TIDMAG99
RNS Number : 6503U
GlaxoSmithKline Capital PLC
02 August 2022
Publication of GlaxoSmithKline Capital plc
Interim Management Report 2022
Today, 2 August 2022, GlaxoSmithKline Capital plc (the
"Company") published on the GSK Group ("GSK") website, www.gsk.com
*, its Interim Management Report in respect of the period ended 30
June 2022.
In compliance with Listing Rule 9.6.1 of the UK Financial
Conduct Authority ("FCA"), copies of the Company's Interim
Management Report, have been submitted to the UK Listing
Authority's NSM submission portal via the Electronic Submission
System (ESS). A copy can be viewed at
https://data.fca.org.uk/#/nsm/nationalstoragemechanism .
In accordance with the FCA's Disclosure and Transparency Rules
4.2 and 6.3.5, Appendix A to this announcement contains the
Company's Interim Management Report, which includes a description
of the principal risks and uncertainties affecting it together with
a responsibility statement.
V A Whyte
Company Secretary
2 August 2022
*
https://www.gsk.com/en-gb/about-us/codes-and-standards/other-reports
Cautionary statement regarding forward-looking statements
Under the safe harbor provisions of the U.S. Private Securities
Litigation Reform Act of 1995, GlaxoSmithKline plc (GSK) and the
company cautions investors that any forward-looking statements or
projections made by GSK, including those made in this announcement,
are subject to risks and uncertainties that may cause actual
results to differ materially from those projected. Such factors
include, but are not limited to, those described under Item 3.D
"Risk Factors" in GSK's Annual Report on Form 20-F for 2020 and any
impacts of the COVID-19 pandemic.
APPIX A
GlaxoSmithKline Capital plc
(Registered number: 02258699)
Interim Management Report
for the half year ended 30 June 2022
Registered office address:
980 Great West Road
Brentford
Middlesex
TW8 9GS
GlaxoSmithKline Capital plc
(Registered number: 02258699)
Interim Management Report
for the half year ended 30 June 2022
Contents Pages
Interim report 1-2
Income statement 3
Statement of comprehensive income 4
Statement of financial position 5
Statement of changes in equity 6
Cash flow statement 7
Notes to the financial statements 8-10
GlaxoSmithKline Capital plc
(Registered number: 02258699)
Results announcement and interim management report for the half
year ended 30 June 2022
Performance
GlaxoSmithKline Capital plc (the "Company") is a member of the
GSK Group (the "Group"). The principal activities of the Company
during the financial year were the issuance of notes under the
Group's European Medium Term Note programme and the provision of
financial services to other companies within the Group. The
Directors do not envisage any change to the nature of the business
in the foreseeable future.
The Directors do not envisage any change to the nature of the
business in the foreseeable future.
Review of business
The Company made a profit for the half year ended 30 June 2022
of GBP7,653,000 (2021: GBP6,685,000), which will be transferred to
reserves. The Directors are of the opinion that the current level
of activity and the period end financial position are satisfactory
and will remain so in the foreseeable future.
No dividend is proposed to the holders of ordinary shares in
respect of the period ended 30 June 2022 (2021: GBPnil).
At 30 June 2022, the Company had in issue GBP10,635,244,000
European Medium Term Notes and GBP2,671,831,000 US Medium Term
Notes (31 December 2021: GBP10,519,164,000 and GBP4,994,472,000
respectively), which mature at dates between 2023 and 2045. All
notes currently in issue pay interest on a fixed rate basis.
In May 2022, the Company has repaid the following notes:
-- USD 2,000 million 2.85% US Medium Term Note
-- USD 1,500 million 2.875% US Medium Term Note
Principal risks and uncertainties
The Directors of GSK plc (formerly GlaxoSmithKline plc) manage
the risks of the Group at a group level, rather than at an
individual statutory entity level. For this reason, the Company's
Directors believe that a discussion of the Group's risks would not
be appropriate for an understanding of the development, performance
or position of the Company's business. The principal risks and
uncertainties of the Group, which include those of the Company, are
discussed in the Group's 2021 annual report which does not form
part of this report.
