TIDMAG99
RNS Number : 4318F
GlaxoSmithKline Capital PLC
27 July 2016
Publication of GlaxoSmithKline Capital plc
Interim Management Report 2016
Today, 27 July 2016, GlaxoSmithKline Capital plc (the "Company")
published on the GlaxoSmithKline Group ("GSK") website, www.gsk.com,
its Interim Management Report in respect of the period ended 30
June 2016.
In compliance with Listing Rule 9.6.1 of the UK Financial Conduct
Authority ('FCA'), copies of Company's Interim Management Report,
have been submitted to the UK Listing Authority's National Storage
Mechanism and will shortly be available for inspection at
http:/www.morningstar.co.uk/UK/NSM.
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
27 July 2016
Cautionary statement regarding forward-looking statements
GSK and the Company cautions investors that any forward-looking
statements or projections made by GSK and the Company, 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 'Principal risks and uncertainties' in Appendix A of
this announcement and under 'Risk factors' in the 'Investor information"
section in the GSK Annual Report 2015 included as exhibit 15.2
to the GSK Annual Report on Form 20-F for 2015.
APPIX 1
GlaxoSmithKline Capital plc
(Registered number: 2258699)
Interim Management Report
for the half year ended 30 June 2016
Registered office address:
980 Great West Road
Brentford
Middlesex
TW8 9GS
GlaxoSmithKline Capital plc
Interim Management Report
for the half year ended 30 June 2016
Pages
Interim Report 1-2
Income statement 3
Statement of other comprehensive income 4
Statement of financial position 5
Statement of changes in equity 6
Cash flow statement 7
Notes to the financial statements 8-11
GlaxoSmithKline Capital plc
Registered number: (2258699)
Results announcement and interim management report for the half
year ended 30 June 2016
Performance
GlaxoSmithKline Capital plc (the "Company") is a member of the
GlaxoSmithKline Group of companies (the "Group") and issues notes
under the Group's European and US Medium Term Note programme and
provides financing and financial services to other Group entities.
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 2016
of GBP5,691,000 (2015: GBP4,061,000), 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 2016 (2015: GBPnil).
At 30 June 2016, the Company had in issue GBP7,775,675,000 Euro
Medium Term Notes and GBP2,995,433,000 US Medium Term Notes (2015:
GBP7,333,954,000 and GBP2,708,365,000 respectively) which mature
at dates between 2017 and 2045. All notes currently in issue pay
interest on a fixed rate basis.
Principal risks and uncertainties
The Directors of GlaxoSmithKline plc manage the risks of the Group
at a group level, rather than at an individual business unit 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 2015 Annual
Report and Second Quarter 2016 Results Announcement which do not
form part of this report
Details of the Company's Financial risk management is also disclosed
in the Company's Director's Report and Financial Statements for
the year ended 31 December 2015.
Going concern
After making certain enquiries, the Directors have a reasonable
expectation that the Company has adequate resources to continue
in operational existence for the foreseeable future. For this reason,
they continue to adopt the going concern basis in preparing this
document, due to ongoing support from the intermediate parent undertaking,
GlaxoSmithKline Finance plc.
Directors' responsibility statement
The Board of Directors approved this document on 27 July 2016.
