TIDMAG99
RNS Number : 9141V
GlaxoSmithKline Capital PLC
26 July 2018
Publication of GlaxoSmithKline Capital plc
Interim Management Report 2018
Today, 26 July 2018, 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 2018.
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
26 July 2018
*
https://www.gsk.com/en-gb/about-us/policies-codes-and-standards/other-reports
Cautionary statement regarding forward-looking statements
GSK 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
Principal risks and uncertainties in the company's Annual Report on
Form 20-F for 2017.
APPIX A
GlaxoSmithKline Capital plc
(Registered number: 2258699)
Interim Management Report
for the half year ended 30 June 2018
Registered office address:
980 Great West Road
Brentford
Middlesex
TW8 9GS
GlaxoSmithKline Capital plc
(Registered number: 2258699)
Interim Management Report
for the half year ended 30 June 2018
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 8-12
GlaxoSmithKline Capital plc
Results announcement and interim management report for the half
year ended 30 June 2018
Performance
GlaxoSmithKline Capital plc (the "Company") is a member of the
GlaxoSmithKline 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.
Review of business
The Company made a profit for the half year ended 30 June 2018
of GBP16,814,000 (2017: GBP4,055,000), 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 2018 (2017: GBPnil).
At 30 June 2018, the Company had in issue GBP11,224,361,000 European
Medium Term Notes and GBP3,016,815,000 US Medium Term Notes (31
December 2017: GBP9,026,788,000 and GBP1,473,973,000, respectively),
which mature at dates between 2019 and 2045. All notes currently
in issue pay interest on a fixed rate basis, with the exception
of the EUR750 million (GBP656 million) 2020 European Medium Term
Note and $750 million (GBP554 million) 2021 US Medium Term Note
which are on a floating 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 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 2017 Annual Report which does not form part of this report.
Details of the Company's financial risk management is also disclosed
in the Company's Annual Report for the year ended 31 December
2017.
Directors' responsibility statement
The Board of Directors approved this document on 24 July 2018.
The Directors confirm that to the best of their knowledge this
unaudited condensed financial information for the six months ended
30 June 2018 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.
The Directors of the Company are:
Mr S Dingemans
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
24 July 2018
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 2018
Period ended Period ended
30 June
30 June 2018 2017
Note GBP'000 GBP'000
--------------------------------------
Other operating income / (expense) 214 (511)
Finance income 3 172,296 196,552
Finance expense 4 (151,712) (191,019)
====================================== ===== ============= =============
Operating profit 2 20,798 5,022
====================================== ===== ============= =============
Profit before taxation 20,798 5,022
====================================== ===== ============= =============
Tax on profit 5 (3,984) (967)
====================================== ===== ============= =============
Profit for the financial period 16,814 4,055
-------------------------------------- ----- ------------- -------------
GlaxoSmithKline Capital plc
Statement of comprehensive income
for the half year ended 30 June 2018
Period Period
ended ended
30 June 30 June
2018 2017
GBP'000 GBP'000
Profit for the financial period 16,814 4,055
Items that may be subsequently reclassified to
the income statement:
Fair value movements on cash flow hedges 1,288 -
Reclassification of cash flow hedges
to the income statement 731 477
Deferred tax on cash flow hedges (124) (81)
================================================= ======== ========
Other comprehensive income for the financial
period 1,895 396
================================================= ======== ========
Total comprehensive income for the financial
period 18,709 4,451
------------------------------------------------- -------- --------
GlaxoSmithKline Capital plc
Statement of financial position
As at 30 June 2018
31 December
30 June 2018 2017
Note GBP'000 GBP'000
--------------------------------------- ----- ------------- -------------
Non-current assets
Deferred tax assets 2,249 2,373
Loans and receivables 6 14,181,660 10,434,878
--------------------------------------- ----- ------------- -------------
Total non-current assets 14,183,909 10,437,251
--------------------------------------- ----- ------------- -------------
Current assets
Loans and receivables 6 107,785 101,855
Prepayments and accrued income 7 104,516 107,833
Cash and cash equivalents 1 1
--------------------------------------- ----- ------------- -------------
Total current assets 212,302 209,689
--------------------------------------- ----- ------------- -------------
Total assets 14,396,211 10,646,940
---------------------------------------
Current liabilities
Other payables 8 (5,966) (4,864)
Accruals and deferred income 10 (92,725) (103,680)
--------------------------------------- ----- ------------- -------------
Total current liabilities (98,691) (108,544)
--------------------------------------- ----- ------------- -------------
Net current assets 113,611 101,145
--------------------------------------- ----- ------------- -------------
Total assets less current liabilities 14,297,520 110,538,396
--------------------------------------- ----- ------------- -------------
