GSK expects “mid to high single-digit growth” to 2020
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GSK expects “mid to high single-digit growth” to 2020

Emma Walmsley, CEO of pharmaceutical giant GlaxoSmithKline (GSK), is “increasingly confident” that new products will help the business deliver “mid to high single-digit growth” in the years to 2020. The announcement comes as she reaffirms the company’s dedication to paying shareholder dividends and sees the release of GSK’s first full year results with Ms. Walmsley at the helm.

On Wednesday, the company reported full year revenues of £30.2 billion – and 8% increase from the previous year, and a slight beat against the Street’s forecast. Adjusted earnings per share came in at 111.8p, in line with estimates and an 11% increase from 2016 – or 4%, when currency effects are stripped out.

The company has been beset by rumours that shareholder dividends will be sacrificed in order to pursue large scale M&A activity. Ms. Walmsley was keen to put those rumours to bed, saying that GSK had been “very clear in its framework of prioritization.” First came pharma, and the buying out of Novartis in the two companies’ consumer health joint venture. Next is “return to shareholders”.

She did concede that, once she had fulfilled this obligation to GSK’s shareholders, some M&A activity could be on the way, but added that it would be pursued “with very strict criteria and discipline around returns there.” This could refer to the consumer healthcare division of either Pfizer or Merck – both of which she has previously named as possible acquisition targets.

Speaking about potential mergers and acquisitions, Walmsley said: “You would expect us to take a serious look at any leading and very appealing assets in the sector because we are a world leader in consumer healthcare and have a very good track record of integrating businesses successfully.”


Dominion holds GlaxoSmithKline in its Global Trends Managed Fund.

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