GSK sticks to guidance after crisis hits profit and revenue

GlaxoSmithKline stuck to its annual guidance after the Covid-19 crisis caused profit and revenue to fall in the first quarter of 2021.

Adjusted operating profit fell 30% in the three months to the end of March to £1.88bn from a year earlier as turnover dropped 18% to £7.41bn. Excluding currency movements, profit fell 23% and turnover declined 15%.

GSK declared a first-quarter dividend of 19p a share, unchanged from a year earlier, and said it was confident it would meet its target for an annual payout of 80p a share. The FTSE 100 company reiterated guidance for adjusted earnings per share to fall by a mid-to-high single-digit percent at constant currency.

The Covid-19 crisis increased demand for GSK's painkillers sold over the counter but had a negative effect on other parts of its business as patients made fewer trips to the doctor and health services have focused on the pandemic.

Pharmaceuticals revenue fell 12% to £3.9bn in the first quarter and vaccines revenue dropped 32% to £1.2bn as governments prioritised Covid-19 jabs. Consumer healthcare revenue fell 19% to £2.3bn, reflecting stockpiling early in the pandemic and a weak season for colds and flu caused by social distancing.

Glaxo announced in February 202 that it was planning to split into two businesses: biopharma and consumer healthcare. But some investors have become unhappy about the leadership of Chief Executive Emma Walmsley, prompting Elliott Management, an activist investor, to take a large stake in the group.

Walmsley said: "Our first quarter results are in line with our expectations and reflect the anticipated impacts of Covid-19. We continue to expect a significant improvement in performance over the remainder of the year and reconfirm our guidance for 2021 and 2022 outlook. Separation plans are also well underway and we look forward to sharing our strategy and growth outlook for New GSK with investors in June."

GSK shares rose 0.6% to £13.44.6p at 13:01 BST.