GSK Reports Sharp Decline in Profit; Outlook Shows Growth

GSK reported a 43% drop in profit before tax for fiscal 2024, alongside a significant decrease in EPS. Despite this, the company anticipates growth for 2025 and a share buyback program, indicating a potentially positive outlook.

Date: 05-02-2025

AI Rating: 6

Earnings Per Share (EPS) - GSK reported an earnings per share of 63.2 pence for fiscal 2024, reflecting a 48% decrease at AER and a 40% decrease at CER. Although the core earnings per share increased by 3% at AER and 10% at CER to 159.3 pence, the overall EPS drop is concerning for investors.

Revenue Growth - GSK's turnover for the fiscal year was 31.38 billion pounds, representing an increase of 3% at AER and 7% at CER. In the fourth quarter, turnover was reported at 8.12 billion pounds, indicating minor growth compared to the previous year at 1% AER and 4% CER.

Fiscal Outlook and Guidance - GSK projects an optimistic growth trajectory for 2025, expecting turnover to increase by 3% to 5% and core operating profit to rise by 6% to 8%. This suggests GSK may be able to recover from past declines.

Dividend and Share Buyback - The announcement of a 2 billion pounds share buyback over 18 months is a sign of confidence in the company’s financial health. Additionally, the foresight of increasing dividends from 61 pence for the full year 2024 to an expected 64 pence in 2025 may enhance investor sentiment.

Long-Term Projections - By 2031, GSK anticipates achieving sales exceeding 40 billion pounds, showing the company's potential for long-term growth. Its unchanged expectation for a 7% CAGR in sales from 2021-2026 and more than 11% increase in core operating profit further establishes a foundation for positive investor confidence.

In conclusion, while GSK's short-term performance shows declines, the positive projections, increased R&D investment, and active shareholder returns through dividends and buybacks could lead to renewed confidence in the company's future.

Stocks: GSK