GSK ‘encouraged’ by Covid vaccine rollout as sales and profits jump

GlaxoSmithKline has posted a jump in sales and profits for the past three months as the drugs giant said it was “encouraged” by the speed of Covid-19 vaccinations in the UK and other countries.

The firm – which is spinning off its consumer healthcare arm – revealed that turnover increased by 6% to £8.1 billion for the second quarter of 2021 as it saw some coronavirus disruption fade.

It also told investors that operating profits increased by a better-than-expected 23% to £2.1 billion over the second quarter.

The firm added that it expects underlying earnings per share at the better end of its guidance for a decline by a mid to high-single digit percentage this year.

Glaxosmithkline (GSK) said it had anticipated some disruption in its vaccine business as the Government prioritised Covid-19 vaccinations over other jabs, but the firm said it has been “encouraged” by the rate at which Covid-19 vaccines have been deployed in many countries, highlighting the US and UK.

It said this will “provide support for healthcare systems returning to normal” although it also highlighted significant “global differentiation”, with only 13% of the worldwide population currently double-jabbed.

The firm’s vaccine arm saw turnover increase by 39% to £1.57 billion for period.

GSK said it notched up £258 million of sales in its first half from its pandemic adjuvant, which is used to boost the effectiveness of coronavirus vaccines.

But it expects revenues from vaccines over the full year will be broadly flat as sales of its key shingles inoculation continues to be impacted by the global focus on Covid-19.

Meanwhile, Glaxo said its pharmaceutical business reported a 4% increase in turnover and consumer healthcare business saw a 3% decline.

The update comes weeks after activist investor Elliott called for a shake-up of the healthcare firm and said it should hire a new board.

Emma Walmsley, chief executive officer at GSK, said: “GSK delivered an excellent performance in the second quarter.

“We expect this positive momentum to continue through the second half of the year, driving us towards the better end of our earnings guidance range for 2021, and meaningful performance improvement in 2022.

“We continue to strengthen our pipeline and are advancing well towards separation.

“Our clear priority is to focus on execution, unlocking the value of consumer healthcare and delivering the step-change in growth and performance we now see for GSK.”

Ms Walmsley has come under pressure in recent months as GSK prepares to split its consumer healthcare business from its pharmaceutical arm next year.

Elliott has questioned her role as head of the drugs side of the business following the demerger and has also called on the board to seriously consider any alternative to the proposed plan for separation.