Directors' responsibility statement
The Board of Directors approved this document on 3 August
2022.
The Directors confirm that to the best of their knowledge this
unaudited condensed financial information for the six months ended
30 June 2022 has been prepared in accordance with Financial
Reporting Standard 104 "Interim Financial Reporting" and that the
interim management report herein includes a true and fair view of
the information required by Disclosure and Transparency Rules (DTR)
4.2.7.
Risks associated with COVID-19
The impact of the COVID-19 pandemic on the Group's performance
and its principal risks has been assessed with mitigations plans
put in place. Further disclosures detailing how, during the year,
the COVID-19 pandemic has impacted the Group can be found on page
54 of the consolidated financial statements of the Group. Copies of
the consolidated financial statements can be obtained from the
Company Secretary, GSK plc, 980 Great West Road, Brentford,
Middlesex, TW8 9GS.
The Directors of the Company are:
Mr I Mackay
Edinburgh Pharmaceutical Industries Limited
Glaxo Group Limited
By order of the Board
Mr A Walker
For and on behalf of Glaxo Group Limited
Corporate Director
3 August 2022
Internet
This Announcement and other information about the GSK Group are
available on the website at: http://www.gsk.com .
GlaxoSmithKline Capital plc
Income statement
for the half year ended 30 June 2022
Period ended Period ended
30 June 2022 30 June 2021
Note GBP'000 GBP'000
--------------------------------- ----- -------------- --------------
Other operating loss 2 1,810 (1,197)
Finance income 3 221,731 224,460
Finance expense 4 9,448 8,254
--------------------------------- ----- -------------- --------------
16,206 21,757
--------------------------------- ----- -------------- --------------
Profit before taxation
Tax on profit 5 (1,795) (1,569)
--------------------------------- ----- -------------- --------------
Profit for the financial period 7,653 6,685
--------------------------------- ----- -------------- --------------
GlaxoSmithKline Capital plc
Statement of comprehensive income
for the half year ended 30 June 2022
Period ended Period ended
30 June 2022 30 June 2021
GBP'000 GBP'000
Profit for the financial period 7,653 6,685
Items that may be subsequently reclassified to
the income statement:
Fair value movements on cash flow hedges - -
Reclassification of cash flow hedges to the income
statement 1,769 1,851
Deferred tax on fair value movements on cash flow
hedges (336) 46
Other comprehensive income for the financial
period 1,433 1,897
Total comprehensive income for the financial
period 9,086 8,582
---------------------------------------------------- -------------- --------------
GlaxoSmithKline Capital plc
Balance sheet
as at 30 June 2022
30 June 2022 31 December 2021
Note GBP'000 GBP'000
--------------------------------------- ----- ------------- -----------------
Non-current assets
Deferred tax assets 4,028 4,364
Loans and receivables 6 12,689,880 12,931,472
Total non-current assets 12,693,908 12,935,836
--------------------------------------- ----- ------------- -----------------
Current assets
Loans and receivables 6 724,127 2,682,990
Prepayments and accrued income 7 99,477 142,579
Cash and cash equivalents 1 4
--------------------------------------- ----- ------------- -----------------
Total current assets 823,605 2,825,573
--------------------------------------- ----- ------------- -----------------
Total assets 13,517,513 15,761,409
--------------------------------------- ----- ------------- -----------------
Current liabilities
Trade and other payables 8 - (4,196)
Corporation tax (4,874) (3,079)
Accruals and deferred income 10 (90,492) (134,512)
Short-term borrowings 9 (643,647) (2,595,811)
--------------------------------------- ----- ------------- -----------------
Total current liabilities (739,013) (2,737,598)
--------------------------------------- ----- ------------- -----------------
Net current assets 84,592 87,975
--------------------------------------- ----- ------------- -----------------
Total assets less current liabilities 12,778,500 13,023,811
--------------------------------------- ----- ------------- -----------------
Non-current liabilities
Long-term borrowings 9 (12,663,428) (12,917,825)
