GlaxoSmithKline Q2 Results

[SuperCally]

Including:

<<<<
Quarterly dividends

The Board has declared a second interim dividend for 2021 of 19 pence per share (Q2 2020: 19 pence per share).

GSK recognises the importance of dividends to shareholders and aims to distribute regular dividend payments that will be determined primarily with reference to the free cash flow generated by the business after funding the investment necessary to support the Group's future growth.

The Board currently intends to maintain the dividend for 2021 at the current level of 80p per share, subject to any material change in the external environment or performance expectations.

At the New GSK Investor Update on 23 June GSK set out that from 2022 a progressive dividend policy will be implemented, guided by a 40 to 60 percent pay-out ratio through the investment cycle. This is a key part of the capital allocation framework. For 2022, for the first half of the year, GSK expects to declare a 27p dividend for the current group. GSK is on track to separate into two companies early in the second half of 2022. GSK expects the aggregate dividend, across the two new businesses to be 28p per share for the second half. In aggregate this would represent on a full year 2022 basis the equivalent of a Group dividend of 55p per share, representing a 31% decrease from the 80p/share dividend expected for 2021. This expected, aggregate 55p per share dividend for full year 2022 is comprised of 44p representing New GSK's policy, and an expected 11p from the Consumer Healthcare business. Dividend policy for the new Consumer Healthcare company will be set by its Board of Directors. In 2023, the first full year of standalone operations for New GSK, GSK expects to declare a full year dividend of 45p per share.

Payment of dividends

The equivalent interim dividend receivable by ADR holders will be calculated based on the exchange rate on 5 October 2021. An annual fee of $0.03 per ADS (or $0.0075 per ADS per quarter) is charged by the Depositary.

The ex-dividend date will be 19 August 2021, with a record date of 20 August 2021 and a payment date of 7 October 2021.
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https://www.investegate.co.uk/glaxosmit ... 00017647G/

[moorfield]

The Board currently intends to maintain the dividend for 2021 at the current level of 80p per share, subject to any material change in the external environment or performance expectations.

Over the next twelve months I am currently factoring in a dividend of 19p + 19p + 23p (financial year 2021) + 19p*55/80 (post-split aggregate) = 74.06p which puts GSK (and its unborn spawn) on a prospective (ntm) yield of 5.3% today. That will continue to reduce over the next three quarters - 68.12p, 62.18p and finally 55p once the final has been paid next April. Who knows what the yield will be at that point, but I plan to hold onto both new holdings (assuming I'm given that option) until the end of 2022 at least.

[Dod101]

The Board currently intends to maintain the dividend for 2021 at the current level of 80p per share, subject to any material change in the external environment or performance expectations.

Over the next twelve months I am currently factoring in a dividend of 19p + 19p + 23p (financial year 2021) + 19p*55/80 (post-split aggregate) = 74.06p which puts GSK (and its unborn spawn) on a prospective (ntm) yield of 5.3% today. That will continue to reduce over the next three quarters - 68.12p, 62.18p and finally 55p once the final has been paid next April. Who knows what the yield will be at that point, but I plan to hold onto both new holdings (assuming I'm given that option) until the end of 2022 at least.

For our cash flow I do not know if GSK plus Newco intend to continue with quarterly dividends, but it looks as if in this current year we will receive the same as usual. For next year (2022) that 80p will be reduced to 23p (the final for 2021) then 27p for the first half of 2022. Thereafter it gets a bit tricky as they say that for the second half the dividend will be 28p over the two companies, presumably it will still be paid quarterly and if so possibly half of it will actually be paid in 2022, so say an additional 14p. That would mean a payment during 2022 of only 64p. It is not often that we get dividends set out so far in advance and I am not much impressed.

Dod

[idpickering]

It is not often that we get dividends set out so far in advance and I am not much impressed.

Dod

Agreed on both points. However, I'm of a mind right now to do nothing with my GSK holdings. Of course, next year my view might've changed, but next year is, well, a year away.

Ian.

[Arborbridge]

It is not often that we get dividends set out so far in advance and I am not much impressed.

Dod

Agreed on both points. However, I'm of a mind right now to do nothing with my GSK holdings. Of course, next year my view might've changed, but next year is, well, a year away.

Ian.

My initial troughts haven't altered: one either decides to sell fairly soon to avoid all the muck and muddle, or hold through it to see what emerges. I shall probably do the latter which means in effect deciding to do nothing for several years, though I'm not happy about adding yet another company to my HYP. Especially ones I haven't chosen: two rumps making a questionable whole.