The Directors confirm that to the best of their knowledge this
unaudited condensed financial information for the six months ended
30 June 2016 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.
GlaxoSmithKline Capital plc
Registered number: (2258699)
Results announcement and interim management report for the half
year ended 30 June 2016
The Directors of the Company are:
S P Dingemans
Edinburgh Pharmaceutical Industries Limited
Glaxo Group Limited
On behalf of the Board
A Walker
For and on behalf of Glaxo Group Limited
Corporate Director
27 July 2016
Internet
This Announcement and other information about the GSK Group are
available on the website at: http://www.gsk.com
GlaxoSmithKline Capital plc
Registered number: (2258699)
Income statement
for the half year ended 30 June 2016
Period ended Period ended
30 June
30 June 2016 2015
Note GBP'000 GBP'000
--------------------------------------
Other operating income 3 1,527 (353)
-------------------------------------- ----- ------------- -------------
Operating profit/(loss) 1,527 (353)
Finance income 4 196,314 205,468
Finance expense 5 (190,729) (199,964)
====================================== ===== ============= =============
Net finance income 5,585 5,504
Profit on ordinary activities before
taxation 7,112 5,151
Tax on profit on ordinary activities 6 (1,421) (1,090)
====================================== ===== ============= =============
Profit for the financial period 5,691 4,061
-------------------------------------- ----- ------------- -------------
GlaxoSmithKline Capital plc
Registered number: (2258699)
Statement of comprehensive income
for the half year ended 30 June 2016
Period
ended Period ended
30 June 30 June
2016 2015
Note GBP'000 GBP'000
Profit for the financial period 5,691 4,061
Items that may be subsequently reclassified
to the Income statement:
Reclassification of cash flow hedges
to the Income statement 477 477
====================================================== ======== =============
Other comprehensive income for the financial
period 477 477
====================================================== ======== =============
Total comprehensive income for the financial
period 6,168 4,538
------------------------------------------------------ -------- -------------
GlaxoSmithKline Capital plc
Registered number: (2258699)
Statement of financial position
As at 30 June 2016
Period ended Period ended
30 June 2016 30 June 2015
Note GBP'000 GBP'000
------------------------------------------ ----- ------------- -------------
Current assets
------------------------------------------ ----- ------------- -------------
Other receivables 7 10,909,932 10,166,218
- including GBP9,212,417,000 (2015:
GBP9,986,490,000)
due after more than one year
Cash and cash equivalents 2 2
------------------------------------------ ----- ------------- -------------
Total current assets 10,909,934 10,166,220
Creditors: amounts falling due within
one year 8 (1,614,897) (104,207)
------------------------------------------
Net current assets 9,295,037 10,062,013
------------------------------------------ ----- ------------- -------------
Total assets less current liabilities 9,295,037 10,062,013
------------------------------------------ ----- ------------- -------------
Creditors: amounts falling due after
more than one year 8 (9,269,175) (10,042,319)
------------------------------------------ ----- ------------- -------------
Net assets 25,862 19,694
------------------------------------------ ----- ------------- -------------
Capital and reserves
Called up share capital 100 100
Other reserves (9,437) (9,914)
Retained earnings 35,199 29,508
-----
Total shareholders' funds 25,862 19,694
------------------------------------------ ----- ------------- -------------
GlaxoSmithKline Capital plc
Registered number: (2258699)
Statement of changes in equity
for the half year ended 30 June 2016
Called
up Total
Share Other Retained shareholders'
capital reserves earnings funds
GBP'000 GBP'000 GBP'000 GBP'000
---------------------------------
At 1 January 2015 100 (10,435) 20,759 10,424
Profit for the financial period - - 4,061 4,061
Other comprehensive income for
the
financial period - 477 - 477
--------------------------------- --------- ---------- ---------- ---------------
At 30 June 2015 100 (9,958) 24,820 14,962
--------------------------------- --------- ---------- ---------- ---------------
Called
up Total
Share Other Retained shareholders'
capital reserves earnings funds
GBP'000 GBP'000 GBP'000 GBP'000
---------------------------------
At 1 January 2016 100 (9,914) 29,508 19,694
Profit for the financial period - - 5,691 5,691
Other comprehensive income for
the
financial period - 477 - 477
--------------------------------- --------- ---------- ---------- ---------------
At 30 June 2016 100 (9,437) 35,199 25,862
--------------------------------- --------- ---------- ---------- ---------------
GlaxoSmithKline Capital plc
Registered number: (2258699)
Cash flow statement
for the half year ended 30 June 2016
Period ended Period ended
30 June 2016 30 June 2015
Note GBP'000 GBP'000
-------------------------------------------- ----- ------------- -------------
Net cash inflow from operating activities 10 6,353 651,922
-------------------------------------------- ----- ------------- -------------
Cash flow from financing activities
Repayment of short-term loans - (648,232)
Decrease in loans with Group undertakings (6,354) (3,636)
-------------------------------------------- ----- ------------- -------------
Net cash outflow from financing activities (6,354) (651,868)
-------------------------------------------- ----- ------------- -------------
(Decrease)/increase in cash in the
period (1) 54
-------------------------------------------- ----- ------------- -------------
Cash at beginning of period 3 3
Decrease in cash (1) -
-------------------------------------------- ----- ------------- -------------
Cash at end of period 2 3
-------------------------------------------- ----- ------------- -------------
GlaxoSmithKline Capital plc
Registered number: (2258699)
Notes to the financial statements for the period ended 30 June 2016
1 Accounting presentation and policies
This unaudited Results Announcement containing condensed financial
information for the six months ended 30 June 2016 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.
