GlaxoSmithKline sees profits soar on weakness of the pound

GlaxoSmithKline (GSK) saw profits soar after the pharmaceutical giant was buoyed by the weakness of the pound following the UK's Brexit vote.

Its third quarter pre-tax profit beat forecasts as it jumped 47% to £1.27bn compared to a year ago, as Glaxo – which sells in more than 150 markets – generates most of its sales in other currencies.

Since the UK's vote to leave the European Union, on 23 June, the pound has fallen around 17% against the US dollar and around 20% against the euro.

GSK added that demand for new medicines was growing steadily, helping offset falling sales of its ageing blockbuster Advair, which faces increased competition in the respiratory market.

It said sales from its pharmaceuticals unit grew 6% to £4.1bn, its vaccines unit lifted 20% to £1.6bn, while its consumer healthcare business rose 5% to £1.9bn.

The drug giant is in the middle of a handover that will see consumer health-boss Emma Walmsley takeover as chief executive from Sir Andrew Witty in 2017.

The group added that if the pound maintained a weaker level into the final quarter of the year, its sterling earnings will be 21% higher this year.

Witty said: "Our third quarter results reflect strong performances across the Group and the sustained progress we have made over the course of 2016 to deliver sales growth of new products, maintain effective cost control and execute on our restructuring and integration plans."

Trinity Delta analyst Mick Cooper said: "These results demonstrate how the pharma business is turning around."

Core operating profit, a measure which strips out one-time items, rose 35% to £2.3bn, while revenue jumped 23% to £7.5bn. Analysts expected core operating profit of £2.2bn and revenue of £7.2bn.