Non-current liabilities
Long-term borrowings 9 (14,241,176) (10,500,761)
--------------------------------------- ----- ------------- -------------
Total non-current liabilities (14,241,176) (10,500,761)
--------------------------------------- ----- ------------- -------------
Total liabilities (14,339,867) (10,609,305)
Net assets 56,344 37,635
--------------------------------------- ----- ------------- -------------
Equity
Called up share capital 13 100 100
Other reserves (9,693) (11,588)
Retained earnings 65,937 49,123
-----
Total equity 56,344 37,635
--------------------------------------- ----- ------------- -------------
GlaxoSmithKline Capital plc
Statement of changes in equity
for the half year ended 30 June 2018
Called
up
share Other Retained
capital reserves earnings Total equity
GBP'000 GBP'000 GBP'000 GBP'000
---------------------------------
At 1 January 2017 100 (9,243) 40,805 31,662
Profit for the financial period - - 4,055 4,055
Other comprehensive income for
the
financial period - 396 - 396
--------------------------------- --------- ---------- ---------- -------------
At 30 June 2017 100 (8,847) 44,860 36,113
--------------------------------- --------- ---------- ---------- -------------
Called
up
share Other Retained
capital reserves earnings Total equity
GBP'000 GBP'000 GBP'000 GBP'000
---------------------------------
At 1 January 2018 100 (11,588) 49,123 37,635
Profit for the financial period - - 16,814 16,814
Other comprehensive income for
the
financial period - 1,895 - 1,895
--------------------------------- --------- ---------- ---------- -------------
At 30 June 2018 100 (9,693) 65,937 56,344
--------------------------------- --------- ---------- ---------- -------------
GlaxoSmithKline Capital plc
Cash flow statement
for the half year ended 30 June 2018
Period ended Period ended
30 June 2018 30 June 2017
Note GBP'000 GBP'000
-------------------------------------------- ----- ------------- -------------
Cash flows from operating activities
Operating profit 20,798 5,022
Adjustments reconciling operating profit
to
operating cash flows 12 (20,852) (312)
-------------------------------------------- ----- ------------- -------------
Net cash (outflow) / inflow from operating
activities (54) 4,710
-------------------------------------------- ----- ------------- -------------
Cash flows from financing activities
Proceeds from borrowings 3,650,522 -
Repayment of borrowings - (1,543,721)
Loans provided to Group undertakings (3,648,326) -
Loan repayments received from Group
undertakings - 1,532,776
(Increase) / decrease in current accounts
with Group undertakings (2,142) 6,235
-------------------------------------------- ----- ------------- -------------
Net cash inflow / (outflow) from financing
activities 54 (4,710)
-------------------------------------------- ----- ------------- -------------
Net movement in cash in the period - -
-------------------------------------------- ----- ------------- -------------
Cash at beginning of period 1 2
Movement in cash - -
-------------------------------------------- ----- ------------- -------------
Cash at end of period 1 2
-------------------------------------------- ----- ------------- -------------
GlaxoSmithKline Capital plc
Notes to the financial statements for the half year ended 30 June
2018
1 Accounting presentation and policies
This unaudited Results Announcement containing condensed financial
information for the six months ended 30 June 2018 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 Operating profit
Period ended Period ended
30 June
30 June 2018 2017
GBP'000 GBP'000
----------------------------------------------- ------------- --------------------------------------
The following items have been credited /
(charged)
in operating profit:
Exchange gains on foreign currency
transactions 214 (511)
------------------------------------- ------------- ------------- --------------------------------------
3 Finance income
Period ended Period ended
30 June
30 June 2018 2017
GBP'000 GBP'000
-------------------------- --- ------------- ------------- --------------------------------------
Interest income arising from loans with Group
undertakings 172,296 196,552
4 Finance expense
Period ended Period ended
30 June
30 June 2018 2017
GBP'000 GBP'000
-------------------------- --- ------------- ------------- --------------------------------------
Interest expense arising on financial liabilities
at amortised cost (150,981) (190,542)
Reclassification of cash flow hedge from other
comprehensive income (731) (477)
---------------------------------------------------- ------------- --------------------------------------
Total finance expense (151,712) (191,019)
------------------------------------- ------------- ------------- --------------------------------------
5 Tax on profit
Period ended Period ended
30 June
30 June 2018 2017
Income tax expense on ordinary activities GBP'000 GBP'000
----------------------------------------------- ------------- --------------------------------------
Current tax:
UK corporation tax at 19.25%
(2017:
19.25%) (3,984) (967)
Total current tax (3,984) (967)
------------------------------------- ------------- ------------- --------------------------------------
6 Loans and receivables
31 December
30 June 2018 2017
GBP'000 GBP'000
----------------------------------------------- ------------- --------------------------------------
Amounts due within one year
Amounts owed by Group undertakings - current
accounts 107,785 101,855
---------------------------------------------------- ------------- --------------------------------------
