GlaxoSmithKline PLC (LSE:GSK) (GlaxoSmithKline PLC (LSE:GSK)) said first-quarter sales had recovered strongly helped by its consumer and biopharma products and a first significant contribution from Covid treatment Xevuday.
Total revenues jumped 32% to £9.8bn in the three months to end-March 2022, with speciality medicines doubling its sales to £3.1bn thanks to a £1.3bn boost from Xevuday though Glaxo indicated profit margins on the new Covid treatment will ease over the course of the year.
A recovery in sales of Shingles jab Shingrix in the US post-Covid boosted vaccine division revenues by 36% to £1.7bn.
Consumer healthcare, the business now called Haleon PLC, also had a good quarter with sales up 14% to £2.6bn on good US demand.
Emma Walmsley, chief executive, said it had been a strong first quarter for the group in what she described as a “landmark year for GSK” with the separation of Haleon.
“Our results reflect further good momentum across specialty medicines and vaccines, including the return to strong sales growth for Shingrix and continuing pipeline progress.
“We also continue to see very good momentum in Consumer Healthcare, demonstrating the strong potential of this business.”
Operating profits rose 65% to £2.8bn, which reflected a weak comparative period a year ago, said Glaxo, with cash flow from operations doubling to £2.76bn.
Guidance for the full year was unchanged even with the strong first quarter at sales growth of between 5%-7% overall and a rise in underlying profits of between 12%-14% at constant exchange rates.
A dividend of 14p for the first quarter was announced with 27p per share payout forecast for the first half.
This comprises 22p per share for new GSK and 5p per share representing Consumer Healthcare while still part of the group, it said.
Glaxo also confirmed its total dividend this year will be cut by 35% following the demerger of Haleon.
The pharma said Haleon will set its own dividend policy, but this is expected to be guided by a 30% to 50% pay-out ratio.
“We expect a second-half dividend from the new Consumer Healthcare company equivalent to a pay-out of around 3p per share, subject to its board's decisions on the intra-year phasing of dividend payments," the company said.
In aggregate, this would represent on the full-year 2022 basis the equivalent of a group dividend of around 52p per share, it said, which compares to 80p for 2021.
Haleon is expected to demerge in the middle of 2022 (July).
For the second half of 2022, 'new GSK' continues to expect to declare a 22p per share dividend, it added.
“As previously communicated, new GSK would expect to declare a dividend of 45p per share for 2023,” said the statement.