Business change for GlaxoSmithKline

By: Miguel A. Rodriguez

18:07, 28 June 2021

The British multinational pharmaceutical company announced changes regarding its business that will be applicable starting 2022

Britain’s GlaxoSmithKline revealed in an investor update meeting that it would spin off the Consumer Healthcare division and likely slash its dividend. The company’s officials stated the following:

“The new Consumer Healthcare company will have a portfolio which generated annual sales of more than 10 billion pounds ($14 billion) in 2020 and is well-positioned for further growth.”

The separation is expected in mid-2022. GSK will list the consumer unit on the London Stock Exchange. It will keep as much as 20% of the business as a short-term investment to be sold later to strengthen the balance sheet.

Moreover, regarding its dividends, GlaxoSmithKline projects it will total 80 pence in 2021 and decrease to 55 pence in 2022.

The new company will adopt a progressive dividend policy targeting a payout ratio equivalent to 40% to 60%, starting at 45 pence per share in 2023, during its first year of existence. The announced cut is smaller than what analysts were looking for.

GSK ended the day up 1% in London. The stock went up 8% over the past six months.


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This information/research prepared by Miguel A. Rodriguez does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. The research analyst primarily responsible for the content of this research report, in part or in whole, certifies that the views about the companies and their securities expressed in this report accurately reflect his/her personal views and consequently any person acting on it does so entirely at their own risk.The research provided does not constitute the views of KW Investments Ltd nor is it an invitation to invest with KW Investments Ltd. The research analyst also certifies that no part of his/her compensation was, is, or will be, directly, or indirectly, related to specific recommendations or views expressed in this report.The research analyst in not employed by KW Investments Ltd. You are encouraged to seek advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit that conforms to your specific investment objectives, financial situation, or particular financial needs before making a commitment to invest. The laws of the Republic of Seychelles shall govern any claim relating to or arising from the contents of the information/ research provided.