Total non-current liabilities (12,663,428) (12,917,825)
--------------------------------------- ----- ------------- -----------------
Total liabilities (13,402,441) (15,655,423)
--------------------------------------- ----- ------------- -----------------
Net assets 115,072 105,986
--------------------------------------- ----- ------------- -----------------
Equity
Called up share capital 13 100 100
Other reserves (11,657) (13,090)
Retained earnings 126,629 118,976
--------------------------------------- ----- ------------- -----------------
Total equity 115,072 105,986
--------------------------------------- ----- ------------- -----------------
GlaxoSmithKline Capital plc
Statement of changes in equity
for the half year ended 30 June 2022
Called
up share Retained Total
capital Other reserves earnings equity
GBP'000 GBP'000 GBP'000 GBP'000
--------------------------------- ---------- --------------- ---------- --------
At 1 January 2021 100 (17,141) 105,849 88,808
Profit for the financial period - - 6,685 6,685
Other comprehensive income for
the financial period - 1,897 - 1,897
--------------------------------- ---------- --------------- ---------- --------
At 30 June 2021 100 (15,244) 112,534 97,390
--------------------------------- ---------- --------------- ---------- --------
Called
up share Retained Total
capital Other reserves earnings equity
GBP'000 GBP'000 GBP'000 GBP'000
--------------------------------- ---------- --------------- ---------- --------
At 1 January 2022 100 (13,090) 118,976 105,986
Profit for the financial period - - 7,653 7,653
Other comprehensive income for
the financial period - 1,433 - 1,433
--------------------------------- ---------- --------------- ---------- --------
At 30 June 2022 100 (11,657) 126,629 115,072
--------------------------------- ---------- --------------- ---------- --------
GlaxoSmithKline Capital plc
Cash flow statement
for the half year ended 30 June 2022
Period ended Period ended
30 June 30 June
2022 2021
(restated)*
Note GBP'000 GBP'000
-------------------------------------------------- ----- ------------- -------------
Cash flows from operating activities
Operating profit 9,448 8,254
Adjustments reconciling operating profit
to operating cash flows 12 3,458 3,294
Taxation paid - -
Net cash inflow from operating activities 12,906 11,548
-------------------------------------------------- ----- ------------- -------------
Cash flows from financing activities
Proceeds from borrowings - -
Repayment of borrowings (2,813,895) (533,048)
Loans provided to Group undertakings - -
Loan repayments received from Group undertakings 2,795,017 531,715
(Increase) / decrease in current accounts
with Group undertakings 5,969 (10,215)
-------------------------------------------------- ----- ------------- -------------
Net cash outflow from financing activities (12,909) (11,548)
-------------------------------------------------- ----- ------------- -------------
Net movement in cash in the period (3) -
-------------------------------------------------- ----- ------------- -------------
Cash at beginning of period 4 4
Movement in cash - -
-------------------------------------------------- ----- ------------- -------------
Cash at end of period 1 4
-------------------------------------------------- ----- ------------- -------------
* The 2021 comparatives are restated as the profit for the
financial period had been used instead of operating profit in the
interim 2021 accounts, with the tax charge for the year adjusted in
Adjustments reconciling operating profit to operating cash
flows.
GlaxoSmithKline Capital plc
Notes to the financial statements for the half year ended 30
June 2022
1. Accounting presentation and policies
This unaudited Results Announcement containing condensed
financial information for the six months ended 30 June 2022 is
prepared in accordance with Financial Reporting Standard 104
"Interim Financial Reporting" using the recognition and measurement
requirements of Financial Reporting Standard 101 "Reduced
Disclosure Framework" and in accordance with the Listing Rules of
the UK Listing Authority. The same accounting policies and methods
of computation are followed in the interim nancial statements as
compared with the most recent annual nancial statements.