2 First time application of FRS 100, 101 and FRS 104
Effective from 1 January 2015, the Company has adopted Financial
Reporting
Standard 100 "Application of Financial Reporting Requirements" ("FRS
100"), Financial Reporting Standard 101 "Reduced Disclosure Framework"
("FRS 101") and FRS 104 "Interim Financial Reporting". In previous
years, the financial statements and interim results announcements
were prepared in accordance with applicable UK accounting standards
and pronouncements on interim reporting issued by the Accounting
Standards
Board (ASB).
Under previous applicable UK accounting standards, the Company adopted
FRS 26 "Financial Instruments: Measurement" and the effect of this
was the revaluation of financial assets and liabilities to fair value,
including the valuation of derivative instruments at market rates.
Therefore, the change in the basis of preparation to FRS 100 and FRS
101 has not altered in any way the recognition and measurement
requirements
previously applied in accordance with applicable accounting standards.
Consequently the principal accounting policies set out in the Company's
audited Financial Statements 2015 are unchanged and have been
consistently
applied in the preparation of this Results Announcement.
This Results Announcement does not constitute statutory accounts of
the Company within the meaning of sections 434(3) and 435(3) of the
Companies Act 2006. The Statement of Financial Position as at 31
December
2015 has been derived from the full accounts published in the Financial
Statements 2015, which have been delivered to the Registrar of
Companies
and on which the report of the independent auditors was unqualified
and did not contain a statement under section 498 of the Companies
Act 2006.
3 Other operating income
Period ended Period ended
30 June 2016 30 June 2015
GBP'000 GBP'000
-------------------------------------- ------------- ------------------------------
Exchange gain/(loss) on foreign currency
transactions 1,527 (326)
Management fee - (27)
------------------ -------------------- ------------- ------------- ------------------------------
1,527 (353)
------------------ -------------------- ------------- ------------- ------------------------------
4 Finance income
Period ended Period ended
30 June 2016 30 June 2015
GBP'000 GBP'000
----------------- --- ------------- ------------- ------------------------------
On loans with Group undertakings 196,314 205,468
----------------------------------------------------------- ------------- ------------------------------
Total finance income 196,314 205,468
5 Finance expense
Period ended Period ended
30 June 2016 30 June 2015
GBP'000 GBP'000
----------------- --- ------------- ------------- ------------------------------
Interest expense arising on financial liabilities
at amortised cost (190,252) (199,487)
Reclassification of cash flow hedge from other
comprehensive income (477) (477)
----------------------------------------------------------- ------------- ------------------------------
Total finance expense (190,729) (199,964)
---------------------------------------- ------------- ------------- ------------------------------
GlaxoSmithKline Capital plc
Registered number: (2258699)
Notes to the financial statements for the period ended 30 June 2016
6 Tax on profit on ordinary activities
Period ended Period ended
30 June 2016 30 June 2015
Income tax expense on ordinary activities GBP'000 GBP'000
------------------------------------------ ------------- ------------------------------
Current tax:
UK corporation tax at 20% (2015:
20.25%) (1,421) (1,090)
Income tax expense on ordinary
activities (1,421) (1,090)
---------------------------------------- ------------- ------------- ------------------------------
7 Other receivables
31 December
30 June 2016 2015
GBP'000 GBP'000
-------------------------------------- ----------------- ------------------------------
Amounts due within one
year
Amounts owed by Group
undertakings 1,493,098 -
Amounts owed by Group undertakings
- loans 86,435 74,346
Amounts owed by Group undertakings - current
accounts 117,982 105,382
------------------------------------------------------- ----------------- ------------------------------
1,697,515 179,728
---------------------------------------- ------------- ----------------- ------------------------------
Amounts due after more
than one
year
Amounts owed by Group undertakings 9,210,241 9,984,314
Deferred tax 2,176 2,176
9,212,417 9,986,490
---------------------------------------- ------------- ----------------- ------------------------------
10,909,932 10,166,218
Amounts owed by Group undertakings include the net proceeds of bond
issuances that have been advanced as loans totalling GBP10,703,339,000
(2015: GBP9,984,314,000), which are unsecured with interest charged
at between 1.05% and 6.50% per annum and repayable at maturity dates
between 2017 and 2045. In addition, there are deposits with Group
undertakings totalling GBP86,435,000 (2015: GBP74,346,000), which
are unsecured, interest bearing and repayable on demand.