107,785 101,855
------------------------------------- ------------- ------------- --------------------------------------
Loans and receivables
6 (continued)
31 December
30 June 2018 2017
GBP'000 GBP'000
-------------------------------- ------------- ------------- --------------------------------------
Amounts due after more than one
year
Amounts owed by Group undertakings
- loans 14,181,660 10,434,878
14,181,660 10,434,878
------------------------------------- ------------- ------------- --------------------------------------
14,289,445 10,536,733
Amounts due within one year are call accounts with Group undertakings
of GBP47,840,000 (2017: GBP45,025,000) which are unsecured, repayable
on demand and earn a market rate of interest (based on 1 week LIBOR
minus 0.125%) that is consistent with the Group's policy and includes
deposits with Group undertakings of GBP59,945,000 (2017: GBP56,830,000)
which are unsecured, repayable on demand and earn a market rate of
interest (based on LIBOR minus 0.125%) that is consistent with the
Group's policy.
Amounts due after more than one year are the net proceeds of bond
issuances that have been advanced as loans to Group undertakings,
which are unsecured with fixed interest charged between 0.21% and
6.50% per annum and floating interest charged between LIBOR plus 20bps
to 56bps and repayable at maturity dates between 2019 and 2045.
7 Prepayments and accrued income
31 December
30 June 2018 2017
GBP'000 GBP'000
----------------------------------------------- ------------- --------------------------------------
Amounts due within one year 104,516 107,833
------------------------------------- ------------- ------------- --------------------------------------
Accrued income relates to interest on amounts owed by Group undertakings
(see Note 6).
8 Other payables
31 December
30 June 2018 2017
GBP'000 GBP'000
----------------------------------------------- ------------- --------------------------------------
Amounts falling due within one
year
Amounts owed to Group undertakings - (2,881)
Corporation tax (5,966) (1,983)
---------------------------------------------------- ------------- --------------------------------------
(5,966) (4,864)
------------------------------------- ------------- ------------- --------------------------------------
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 under Group relief.
9 Borrowings
31 December
30 June 2018 2017
GBP'000 GBP'000
----------------------------------------------- ------------- --------------------------------------
Amounts falling due within one
year
Loans payable:
EUR European Medium Term Notes (7,181,696) (4,973,782)
GBP European Medium Term Notes (4,042,665 (4,053,006)
US$ Medium Term Notes (3,016,815) (1,473,973)
---------------------------------------------------- ------------- --------------------------------------
(14,241,176) (10,500,761)
------------------------------------- ------------- ------------- --------------------------------------
31 December
30 June 2018 2017
Maturity of borrowings GBP'000 GBP'000
-------------------------------- ------------- ------------- --------------------------------------
In more than one year, but not
more
than two years
0.625% EUR European Medium Term
Note 2019 (1,324,563) (1,323,623)
LIBOR + 20bps EUR European
Medium
Term Note 2020 (665,819) -
-------------------------------- ------------- ------------- --------------------------------------
(1,990,382) (1,323,623)
------------------------------------- ------------- ------------- --------------------------------------
In more than two years, but not more than
five years
0.000% EUR European Medium Term
Note 2020 (1,059,826) (1,059,379)
LIBOR + 35bps US$ US Medium
Term
Note 2021 (566,821) -
3.125% US$ Medium Term Note
2021 (942,252) -
2.850% US$ Medium Term Note 2022 (1,507,742) (1,473,973)
------------------------------------- ------------- ------------- --------------------------------------
(4,076,641) (2,533,352)
------------------------------------- ------------- ------------- --------------------------------------
In more than five years
1.375% EUR European Medium Term
Note 2024 (876,527) (876,117)
4.000% EUR European Medium Term
Note 2025 (657,660) (658,647)
1.000% EUR European Medium Term
Note 2026 (617,292) (617,178)
1.350% EUR European Medium Term (880,423) -
Note 2026
3.375% GBP European Medium Term
Note 2027 (593,037) (593,400)
1.375% EUR European Medium Term
Note 2029 (438,964) (438,838)
1.750% EUR European Medium Term (660,623) -
Note 2030
5.250% GBP European Medium Term
Note 2033 (981,316) (986,476)
6.375% GBP European Medium Term
Note 2039 (693,911) (695,330)
5.250% GBP European Medium Term
Note 2042 (986,065) (988,603)
4.250% GBP European Medium Term
Note 2045 (788,335) (789,197)
------------------------------------- ------------- ------------- --------------------------------------
(8,174,153) (6,643,786)
------------------------------------- ------------- ------------- --------------------------------------
Total borrowings (14,241,176) (10,500,761)
------------------------------------- ------------- ------------- --------------------------------------
10 Accruals and deferred income
31 December
30 June 2018 2017
GBP'000 GBP'000
-------------------------------- ------------- ------------- --------------------------------------
Amounts falling due within one year (92,725) (103,680)
------------------------------------- ------------- ------------- --------------------------------------
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 2018 and 31 December 2017 are illustrated
below.
