FTSE 100 giant GSK eyes more than £40bn in sales by 2031
Pharmaceutical giant GSK has hiked its 2031 sales forecast to more than £40bn, up from £38bn, after reporting better than forecast fourth quarter earnings.
The London-listed pharma giant reported core earnings per share of 23.2p for the quarter, a drop of around 20 per cent year-on-year. However, this was greater than the 19p that analysts had forecast.
Shares rose nearly six per cent in early trading.
For the year as a whole, in 2024, the group reported core earnings per share of 159.3p, up 10 per cent at constant exchange rates.
Turnover rose seven per cent at constant exchange rates to £31.4bn or eight per cent, excluding Covid pandemic-related sales.
GSK announced a 16p per share dividend for the fourth quarter, taking the full-year payout to 61p. It said it expected to pay out 64p in 2025.
The group also said it would return £2bn to investors over the next 18 months y way of a share buyback.
GSK’s forward sales projections
For the year ahead, GSK said it expects turnover to grow between three to five per cent in 2025, alongside core operating profit growth of between six to eight per cent.
“GSK delivered another year of excellent performance in 2024, with strong sales and core profit growth driven by accelerating momentum of our specialty medicines portfolio,” Emma Walmsley, chief executive officer, said in a statement.
“This, together with outstanding phase III pipeline progress, means we expect another year of profitable growth in 2025, and have further improved our long-term outlook, with sales of more than £40bn now expected by 2031.
Walmsley also noted increasing R&D investment and new medicines in its Respiratory, Immunology & Inflammation, Oncology and HIV divisions.
Despite the better-than-expected earnings, GSK also reported a third decline in profit last year as it was forced to pay nearly £2bn to settle lawsuits over the heartburn drug Zantac.
GSK was forced to pay around £1.8bn to settle thousands of cases in US courts in October amid claims Zantac caused cancer.
The firm reached deals with 10 law firms, representing around 80,000 claimants, although it did nto admit wrongdoing in any of the cases.
Derren Nathan, head of equity research at Hargreaves Lansdown: “There was a healthy dose of good news for GSK as it shrugged off concerns around flagging vaccine sales, with results coming in ahead of forecasts for 2024.
“There was a bitter pill in the form of stricter age limits in the US for RSV jab, Arexy, which saw sales of the product slump by 51%. However, on the plus side, it should make comparables a bit easier going forward. In the meantime, sales of speciality medicines have taken up the slack, helped by the emerging oncology franchise, which nearly doubled its contribution to revenue.”