Gsk Share Discussion Threads

[doe808] 06/5/2015 12:41

So no more 'b' shares, then?!

Good

[doe808] 06/5/2015 12:41

So no more 'b' shares, then?!

Good

[speedsgh] 06/5/2015 12:31

"As a result of the review, GSK is announcing that it expects to pay an annual ordinary dividend of 80p for each of the next three years (2015-2017).

The Group wishes to ensure that it maintains the flexibility to deploy capital in response to certain events, which may or may not occur in the next five years, including the potential exercise of 'put' options by partners in ViiV Healthcare and Consumer Healthcare; and the possible introduction of a generic version of Advair in the US. The Group has also factored into its view the impact of a continued low interest rate environment on pensions, other employee related liabilities and potential company contributions.

Accordingly, the Group has decided to reduce the planned return to shareholders from the net proceeds generated from the Novartis transaction. GSK now plans to return approximately £1 billion (20p per share) to shareholders via a special dividend to be paid alongside GSK's Q4 2015 ordinary dividend payment.

Any future returns to shareholders of surplus capital will be subject to the Group's strategic progress, visibility on the put options and other capital requirements."

So dividend to be held/maintained at 80p/share for the next 3yrs (excluding special dividend to paid in Q4 2015 alongside the ordinary quarterly dividend).

[atlantic57] 06/5/2015 12:24

cyberian you would have had to have acted very very quickly to catch that fall
before it reversed.

[cyberian] 06/5/2015 12:23

Sorry..I was wrong on timing of special divi which is with 4Q normal divi and not with 1Q....certainly no consolidation from how I read it. With 2015 set to be a re-grouping and earnings slightly lower as stated by the company, they appear very confident over 2016 and going forward with improved returns. The key issue for many is that the dividend is now much more assured.

[4spiel] 06/5/2015 12:17

Does a special dividend definitely mean there will be no consolidation - that is my belief ? And it's ok by me !

[cyberian] 06/5/2015 12:11

So we get 40p with 1Q dividend combined..that's OK and protects future returns...I quite like the results/announcements, and with new Chairman starting tomorrow we may even see further upside.Pity I was too slow on that initial lurch down to 1450p..still Ok with direction of company.

[atlantic57] 06/5/2015 12:08

i guess the spike is people closing their shorts !
The return to shareholders is reduced by 75% but i guess an 80p dividend on
a 15.00 share remains good.

[toffeeman] 06/5/2015 12:04

Nasty spike which will have triggered a few stops!

[tradermichael] 06/5/2015 12:03

GlaxoSmithKline PLC

06 May 2015

Issued: Wednesday, 6 May 2015, London U.K.
GSK sets out prospects for newly shaped Group and expectations for improvements in performance
2016-2020

GSK reports Q1 sales of GBP5.6 billion; Core EPS of 17.3p (-16%) CER


Summary

-- Group revenue expected to grow at a CAGR of low-to-mid single
digits over the five year period 2016-2020 on CER basis:
- Vaccines sales expected to grow at a CAGR of mid-to-high
single digits
- Pharmaceuticals sales expected to grow at a CAGR of low single
digits with the possible introduction of generic Advair in
the US factored into this assessment
- Consumer Healthcare sales expected to grow at a CAGR of mid
single digits

-- Decision taken to retain existing holding in ViiV Healthcare
reflecting updated strong positive outlook

-- Transaction cost savings programme to be accelerated with over
50% of total synergies of GBP1 billion now expected in 2016
(vs 2017), with programme broadly complete by end of 2017 (vs
2019)

-- Total annual benefits of GBP3 billion from combination of existing
restructuring and synergy programmes, now expected to be largely
delivered by end of 2017 within existing cost estimates but
with an accelerated rate of expenditure

-- Group core EPS expected to grow at CAGR of mid-to-high single
digits over the five year period 2016-2020 on a CER basis:
- 2015 core EPS expected to decline at a percentage rate in
the high teens (CER) primarily due to continued pricing pressure
on Advair in US/Europe, the dilutive effect of the transaction
and inherited cost base of the Novartis businesses
- Significant recovery anticipated in 2016 with core EPS percentage
growth expected to reach double digits (CER)

-- Group reaffirms commitment to current credit ratings

-- Capital allocation strategy reviewed. Use of cash to be prioritised
for ordinary dividends and accelerated investments to realise
synergies; as well as providing flexibility to respond to potential
put options associated with ViiV Healthcare and Consumer Healthcare;
and to accommodate possible introduction of generic Advair
in the US

-- Group expects to pay annual ordinary dividend of 80p for each
of the next three years (2015-2017)

-- Return of transaction net proceeds to be reduced to GBP1 billion,
paid as special dividend with Q4 2015 ordinary dividend

-- R&D Investor Day confirmed for 3 November 2015

-- Reported Q1 sales GBP5.6 billion, +1% CER with growth in Vaccines
(+10%), Consumer Healthcare (+24%) offset by Pharmaceuticals
(-7%):
- Pro-forma sales by business: Vaccines +3%; Consumer Healthcare
+8% benefiting from launch of Flonase OTC and strong Oral
health performance; Pharmaceuticals -5% with HIV sales +42%
offset by continued sales declines in Advair and Established
Products