30 June 2018 31 December 2017
Carrying Carrying
value Fair value value Fair value
GBP'000 GBP'000 GBP'000 GBP'000
-------------------------- ----------------- ------------- ------------- -----------------------
Cash and cash equivalents 1 1 1 1
Loans and receivables:
Other receivables 104,516 104,516 107,833 107,833
Amounts owed by Group
undertakings
-
current accounts 107,785 107,785 101,855 101,855
Amounts owed by Group
undertakings
- loans 14,181,660 15,891,483 10,434,878 12,413,202
Total financial assets 14,393,962 16,103,785 10,644,567 12,622,891
---------------------------- ----------------- ------------- ------------- -----------------------
Financial liabilities measured at amortised
cost:
GBP European Medium Term
Notes (4,042,665) (5,427,306) (4,053,006) (5,688,556)
EUR European Medium Term
Notes (7,181,696) (7,454,757) (4,973,782) (5,221,979)
US$ US Medium Term Notes (3,016,815) (3,009,420) (1,473,973) (1,502,667)
--------------------------- ---- ----------------- ------------- ------------- -----------------------
(14,241,176) (15,891,483) (10,500,761) (12,413,202)
Other payables (92,725) (92,725) (106,561) (106,561)
Total financial
liabilities (14,333,901) (15,984,208) (10,607,322) (12,519,763)
--------------------------- ---- ----------------- ------------- ------------- -----------------------
Net financial assets and
liabilities 60,061 119,577 37,245 103,128
---------------------------- ----------------- ------------- ------------- -----------------------
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 GBP15,891,483,000 (31 December 2017: GBP12,413,202,000) 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 are approximate to the carrying amount.
12 Adjustments reconciling operating profit to operating cash flows
Period
Period ended ended
30 June 30 June
2018 2017
GBP'000 GBP'000
---------------------------- ----------------- ------------- ------------- -----------------------
Operating profit 20,798 5,022
Adjustments:
Decrease / (increase) in
other
receivables 3,317 (6,441)
(Decrease) in other
payables (13,836) (199)
Exchange adjustments (3,565) 511
Amortisation of bond costs (8,787) 5,340
Fair value movements on cash flow hedges 1,288 -
Reclassification of cash flow hedges to
the income statement 731 477
---------------------------------------------------- ------------- ------------- -----------------------
-
(22,852) (312)
---------------------------------------------------- ------------- ------------- -----------------------
Net cash (outflow) / inflow from operating activities (54) 4,710
------------------------------------------------------------------- ------------- -----------------------
13 Called up share capital
31 December 30 June 31 December
30 June 2018 2017 2018 2017
Number
Number of of
shares shares GBP'000 GBP'000
-------------------------- ----------------- ------------- ------------- -----------------------
Authorised
Ordinary shares of GBP1
each
(31 December 2017: GBP1
each) 100,000 100,000 100 100
---------------------------- ----------------- ------------- ------------- -----------------------
Issued and fully paid
Ordinary shares of GBP1
each
(31 December 2017: GBP1
each) 100,000 100,000 100 100
---------------------------- ----------------- ------------- ------------- -----------------------
14 Related party 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 news service of the
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END
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