24th June 2021
Some interesting stats from the Royal Family annual accounts for the year to March 2021:
- The Queen received £86m from the taxpayer
- She performed 113 official engagements, down 62% on the year before
- 8.5% of the Royal Household staff are from ethnic minorities, its 2022 target is 10%
- Crunch time at GSK
- Taxman to take it easy on Covid hit businesses
Yesterday's market moves
FTSE 100 -0.2% 7,074
FTSE 250 -0.1% 22,660
Markets drifted lower, as investors remain preoccupied with signs of rising inflation and ponder possible central banks’ responses to it.
Travel and leisure stocks were boosted by newspaper reports that fully vaccinated Brits could enjoy quarantine-free holidays from as early as July 19.
Crunch time at GSK
What’s going on?
British pharmaceutical giant GlaxoSmithKline (GSK), set out a 10 year plan to deliver a “step change” in growth following mounting pressure from shareholders over its recent performance.
Why is this important?
GSK is one of the world’s biggest drugs companies making a wide range of prescription medicines, vaccines and consumer healthcare products like Aquafresh, Sensodyne and Panadol.
But in recent times its lagged behind rivals like AstraZeneca and Pfizer in its sales and revenue growth. On top of that it still doesn’t have a Covid vaccine on the market. All of this has led shareholders to call for a shake up at the company.
In response GSK announced it will:
- Turn its consumer healthcare arm into a separately listed company next year. This will deliver a £8bn windfall and other financial benefits for its underperforming medicines and vaccines business aka “New GSK”.
- Raise revenue at New GSK to £33bn by 2031 – almost what the total group (including consumer healthcare) achieved in 2020.
- Target high-single-digit percentage growth in vaccines and double-digit growth for specialist medicines over the next five years.
Good research and development (R&D) is crucial to the success of a pharmaceutical business but GSK has had more misses than hits in this area over the past few years.
GSK hopes that by separating its consumer healthcare division from its vaccines and medicine division it can throw more weight behind getting better results in R&D.
It’s also still optimistic that it can join the Covid vaccine race with results of its work with French company Sanofi expected in the coming months.
The market seemed reasonably positive about GSK’s plans, shares closed up 1% yesterday.
Taxman to take it easy on Covid hit businesses
Getting on the wrong side of HMRC is not a good place to be for any business. But those who have struggled during the pandemic have raised concerns that owing money to the taxman is an extra burden they can do without.
In response the government has reassured companies that HMRC will “take a cautious” approach when it comes to collecting overdue taxes.
During Covid many businesses also racked up debts to the taxman as a result of loans and support schemes offered by the government.
The retail and leisure sector were particularly concerned over mounting debts especially as restrictions remain in place and customer numbers are still recovering.
The government said that it would only take a tough stance on debt enforcement if companies failed to engage with HMRC rather than simply because they could not afford to pay.
It said it would only but companies out of business as a last resort.
Much of the government support is due to wind down in the coming months. Which could spell even tougher times for businesses if trading doesn’t recover post lockdown.
Stat of the day
Brits spent 23 minutes less time sleeping and 18 minutes more time working a year into lockdown than before the pandemic
Other stories to keep you in the loop
- UK employees work £4.2bn in unpaid overtime every week
- Krispy Kreme lines up $4bn IPO
- Lego plans to sell bricks from recycled bottles
- Morgan Stanley to bar unvaccinated employees and clients from offices
- Microsoft joins Apple in exclusive $2 trillion club
- Anti-virus creator, McAfee, found dead in prison cell