8 Creditors
31 December
30 June 2016 2015
GBP'000 GBP'000
-------------------------------------- ----------------- ------------------------------
Amounts falling due
within one year
Amounts owed to Group undertakings (21) (67)
Corporation tax (3,554) (2,133)
Loans payable:
US Medium Term Notes (1,501,933) -
Accruals and deferred income (109,389) (102,007)
------------------------------------------------------- ----------------- ------------------------------
(1,614,897) (104,207)
---------------------------------------- ------------- ----------------- ------------------------------
Amounts falling due
after more than
one year
Loans payable:
Euro Medium Term Notes (7,775,675) (7,333,954)
US Medium Term Notes (1,493,500) (2,708,365)
(9,269,175) (10,042,319)
---------------------------------------- ------------- ----------------- ------------------------------
(10,884,072) (10,146,526)
---------------------------------------- ------------- ----------------- ------------------------------
GlaxoSmithKline Capital plc
Registered number: (2258699)
Notes to the financial statements for the period ended 30 June 2016
Amounts owed to Group undertakings are unsecured and repayable on
demand.
The corporation tax creditor contains amounts which will be paid to
fellow Group companies.
Debt is unsecured and there are no debt covenants in relation thereto.
Accruals and deferred income relates to accrued interest payable on
US Medium Term Notes and Euro Medium Term Notes.
9 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 at bank - approximates to the carrying amount;
-- Short-term loans and overdrafts - approximates to the carrying
amount because of the short maturity of these instruments;
-- Medium-term loans - market value based on quoted market prices
in the case of US and Euro Medium Term Notes, intercompany
receivables;
and other fixed rate borrowings, approximates to the carrying value
in the case of floating rate bank loans and other loans; and
-- Receivables and payables - approximates to the carrying value.
There are no material differences between the carrying value of the
Company's other financial assets and liabilities and their estimated
fair value, with the exception of Bonds, for which the carrying values
and fair values are set out in the table below.
30 June 2016 31 December 2015
Carrying Carrying
value Fair value value Fair value
GBP'000 GBP'000 GBP'000 GBP'000
----------------- ----------------- ----------------- ------------- ---------------
Cash and cash
equivalent 2 2 2 2
Loans and
receivables:
Loans with Group
undertakings 10,703,339 12,794,093 9,984,314 11,180,812
Other
receivables 204,417 204,417 179,728 179,728
------------------- ----------------- ----------------- ------------- ---------------
Total financial
assets 10,907,758 12,998,512 10,164,044 11,360,542
------------------- ----------------- ----------------- ------------- ---------------
Financial
liabilities
measured
at amortised cost:
GBP Euro Medium
Term
Notes (4,049,116) (5,596,191) (4,047,820) (4,895,199)
EUR Euro Medium
Term
Notes (3,726,559) (4,105,992) (3,286,134) (3,549,695)
US$ US Medium
Term Notes (2,995,433) (3,091,910) (2,708,365) (2,735,918)
Other payables (109,410) (109,410) (102,074) (102,074)
------------------ ---------------- ----------------- ----------------- ------------- ---------------
Total financial
liabilities (10,880,518) (12,903,503) (10,144,393) (11,282,886)
------------------ ---------------- ----------------- ----------------- ------------- ---------------
Net financial
assets and
liabilities 27,240 95,009 19,651 77,656
------------------- ----------------- ----------------- ------------- ---------------
The total financial liabilities and assets of GBP12,794,093,000 (2015:
GBP11,180,812,000) for which the fair value is disclosed in the table
above are categorised as Level 1, where quoted prices in active markets
are used. All other assets and liabilities for which fair value is
disclosed in the table above are categorised as Level 3, where one
or more of the significant inputs to the valuation model is not based
on observable market data.
GlaxoSmithKline Capital plc
Registered number: (2258699)
Notes to the financial statements for the period ended 30 June 2016
Reconciliation of operating profit to net cash inflow from operating
10 activities
Period ended Period ended
30 June 30 June
2016 2015
GBP'000 GBP'000
------------------- ----------------- ----------------- ------------- ---------------
Operating profit 1,527 (353)
Exchange movements (1,527) 547
Movements in
working capital:
Decrease in
debtors - (201)
Decrease in
creditors (46) -
Interest paid (177,324) (175,706)
Interest
received 183,723 182,669
Loan repayments received from Group undertakings - 644,966
------------------------------------------------------- ----------------- ------------- ---------------
Net cash inflow from operating activities 6,353 651,922
-------------------------------------------------------------------------- ------------- ---------------
Related party
11 transactions
As a wholly owned subsidiary of the ultimate parent company, GlaxoSmithKline
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.
This information is provided by RNS
The company news service from the London Stock Exchange
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