2. Operating profit
Period ended Period ended
30 June 2022 30 June 2021
GBP'000 GBP'000
---------------------------------------------------- -------------- --------------
The following items have been credited / (charged)
in operating profit:
Exchange gains/(losses) on foreign currency
transactions 1,810 (1,197)
----------------------------------------------------- -------------- --------------
3. Finance income
Period ended Period ended
30 June 2022 30 June 2021
GBP'000 GBP'000
----------------------------------------------- -------------- --------------
Interest income arising from loans with Group
undertakings 221,731 224,460
------------------------------------------------ -------------- --------------
4. Finance expense
Period ended Period ended
30 June 2022 30 June 2021
GBP'000 GBP'000
------------------------------------------------ -------------- --------------
Interest expense arising on financial
liabilities at amortised cost (212,324) (213,158)
Reclassification of cash flow hedge from other
comprehensive income (1,769) (1,851)
Total finance expense (214,093) (215,009)
-------------------------------------------------- -------------- --------------
5. Taxation
Period ended Period ended
30 June 2022 30 June 2021
Income tax expense on ordinary activities GBP'000 GBP'000
------------------------------------------- -------------- --------------
Current tax:
UK corporation tax at 19% (2021: 19%) (1,795) (1,569)
------------------------------------------- -------------- --------------
Total current tax (1,795) (1,569)
------------------------------------------- -------------- --------------
Period ended Period ended
30 June 2022 30 June 2021
Total tax (expense) / credit included in other GBP'000 GBP'000
comprehensive income
-------------------------------------------------- -------------- --------------
Deferred tax:
Fair value movements on cash
flow hedges (336) 46
-------------------------------------------------- -------------- --------------
Total tax (expense) / credit included in other
comprehensive income (336) 46
-------------------------------------------------- -------------- --------------
6. Trade and other receivables
30 June 31 December
2022 2021
GBP'000 GBP'000
----------- ------------
Amounts due within one year
Amounts owed by Group undertakings 724,127 2,682,990
724,127 2,682,990
--------------------------------------------- ----------- ------------
Amounts due after more than one year
Long term deposits 114 176
Amounts owed by Group undertakings - loans 12,689,766 12,931,296
12,689,880 12,931,472
--------------------------------------------- ----------- ------------
13,414,007 15,614,462
--------------------------------------------- ----------- ------------
Amounts due within one year are deposits with Group undertakings
of GBP82,098,447 (2021: GBP97,699,618) which are unsecured,
repayable within one year and earn a market rate of interest (based
on benchmark risk-free rate applicable to each currency minus
0.025%) that is consistent with the Group's policy.
Amounts due within one year also include the net proceeds of
bond issuances that have been advanced as loans to Group
undertakings of GBP642,028,398 (2021: GBP4,224,161,513) which are
unsecured with an interest rate of 0.361%.
Amounts due after more than one year include the net proceeds of
bond issuances that have been advanced as loans to Group
undertakings, which are unsecured with fixed interest charged
between 0.103% and 6.50% per annum and repayable at maturity dates
between 2023 and 2045.
Amounts due after more than one year also include a call account
with GlaxoSmithKline Finance plc of GBP115,236,714 (2021:
GBP81,724,873) which is unsecured, repayable on demand and earns a
market rate of interest (based on benchmark risk-free rate
applicable to each currency minus 0.05%) which is consistent with
the Group's policy. The call account balance is classified as a
non-current asset as the amounts are not expected to be settled
within the year.
7. Prepayments and accrued income
30 June 2022 31 December 2021
GBP'000 GBP'000
----------------------------- ------------- -----------------
Amounts due within one year 99,477 142,579
----------------------------- ------------- -----------------
Accrued income relates to interest on amounts owed by Group
undertakings (see Note 6).
