important year of execution for GSK, with growth in sales, operating margins and earnings per share in Q1, in line with our expectations,” said chief executive Emma Walmsley.

“Strengthening our pipeline remains our number one priority and we reported positive data for several potential new medicines in HIV and Oncology during the quarter.

“I am also pleased to report that integration planning for our new proposed Consumer Healthcare business is going well and, subject to relevant approvals, we continue to expect to complete this transaction in the second half of the year.”

GSK shares edged 0.3% higher on the back of results to 1,578.2p.

Quick facts: GlaxoSmithKline PLC

Price: 1659.6 GBX

LSE:GSK
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Market Cap: £83.24 billion
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