Gsk Share Discussion Threads

[montyhedge] 23/6/2021 21:09

In 2023 dividend cut to 45p, to me all seems a big gamble.

[montyhedge] 23/6/2021 20:53

So 30% dividend cut, is it still paid quarterly or is it now every six months?

[eurofox] 23/6/2021 20:34

probably a gap to fill?

[essentialinvestor] 23/6/2021 19:22

No reply facility yet on the IR site, sloppy.

[montyhedge] 23/6/2021 19:17

I would say down tomorrow.

[netcurtains] 23/6/2021 19:14

Do you guys think it might continue to rise tomorrow?

[geckotheglorious] 23/6/2021 17:33

Interesting day...

Linked for people's perusal, no interest either way myself.



From II

"GlaxoSmithKline: aggressive growth to compensate for dividend cut"
Reaction to Glaxo’s eagerly awaited strategy update has been largely positive despite bad news for income seekers.

GlaxoSmithKline
GSK
1.03%

shareholders are to see a 31% cut in dividend income as the drugs giant embarks on its strategy for delivering a “step-change” in growth in the next decade.

The Glaxo divi is one of the most prized in the FTSE 100 index, having been at 80p a share since 2014 for a current yield of 5.7% and pay-out ratio representing 80% of forecast earnings.

It will be reduced in 2022 for the first time in the 21 years since the merger of Glaxo Wellcome and SmithKline Beecham, as chief executive Dame Emma Walmsley (pictured) looks to focus resources on ways to remedy the company's lacklustre share price performance.

In exchange for the dividend re-set, shareholders were today promised annual sales growth of more than 5% and operating profit growth of 10% between 2021 and 2026.

Dame Emma's overall ambition is sales of £33 billion by 2031 as Glaxo prioritises investment around vaccines and speciality medicines in oncology, HIV and hard-to-treat diseases.

City investors applauded the plans, although today's 3% rise in share price to 1,439p still only takes the company back to levels last seen in November.

The guidance for a dividend of about 55p next year includes a final contribution from the consumer healthcare division being demerged next year.

The remaining “New GSK” business is expected to adopt a progressive dividend policy targeting a pay-out ratio equivalent to about 40%-60%, starting with 45p a share in 2023. The planned 31% reduction to 55p equates to a yield of 3.9%, with the subsequent 45p for the New GSK business yielding 3.2%.

interactive investor’s head of equities Richard Hunter said: “Even at the lower levels, the yields remain relatively attractive given the current interest rate backdrop.

“By rebasing the dividend, this gives the company some flexibility towards achieving its new progressive policy, while also freeing up capital to help finance its wider ambitions to invest in the company’s product pipeline.”

Glaxo will demerge 80% of its majority stake in the Sensodyne and Panadol consumer joint venture to Glaxo shareholders, with the new shares set for a premium listing in London.

The separation of a business that generated annual sales of more than £10 billion last year should take place by the middle of 2022 and lead to an £8 billion windfall payment to New GSK.

The narrower focus will enable New GSK to further enhance an existing pipeline of 20 vaccines and 42 medicines, many of which it says are potential best or first in class opportunities.

Glaxo in a better place
Dame Emma believes the company is now much better placed than when she was appointed chief executive in 2017, having overseen a “huge transformation” that has included the strengthening of R&D and improvements in commercial execution.

She added: “We are now ready to deliver a step-change in growth for New GSK and unlock the value of Consumer Healthcare.

“New GSK is exceptionally well positioned to positively impact people's health and to deliver strong performance and value to shareholders through the decade."

Having set out her strategy for improving Glaxo's performance, attention will now turn to the reaction of activist investor Elliott Management.

Little is known about Elliott's intentions towards Glaxo after it bought a significant stake earlier this year. However, it should be remembered that Elliott was in the background when rare disease specialist Alexion Pharmaceuticals sold itself to AstraZeneca for $39 billion in December.

New York-based Elliott first took a stake in Alexion in 2017 and spoke out last May in opposition to the chief executive's plan to diversify its research pipeline, adding that the company should be considering an outright sale

[essentialinvestor] 23/6/2021 17:28

LEX in the FT calling today's CH decision a fudge that will please no one -
referring to GSK retaining a stake.

Also the investment in the pipeline is taking longer to deliver
than anticipated - slightly harsh but that's what they say.

[abdullla] 23/6/2021 17:17

It looks Emma has escaped the guillotine .

[essentialinvestor] 23/6/2021 16:20

just added a few but mentioned the potential for a mini drop earlier,

will that continue tomorrow, can't call that one.

[arja] 23/6/2021 16:07

tempted to re-enter having sold earlier but did not get out at top . Worried that it might start to fill the gap from a charting viewpoint . Mining stocks are the way to go today and might follow through in OZ !

[essentialinvestor] 23/6/2021 16:05

Alex, agree. Unless it was AZN.


Takeover rules have been tightened for companies integral to fighting the pandemic in any case.

[alex1621] 23/6/2021 15:57

I believe the consumer division will be an M&A target, with little push back from Government. Pharma is a different matter, as I don't think it would get approval.

[alphorn] 23/6/2021 15:46

"we see the key negative for the market being the 20% sale of the Consumer stake"

I see that as a signal that may attract predators. The potential of some further corporate activity should IMO not be ruled out.

[alex1621] 23/6/2021 15:37

I thought the presentations so far have been good, they are now on a 10 minute break. I'm not drawing any conclusions from the SP, as you don't know what's behind that ... the presentations reflect the announcement that's already been posted earlier.

[thamestrader] 23/6/2021 15:33

Blimmin' eck, she's so bad she's dragged AZN down, too!

[lovewinshatelosses] 23/6/2021 15:25

Yep. Should have taken that small window of opportunity to dump my position for a small profit and sat back. Oh well, no matter. GLA.

[spud] 23/6/2021 15:23

So EW started talking at 2pm? By 2.20pm the value had dropped by 50% of the gain before she started presenting?

Am I missing something here or is EW really prompting a sell off when she opens her mouth?

spud

[abdullla] 23/6/2021 15:16

This is how the hedge funds trade in this weak uk market,from 45p up its going down towards RED,yes by the close it may well go down in the red,so all this drama of GSK presentation going on now would have been for nothing.

[essentialinvestor] 23/6/2021 15:16

CH spin-off gets £8 BN in debt in other words.

Expectations on oncology appear to have been dialed down?,

having looked at the presentation slides that's what struck me.

Vaccines now appear to be their main growth area.

The oncology pipeline was previously touted as being potentially transformative,
not so much attention on that today.

Any views on this?, thanks.

[spoole5] 23/6/2021 15:15

The irony being they were falling as she said it!

[pierre oreilly] 23/6/2021 15:15

Hard to keep track, but i assume everyone who was pleased they held ten mins ago is now pleased they sold? And the charts are showing nothing but down now, whereas ten mins ado they signaled a certain up channel. I think i'm catching on to this investment lark.