GlaxoSmithKline Plc (LON: GSK)

Business Overview
GlaxoSmithKline Plc is a healthcare company, which focuses on the manufacturing, commercialisation, and development of pharmaceuticals vaccines and consumer healthcare products. The company offers over the counter (OTC) products for pain, relief, nutrition, skin health, oral health, and gastrointestinal disorders.

Recent News
On 11^th February 2020, the company announced that it had transferred 25,800,000 ordinary shares of 25 pence each that were held by the company in treasury ("Treasury Shares") to JPMorgan Chase Bank.

Financial Highlights- Financial year 2019 (31^st December 2019, GBP, million)

(Source: Interim Report, Company Website)

During the financial year 2019, the company’s turnover was GBP 33,754 million, up by 10 per cent, as compared to GBP 30,821 million in the fiscal year 2018. Total operating profit increased by 27 per cent to GBP 6,961 million during the period as compared to GBP 5,483 million in the same period last year. In the FY2019, total earnings per share grew by 27 per cent to 93.9p against 73.7p in the FY2018. Adjusted operating profit during the period was GBP 8,972 million while adjusted earnings per share was 123.9p in the fiscal year 2019. In the fiscal year 2019, free cash flow with the company was GBP 5,073 million.

Share Price Performance

Daily Chart as on 12^thFebruary 2020, before the market closed (Source: Thomson Reuters)

On February 12^th, 2020, GlaxoSmithKline Plc shares were trading at GBX 1,693.60 at the time of writing before the market close (at 12:55 PM GMT), down by 0.60 per cent against the last day closing price. Stock's 52 weeks High and Low are GBX 1,857/GBX 1,485.20. The stock price has given10.12 per cent returns during the previous year. In the last three month the stock price has given negative 2.07 per cent returns.

Conclusion
During the fiscal year 2019, the company has reported a decent financial performance. Its business segments have performed well during the fiscal year 2019. On a CER basis, the company’s adjusted EPS was flat in 2019. In the financial year 2020, the company anticipate a reduction in adjusted EPS in the range of 1-4 per cent at CER basis. The Group’s business could have a negative impact from the Coronavirus outbreak. The company’s new guidance reflects operating performance in the financial year 2019, a lower anticipated effective tax rate for the year, and increased investment in R&D and priority assets. In the FY2019 the company maintained the dividend per share at the existing level of 80 pence. In the financial year 2019, the company had made further good progress, with sales growth across all three segments. In the current period, the company has maintained to reinforce the pipeline and have advanced assets in Respiratory, HIV and, Oncology. The company has raised its earnings, with strength in its consumer health and vaccines business offsetting weakness in its pharmaceutical’s unit caused by the launch of a generic rival to its asthma treatment Advair. With the completion of the new Consumer Healthcare Joint Venture with Pfizer, GlaxoSmithKline has attained a substantial milestone and to build a new world prominent consumer healthcare business.


Therefore, based on the above rationale, we have given a “Hold” recommendation at the current price of GBX 1,690.40 (as on 12th February 2020, before the market close at 1:02 PM GMT).
 

Porvair Plc (LON: PRV)

Business Overview
Porvair Plc operates in the business of design and manufacturing of filtration and separation equipment. Its operational segment divided into two segments Metal Filtration and Microfiltration. Since February 1992, its shares were listed on the main market segment of the London Stock Exchange. The outstanding market capitalization of the Group stood at £335.11m, which ranks it among the small cap stocks listed and traded on the London Stock Exchange.

Recent News
On 3^rd February 2020, the company announced that Senior Non-Executive Director and Chair of the Audit Committee, Paul Dean, had resigned from the company and Sally Martin would take his place as the Senior Non-Executive Director and Jasi Hali would chair the Audit Committee.

Financial Highlights- Financial Year 2019 (30^th November 2019, GBP, million)

(Source: Interim Report, Company Website)

On 3^rd February 2020, the company announced its final results for the year 2019. The company’s revenue grew by 13 per cent to GBP 144.9 million in the fiscal year 2019 as compared to GBP 128.8 million in the fiscal year 2018 due to strong performance in aerospace and industrial segment. Operating profit increased by 15 per cent to GBP 14.8 million in the fiscal year 2019 against GBP 12.9 million in FY2018. Profit before tax in fiscal year 2019 stood at GBP 14 million, an increase of 16 percent, versus GBP 12 million in FY2018. Earnings per share has increased by 7 per cent to 23.6p as compared to 22.1p in the fiscal year 2018.

Share Price Performance

Daily Chart as on 12^thFebruary 2020, before the market closed (Source: Thomson Reuters)

On February 12^th, 2020, Porvair Plc shares were trading at GBX 736.84 at the time of writing before the market close (at 12:52 PM GMT), up by 0.94 per cent against the last day closing price. Stock's 52 weeks High and Low are GBX 796.47/GBX 462. The stock price has given53.98 per cent returns during the previous year. In the last week, the stock price has given negative 1.49 per cent returns.

Valuation Methodology

*Peers: Judges Scientific Plc, Troax Group AB, Tornos Holdings AG and Groupe Gorge SA

Conclusion
During the fiscal year 2019, the company has witnessed a decent financial performance. Its segments have grown during the year and the Group witnessed operational improvements. The company expected same growth momentum to be carried in year 2020. The Group’s fundamentals are robust. The company is well positioned to benefit from growth in analytical science and the replacement of plastic by aluminium. The company has a healthy order book. However, there are risks and uncertainties associated with the business of the company. Uncertain tariffs and trade war lead to International trade risk, which could affect the revenue and profitability of the company. The Group operate in a competitive industry, which could impact the profitability of the Group. Fluctuation in foreign exchange rates could affect the profitability of the company. Failure in cybersecurity and a critical data breach could hamper the operation as well as the reputation of Porvair.

Based on the valuation and factors as highlighted above, we recommend investors to keep a “Watch” on the stock at the current price of GBX 756 (as on 12th February 2020 before the market close at 1:57 PM GMT), with support from few catalysts needs to be evaluated at a later stage. 

*All forecasted figures and information have been taken from Thomson Reuters

Disclaimer

PLEASE BE ADVISED THAT YOUR CONTINUED USE OF THIS SITE OR THE INFORMATION PROVIDED HEREIN SHALL INDICATE YOUR CONSENT AND AGREEMENT TO THESE TERMS.
References to ‘Kalkine’, ‘we’, ‘our’ and ‘us’ refer to Kalkine Limited.
This website is a service of Kalkine Limited. Kalkine Limited is a private limited company, incorporated in England and Wales with registration number 07903332.
The article has been prepared for informational purposes only and is not intended to be used as a complete source of information on any particular company. Kalkine is not responsible for material posted on this website and does not guarantee the content, accuracy, or use of the content in this site. No advice or information, whether oral or written, obtained by you from Kalkine or through or from the service shall create any warranty not expressly stated.
Kalkine do not offer financial advice based upon your personal financial situation or goals, and we shall NOT be held liable for any investment or trading losses you may incur by using the opinions expressed in our publications, market updates, news alerts and corporate profiles. Kalkine does not in any way endorse or recommend individuals, products or services that may be discussed on this site. You should discuss your portfolios and the risk tolerance level appropriate for your personal financial situation, with a professional licensed financial planner and adviser.