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GSK Consumer surmounts 2017 headwinds, but struggles remain

The principal activities of the company are manufacturing, marketing and distribution of consumer healthcare and pharmaceutical products.



GSK Consumer Nigeria has risen above the turbulent 2017, which saw its bottom line dip sharply. While its performance may beat last year, it remains weak, especially in consumer healthcare.

About the firm

GlaxoSmithKline Consumer Nigeria Plc was incorporated on June 23, 1971. 46.1% of its issued shares are held by GlaxoSmithKline United Kingdom and the rest by Nigerian shareholders.

The principal activities of the company are manufacturing, marketing and distribution of consumer healthcare and pharmaceutical products.

Recent results

Results for the nine months ended September 30, 2018, show that revenue increased from N11.4 billion in 2017 to N13.9 billion in 2018. Profit before tax stood at N507 million, as against a loss before tax of N651 million in 2018. Profit after tax stood at N351 million in 2018, compared to a loss after tax of N651 million in 2017.


Current Share Price: N13.25
Year High: N34.85
Year Low: N11
Year to Date: -38.69%
One Year Return: -30.63%

Price Outlook

Possibilities of the stock rising sharply are quite low. Market sentiments as a whole, are currently negative. The stock is currently trading 20% above its year low of N11.

Price Valuation

GSK Consumer is currently trading at 10.6 times earnings, slightly higher than the average price earnings ratio on the Nigerian Stock Exchange (NSE). The stock is currently trading at a much higher PE than other listed players, such as Fidson Healthcare which is trading at 6.90 times earnings.

Company Outlook

2018 has been a difficult year for manufacturers in the country. Economic growth has remained sluggish, and consumer spending is also weak.

GSK had a difficult 2017 largely due to a sharp rise in costs. Costs have largely been contained this year.

The Consumer Healthcare segment consisting of oral care products, over-the-counter (OTC) medicines and nutritional healthcare products, however, continues to struggle. The unit made a N701 million loss in 2017 and a N126 million loss, as at Q3 2018.

Full year performance while likely to trend higher than 2017, would be one of the company’s weakest in the last five years.

The company paid an ordinary dividend of N0.40 per share last year and a special dividend of ₦7.10 per share.

Q3 2018 earnings per share stood at N0.29, an indication that it may be able to meet last year’s ordinary dividend payment.

Onome Ohwovoriole has a degree in Economics and Statistics from the University of Benin and prior to joining Nairametrics in December 2016 as Lead Analyst had stints in Publishing, Automobile Services, Entertainment and Leadership Training.He covers companies in the Nigerian corporate space, especially those listed on the Nigerian Stock Exchange (NSE).He also has a keen interest in new frontiers like Cryptocurrencies and Fintech. In his spare time, he loves to read books on finance, fiction as well as keep up with happenings in the world of international diplomacy.You can contact him via [email protected]

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