8. Trade and other payables
30 June 2022 31 December 2021
GBP'000 GBP'000
------------------------------------- -------------- -----------------
Amounts falling due within one year
Amounts owed to Group undertakings - (4,196)
------------------------------------- -------------- -----------------
- (4,196)
---------------------------------------------------- -----------------
9. Borrowings
30 June 2022 31 December 2021
GBP'000 GBP'000
----------------------------------------- ------------- -----------------
Amounts falling due within one year
Loans payable:
EUR European Medium Term Notes (643,647) -
US$ Medium Term Notes - (2,595,811)
-----------------------------------------
(643,647) (2,595,811)
----------------------------------------- ------------- -----------------
Amounts falling due after more than one
year
Loans payable:
EUR European Medium Term Notes (4,452,638) (4,982,138)
GBP European Medium Term Notes (5,538,959) (5,537,026)
US$ Medium Term Notes (2,671,831) (2,398,661)
----------------------------------------- ------------- -----------------
(12,663,428) (12,917,825)
----------------------------------------- ------------- -----------------
Total borrowings (13,307,075) (15,513,636)
----------------------------------------- ------------- -----------------
30 June 2022 31 December 2021
Maturity of borrowings GBP'000 GBP'000
------------------------------------------------- ------------- -----------------
In one year or less, or on demand
2.850% US$ US Medium Term Note 2022 - (1,483,306)
2.875% US$ US Medium Term Note 2022 - (1,112,505)
0.125% EUR European Medium Term Note 2023 (643,647) -
(643,647) (2,595,811)
------------------------------------------------- ------------- -----------------
0% EUR European Medium Term Note 2023 (429,421) (419,963)
0.125% EUR European Medium Term Note 2023 - (629,193)
0.534% US$ US Medium Term Note 2023 (1,031,894) (926,473)
3.000% US$ US Medium Term Note 2024 (823,010) -
(2,284,325) (1,975,629)
------------------------------------------------- ------------- -----------------
1.000% EUR European Medium Term Note 2026 (600,115) (586,784)
1.250% EUR European Medium Term Note 2026 (856,660) (837,538)
1.375% EUR European Medium Term Note 2024 (855,705) (836,250)
3.000% US$ US Medium Term Note 2024 - (738,765)
4.000% EUR European Medium Term Note 2025 (641,446) (626,915)
(2,953,926) (3,626,252)
------------------------------------------------- ------------- -----------------
In more than five years
3.375% GBP European Medium Term Note 2027 (595,740) (595,392)
1.25% GBP European Medium Term Note 2028 (743,148) (742,631)
1.375% EUR European Medium Term Note 2029 (427,188) (417,642)
3.375% US$ US Medium Term Note 2029 (816,927) (733,423)
1.750% EUR European Medium Term Note 2030 (642,101) (627,853)
5.250% GBP European Medium Term Note 2033 (984,776) (984,305)
1.625% GBP European Medium Term Note 2035 (743,910) (743,701)
6.375% GBP European Medium Term Note 2039 (694,790) (694,705)
5.250% GBP European Medium Term Note 2042 (987,313) (987,136)
4.250% GBP European Medium Term Note 2045 (789,284) (789,156)
(7,425,177) (7,315,944)
Total borrowings (13,307,075) (15,513,636)
------------------------------------------------- ------------- -----------------
10. Accruals and deferred income
30 June 2022 31 December 2021
GBP'000 GBP'000
------------------------------------- ------------- -----------------
Amounts falling due within one year (90,492) (134,512)
------------------------------------- ------------- -----------------
Accruals relates to interest payable on borrowings (see Note
9).
11. Fair value of financial assets and liabilities
The fair values of the financial assets and liabilities are
included at the price that would be received to sell an asset or
paid to transfer a liability in an orderly transaction between
market participants at the measurement date.