As you say, Ian, in a year, I may think differently.

[idpickering]

My initial troughts haven't altered: one either decides to sell fairly soon to avoid all the muck and muddle, or hold through it to see what emerges. I shall probably do the latter which means in effect deciding to do nothing for several years, though I'm not happy about adding yet another company to my HYP. Especially ones I haven't chosen: two rumps making a questionable whole.

As you say, Ian, in a year, I may think differently.

Indeed Arb. Nor am I happy about maybe selling my GSK holdings either.

Ian.

[bluedonkey]

I thought having a "moat" was supposed to lead to superior returns. I think the moat's leaking.

[absolutezero]

My initial troughts haven't altered: one either decides to sell fairly soon to avoid all the muck and muddle, or hold through it to see what emerges. I shall probably do the latter which means in effect deciding to do nothing for several years, though I'm not happy about adding yet another company to my HYP. Especially ones I haven't chosen: two rumps making a questionable whole.

As you say, Ian, in a year, I may think differently.

Indeed Arb. Nor am I happy about maybe selling my GSK holdings either.

Ian.

I'm happy to get rid of GSK! Granted I have a very small amount of it now as I sold most of it to buy other things, but splitting off the toothpaste company strikes me as rearranging the deckchairs on the Titanic.
That combined with a static dividend. It's a dog.

[idpickering]

I'm happy to get rid of GSK! Granted I have a very small amount of it now as I sold most of it to buy other things, but splitting off the toothpaste company strikes me as rearranging the deckchairs on the Titanic.
That combined with a static dividend. It's a dog.

Thanks for your input. I don’t mind admitting you’ve given me ‘food for thought’.
No knee jerk reaction from me just yet though, maybe. Hmm....

Ian.

[Arborbridge]

I thought having a "moat" was supposed to lead to superior returns. I think the moat's leaking.

Or just stagnant and covered in duckweed

[idpickering]

I'm happy to get rid of GSK! Granted I have a very small amount of it now as I sold most of it to buy other things, but splitting off the toothpaste company strikes me as rearranging the deckchairs on the Titanic.
That combined with a static dividend. It's a dog.

Thanks for your input. I don’t mind admitting you’ve given me ‘food for thought’.
No knee jerk reaction from me just yet though, maybe. Hmm....

Ian.

[Deleted (off topic) citation.]

Thanks again for your input. I have a ‘full’ holding oh GSK, and they make up about 4% in capital value terms of my 27 share HYP. My hesitancy is based on the fact that they’re going Ex Div next month, and I’d like to earn that decent yield while I still can with them. After that. Who knows? There’s not many high yielders that I don’t already have, so to bail out of GSK, I’d like to at least have somewhere to invest the released dosh should I decide to sell? I know I don’t want an IT though.

Ian.

[Dod101]

Having held on for as long as you Ian and I have, I do not think that now is the time to ditch Glaxo. They are at last bringing a few things to fruition, and who knows what the spin off will do so I am hanging on to see how things develop.

And I would not be buying HFEL. I am actually seriously thinking of selling it but that is for another Board.

Dod

[idpickering]

Having held on for as long as you Ian and I have, I do not think that now is the time to ditch Glaxo. They are at last bringing a few things to fruition, and who knows what the spin off will do so I am hanging on to see how things develop.

And I would not be buying HFEL. I am actually seriously thinking of selling it but that is for another Board.

Dod

Thanks for your input Dod. I must admit that I’m trying to stick to my HYP knitting, and would rather do nothing with my GSK holdings. For the record, I’ve held the share since 08 Jan 07. And ignoring the dividends received from them over the years, I’m slightly underwater with them! Ok, to be fair I bought it for the dividend before somebody points that out.

Ian.

[Dod101]

Having held on for as long as you Ian and I have, I do not think that now is the time to ditch Glaxo. They are at last bringing a few things to fruition, and who knows what the spin off will do so I am hanging on to see how things develop.

And I would not be buying HFEL. I am actually seriously thinking of selling it but that is for another Board.

Dod

Thanks for your input Dod. I must admit that I’m trying to stick to my HYP knitting, and would rather do nothing with my GSK holdings. For the record, I’ve held the share since 08 Jan 07. And ignoring the dividends received from them over the years, I’m slightly underwater with them! Ok, to be fair I bought it for the dividend before somebody points that out.

Ian.