-- Q1 Core EPS of 17.3p (-16%) CER due to mix pressures on Pharmaceuticals
margin and dilutive impact of the transaction, partly offset
by ongoing cost reductions and lower core tax rate (20%):
- Q1 dividend of 19 pence

-- Q1 Total EPS of 167.8p benefit from pre-tax transaction gain
of GBP9.3 billion

[dr biotech] 06/5/2015 10:42

GSK are a customer of ours and whilst I hold a lot of shares here by my standards I am not quite sure I have the power to get the ear of the CEO

[jadeticl3] 06/5/2015 10:20

I agree with you Dr B, but don't forget that before Witty the CEO was a French-background American who operated from US and moved all his senior staff to US. Witty was bold enough to repatriate, but may have agreed to leave announcement time as it was for political reasons. However, I would encourage you to ask him to move it to 7am and I will support you!

[dr biotech] 06/5/2015 09:45

They always announce around midday. Not sure why - I guess its before the US opens. Though given GSK is UK based I think they should announce them at the best time to suit us, ie 7am

[unastubbs] 06/5/2015 07:23

12.00 hr UK time

[unastubbs] 06/5/2015 07:22

nothing on rns? do they usually release later in the morning? i know STAN and HSBA do once the asian markets have closed...

[dr biotech] 05/5/2015 16:39

Not the greatest of days for me today - had a few healthy gains at lunchtime and some sharp losses by tea. Will be interesting to see what they say tomorrow. If they announce the corporate stuff first it may be that they are trying to bury a weak performance - if its the results first then they will be OK. Thats my theory anyway.

[corlis] 05/5/2015 16:17

Now 1509, announcing tomorrow,
Good level to buy in at.

[jadeticl3] 05/5/2015 15:59

Looked very good mid morning (up 35p) but not quite so good now ( up 7p). However, Other stocks are swinging about also, e.g. Astra Z.

[cyberian] 05/5/2015 09:46

Hopefully the market has absorbed the probability of a change over the B share issue and indifferent 1Q figures, and instead looking for some fundamental changes going forward under new Chairman (starts on Thursday but likely to have had some recent input to future direction etc?). The market likes to see constructive moves to correct the recent decline in some sectors at GSK and I believe that they will anticipate changes. However, Witty has re-positioned the mix of lines within GSK with Board support, and he may well have established a more assured base of income streams over the near term. It will therefore be interesting to see whether there are going to be some more bullish noises with tomorrows results and AGM, which will capture a more favourable response in sentiment.

[nik rosa] 05/5/2015 09:38

I agree with you Cyb, having been a victim of the VOD debacle.
But my question would be:
if the money saved by not paying the 82p special div is used to shore up future divi's (which historically have only risen by 2 or 3p per year anyway), what is happening with the rest of the 82p saved? Maybe all will be made clear tomorrow? GLA.
NR

[cyberian] 04/5/2015 16:09

The ADR in WS is showing a move to equiv. of 1537p after initial high of 1543p today, so maybe the market may prefer possible change of strategy with the B share original idea abandoned. I remember with Vodafone broker advising to sell shares in market after early rise as the cash return/exchange would be very messy. It was, and some friends who waited thought that they had come off worse after consolidation. So, with GSK we have seen a good rise for some to sell into recently, followed by market doubts over divi security (cover) for 2016 and beyond with this years div pretty well committed. Also a change of strategy and more dynamic future goals may be better achieved with retention of £4 billion. EPS will suffer a little after inevitable consolidation that would have followed the B share approach, so on balance I would be happy with change of approach.

[philo124] 01/5/2015 21:08

Topped up by 20% this am. fwiw.

[mr woodentop] 01/5/2015 15:16

That is how Berkshire Hathaway operate and has done them well for a long time but they have Warren Buffet at the helm. Not so sure GSK are similarly blessed!

[cyberian] 01/5/2015 15:15

mr w...agree to some extent, but it is all currently based on OK a reasonable speculation by the likes of Goldman Sachs who are quite a fan of the shares. Many would like to see certainty over annual divi levels being maintained or increased, coupled with some strategic changes to advance shareholders return in alternative ways. Despite the recent share price fall, the share price after next Wednesday was always likely to fall back somewhat, but even if the 1Q results are just so so, the market will be looking forward to the company's future plans, under the influence of a well respected new Chairman. Ironically, IF they have changed their minds on the B share issue, the company will be less a target for adverse opinion over the divi cover, and the challenges/opportunities ahead...one could argue that the financial integrity etc. is enhanced. I just fear that some market analysts will haranque the board for being too cavalier if they do not take measures to protect the dividend....who knows..the board may wish to present a more assured/effective, even beneficial approach.

[tradermichael] 01/5/2015 15:00

They should keep the money in the business - shareholders will reap the benefits in the longer term.