Anti-Depressants Give Smithkline A Lift For 1997

The fate of merger talks between UK drug companies SmithKline Beecham and Glaxo Wellcome should be revealed in the first few days of March. This was Jan Leschlys, SmithKlines chief executive (left), only reference to the proposed merger during the presentation of his companys 1997 results. The figures were hurt by the strength of sterling, especially against continental European currencies, but were still largely in line with analysts forecasts. SmithKline shares rose 2p to 837p. Pre-tax profits for the year rose 7 per cent to £1.65 billion. Excluding currency effects, the rise would have been 17 per cent and worth an extra £157 million, according to Hugh Collum, finance director. Turnover fell 2 per cent to £7.79 billion. Excluding currency movements, the figure rose 7 per cent. Earnings per share rose 4 per cent to 19.7p, up 15 per cent excluding currencies. The total dividend is 9.945p, up 11 per cent, following a 3.33p final. Pharmaceuticals sales rose 5 per cent to £4.57 billion, including the DPS distribution business. Trading profit rose 15 per cent to £1.24 billion. DPS has changed its billing procedures which cuts profits but lifts margins. Excluding DPS, pharmaceuticals sales rose 13 per cent. Trading margins across the whole company rose 1.7 percentage points to 22.2 per cent. Star products were Paxil/ Seroxat, the anti-depressant, with sales up 39 per cent to £899 million, and antibiotic Augmentin, with sales up 17 per cent to £925 million. US pharmaceuticals sales grew 16 per cent, excluding DPS, but in France they fell 6 per cent. In the consumer healthcare division, where products range from anti-smoking chewing gum to soft drinks, sales rose 11 per cent to £2.38bn. Trading profit rose 17 per cent to £398 million.