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GSK Q2 Pre-tax Profit Down, But Lifts FY Outlook

GSK plc (GSK.L) reported that its second quarter profit before taxation declined to 896 million pounds from 1.07 billion pounds last year.

At constant exchange rate or CER, the company now expects 2022 sales growth of between 6% to 8% compared to the prior outlook of 5% to 7%. It now expects annual adjusted operating profit growth of between 13% to 15% compared the prior outlook of 12% to 14%. Adjusted earnings per share is expected to grow by around 1% lower than operating profit.

The 2022 guidance excluded any contribution from COVID-19 solutions.

GSK's profit attributable to shareholders for the second quarter decreased to 838 million pounds or 20.6 pence per share from 1.40 billion pounds or 34.5 pence per share in the previous year.

Earnings per share from continuing operations declined to 17.4 pence from the prior year's 30.1 pence, reflecting increased charges for remeasurement of contingent consideration liabilities as well as an unfavourable comparison due to a credit of 325 million pounds to Taxation in the prior year.

Adjusted earnings per share was 34.7 pence compared with 28.2 pence in the prior year, up 23% at actual exchange rates or AER, 6% at CER, on a 7% CER increase in Adjusted operating profit. This primarily reflected higher COVID-19 solutions sales at low margin with the reduction to growth from COVID-19 solutions being approximately 20% at AER, 18% at CER.

Total turnover for the quarter was 6.93 billion pounds, up 19% at AER, 13% at CER, reflecting strong performance in all three product groups.

From the second quarter of 2022, GSK presented the Haleon plc business as a discontinued operation according to IFRS 5. Adjusted results excludes profits from discontinued operations. Comparatives have been restated to reflect adjusted results from continuing operations, and guidance is provided on this basis.

On 18 July 2022, GSK plc separated its Consumer Healthcare business from the GSK Group to form Haleon, an independent listed company. The separation was effected by way of a demerger of 80.1% of GSK's 68% holding in the Consumer Healthcare business to GSK shareholders.

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