The following methods and assumptions were used to estimate the
fair values:
-- Cash and cash equivalents - approximates to the carrying amount;
-- Borrowings (European and US Medium Term Notes) - based on
quoted market prices (a level 1 fair value measurement);
-- Intercompany loans - approximates to the fair value of
borrowings (European and US Medium Term Notes); and
-- Receivables and payables - approximates to the carrying amount.
The carrying amounts and the fair values of the Company's
financial assets and liabilities at 30 June 2022 and 31 December
2021 are illustrated below.
30 June 2022 31 December 2021
Carrying Carrying
value Fair value value Fair value
GBP'000 GBP'000 GBP'000 GBP'000
-------------------------------------- ------------- ------------- ------------- -------------
Cash and cash equivalents 1 1 4 4
Loans and receivables:
Other receivables 99,477 99,477 142,579 142,579
Amounts owed by Group undertakings 13,413,893 13,613,240 15,614,286 17,514,138
Total financial assets 13,513,371 13,712,718 15,756,869 17,656,721
-------------------------------------- ------------- ------------- ------------- -------------
Financial liabilities measured
at amortised cost:
GBP European Medium Term Notes (5,096,285) (5,986,902) (4,982,138) (7,310,534)
EUR European Medium Term Notes (5,538,959) (5,007,804) (5,537,026) (5,310,940)
US$ US Medium Term Notes (2,671,831) (2,618,534) (4,994,472) (5,127,133)
-------------------------------------- ------------- ------------- ------------- -------------
(13,307,075) (13,613,240) (15,513,636) (17,748,607)
Other payables (90,492) (90,492) (138,708) (138,708)
Total financial liabilities (13,397,567) (13,703,732) (15,652,344) (17,887,315)
-------------------------------------- ------------- ------------- ------------- -------------
Net financial assets 115,804 8,986 104,525 (230,594)
-------------------------------------- ------------- ------------- ------------- -------------
The Company has no financial assets or liabilities measured at
fair value through profit or loss.
Financial liabilities measured at amortised cost for which the
fair value of GBP13,613,240,000 (31 December 2021:
GBP17,748,607,000) as disclosed in the table above are categorised
as Level 1, where quoted prices in active markets are used.
Similarly, amounts owed by Group undertakings, which include the
net proceeds of bond issuances advanced as loans, also approximate
to the fair value of these financial liabilities. All other assets
and liabilities approximate to the carrying amount.
12. Adjustments reconciling operating profit to operating cash
flows
Period ended Period ended
30 June 2022 30 June 2021
GBP'000 GBP'000
----------------------------------------------- ------------------- --------------
Operating profit 9,448 8,254
Adjustments:
Decrease/ (increase) in other receivables 43,164 37,570
(Decrease) / increase in other payables (48,215) (42,648)
Exchange adjustments (573) 1,114
Amortisation of bond costs 7,313 5,407
Fair value movements on cash flow hedges - -
Reclassification of cash flow hedges to the
income statement 1,769 1,851
3,458 3,294
----------------------------------------------- ------------------- --------------
Net cash (outflow) / inflow from operating
activities 12,906 11,548
------------------------------------------------ ------------------- --------------
13. Called up share capital
30 June 31 December 30 June 31 December
2022 2021 2022 2021
Number Number of
of shares shares GBP'000 GBP'000
-------- ------------
Authorised
Ordinary shares of GBP1 each (31
December 2021: GBP1 each) 100,000 100,000 100 100
----------------------------------- ------------ -------- ------------
Issued and fully paid
Ordinary shares of GBP1 each (31
December 2021: GBP1 each) 100,000 100,000 100 100
----------------------------------- ----------- ------------ -------- ------------
14. Related party transactions
As a wholly owned subsidiary of the ultimate parent company, GSK
plc, advantage has been taken of the exemption afforded by FRS 101
"Reduced Disclosure Framework" not to disclose any related party
transactions within the Group. There are no other related party
transactions.
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