As I said the corporate reconstruction next year may help otherwise it is going to be a great waste of time and money but let's expect it to ne positive. The loss of some dividend does not help on the HYP Board I know but it will give them a bit more flexibility. The presence of Elliott will do no harm either so between those two factors I am prepared to hold on but I am not a dedicated HYPer. Since you appear to reinvest most of your dividends you should maybe just relax as well.

Dod

[moorfield]

Over the next twelve months I am currently factoring in a dividend of 19p + 19p + 23p (financial year 2021) + 19p*55/80 (post-split aggregate) = 74.06p which puts GSK (and its unborn spawn) on a prospective (ntm) yield of 5.3% today. That will continue to reduce over the next three quarters - 68.12p, 62.18p and finally 55p once the final has been paid next April. Who knows what the yield will be at that point, but I plan to hold onto both new holdings (assuming I'm given that option) until the end of 2022 at least.

Since GSK Q2 has gone ex-dividend last week I have adjusted income ntm down again to 19p + 23p (Q3, Q4 financial year 2021) + 19p*55/80 + 19p*55/80 (Q1, Q2 post-split aggregate) = 68.12p which puts forecast (aggregate) yield at 4.5% today.

[floyd3592]

Having held on for as long as you Ian and I have, I do not think that now is the time to ditch Glaxo. They are at last bringing a few things to fruition, and who knows what the spin off will do so I am hanging on to see how things develop.

And I would not be buying HFEL. I am actually seriously thinking of selling it but that is for another Board.

Dod

What's ur concern with HFEL Dod?

[Arborbridge]

Having held on for as long as you Ian and I have, I do not think that now is the time to ditch Glaxo. They are at last bringing a few things to fruition, and who knows what the spin off will do so I am hanging on to see how things develop.

And I would not be buying HFEL. I am actually seriously thinking of selling it but that is for another Board.

Dod

What's ur concern with HFEL Dod?

OT for a moment to answer this: it's because the dividend is partly paid for by a deterioration in your on capital "expensively bought" as Dod would say. As evidence of this, my own holding of HFEL has given a TR from 2011 of 5.9%pa. So given that the yield is similar or higher than that, I deduce that the capital has been eroded. Not seriously, but definitely.

Arb.

[idpickering]

Having held on for as long as you Ian and I have, I do not think that now is the time to ditch Glaxo. They are at last bringing a few things to fruition, and who knows what the spin off will do so I am hanging on to see how things develop.

And I would not be buying HFEL. I am actually seriously thinking of selling it but that is for another Board.

Dod

What's ur concern with HFEL Dod?

OT for a moment to answer this: it's because the dividend is partly paid for by a deterioration in your on capital "expensively bought" as Dod would say. As evidence of this, my own holding of HFEL has given a TR from 2011 of 5.9%pa. So given that the yield is similar or higher than that, I deduce that the capital has been eroded. Not seriously, but definitely.

Arb.

I’ve never held HFEL, but as the name of the game here is the income, and share price movements secondary, I’d be inclined to let it be and just accept that the share isn’t going to out perform on the capital value front, and just be grateful for the income. But then, what do I know? Each to their own, and all that. As for GSK, my intention is to continue to hold, for now at least.

Ian.

[Dod101]

Having held on for as long as you Ian and I have, I do not think that now is the time to ditch Glaxo. They are at last bringing a few things to fruition, and who knows what the spin off will do so I am hanging on to see how things develop.

And I would not be buying HFEL. I am actually seriously thinking of selling it but that is for another Board.

Dod

What's ur concern with HFEL Dod?

Yes Arb has covered it. There is a thread which I started on the IT Board and many felt that maybe Schroders Oriental Income might be a better bet. As this is the HYP Board I will not expand on that.

Dod

Moderator Message:
This thread has gone off topic and is now closed.

TJH

[Arborbridge]

I’ve never held HFEL, but as the name of the game here is the income, and share price movements secondary, I’d be inclined to let it be and just accept that the share isn’t going to out perform on the capital value front, and just be grateful for the income. But then, what do I know? Each to their own, and all that. As for GSK, my intention is to continue to hold, for now at least.

Ian.

Well, interestingly, it is relevant to GSK too. My TR since first purchase is 6.4% - that's what, about 1% above my average yield. Since that 1% is less than inflation, one might say that the buying power of my capital has probably decreased because the yield has been "too high".
But, as you say, that's not really a problem if we never sell - though as recent comments here suggest, HYPers do sell even though they start off intending not to

Arb.