RNS Number : 1528C
GlaxoSmithKline Capital PLC
27 August 2008
Issued: 27th August 2008, London, U.K.
GlaxoSmithKline Capital plc
Results announcement and interim management report for the half year ended
30th June 2008
Performance
GlaxoSmithKline Capital plc, (the company) a wholly owned subsidiary of
GlaxoSmithKline plc, provides financial services to its fellow subsidiaries
("the Group"). During the period the company made a profit on ordinary
activities after taxation of �1,043,000 (H1 2007 - �372,000).
The company had one cross currency swap outstanding with commercial banks at
30th June 2008. This was to manage the fixed/floating interest rate profile
of debt.
Under its European Medium Term Note (EMTN) programme the company issued a new
fixed rate bond on 6th March 2008; a 31 year note for �700 million with
interest fixed at 6.375%. Net proceeds after fees were �693,161,000. The
costs will be amortised over the life of the bond. The issue was not
swapped. The funds are to be used for Group financing purposes.
The company's policy on interest rate risk management requires that the
amount of net borrowings at fixed rates increases with the ratio of forecast
net interest payable to trading profit. At 30th Ju
Outlook
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.
GlaxoSmithKline Capital plc, 980 Great West Road, Brentford, Middlesex TW8
9GS, United Kingdom
Registered in England and Wales Registered number: 2258699
GlaxoSmithKline Capital plc
Profit and loss account
Six months ended 30th June 2008
Period ended Period ended Year ended
30th June 30th June 31st
2008 2007 December
�'000 �'000 2007
�'000
------ ------ ------
Net administrative (expense)/income (76) 55 (75)
(including foreign exchange gains
and losses)
------ ------ ------
Operating (loss)/profit: (76) 55 (75)
Net interest receivable 1,771 650 3,026
------ ------ ------
Profit on ordinary activities 1,695 705 2,951
before taxation
Taxation (652) (333) 408
------ ------ ------
Profit on ordinary activities after 1,043 372 3,359
taxation
------ ------ ------
Statement of total recognised gains and losses
Six months ended 30th June 2008
Period ended Period ended Year ended
30th June 30th June 31st
2008 2007 December
�'000 �'000 2007
�'000
------ ------ ------
Profit for the period 1,043 372 3,359
Fair value movement of cash flow - (3,260) (3,142)
hedge reserve
Amount recycled to profit and loss 481 218 387
account
Tax on fair value movement of cash - 978 942
flow hedge
reserve
Tax on amount recycled to profit (144) - (116)
and loss account
Deferred Tax - effect of tax rate - - (174)
change
------ ------ ------
Total recognised gains and losses 1,380 (1,692) 1,256
------ ------ ------
GlaxoSmithKline Capital plc
Balance sheet
30th June 2008 31st December 2007
�'000 �'000
--------- ---------
Debtors: amounts due after one year 7,096,859 6,812,508
Derivative financial assets 126,470 118,731
Cash at bank 20 4
--------- ---------
Current assets 7,223,349 6,931,243
--------- ---------
Loans due within one year (499,861) (1,233,574)
Other creditors (130,476) (91,698)
Derivative financial liabilities - (83)
--------- ---------
Creditors: amounts due within one year (630,337) (1,325,355)
--------- ---------
Net current assets 6,593,012 5,605,888
--------- ---------
Total assets less current liabilities 6,593,012 5,605,888
--------- ---------
Loans due after one year (6,594,523) (5,608,779)
--------- ---------
Creditors: amounts due after one year (6,594,523) (5,608,779)
--------- ---------
Net liabilities (1,511) (2,891)
------ ------
Called up share capital 100 100
Profit and loss account 4,325 3,282
Other reserves (5,936) (6,273)
------ ------
Equity shareholders' deficit (1,511) (2,891)
------ ------
Reconciliation of movements in equity
Period ended Period ended Year ended
30th June 30th June 31st
2008 2007 December
�'000 �'000 2007
�'000
------ ------ ------
Equity shareholders' deficit at (2,891) (4,147) (4,147)
beginning of period
Profit for the period 1,043 372 3,359
Movement in cash flow hedge reserve 337 (2,064) (2,103)
(net of taxation)
------ ------ ------
Equity shareholders' deficit at end (1,511) (5,839) (2,891)
of period
------ ------ ------
GlaxoSmithKline Capital plc
Taxation Period ended Period ended Year ended
30th June 2008 30th June 2007 31st
�'000 �'000 December
2007
�'000
---- ---- ----
Tax charge/(credit) 652 333 (408)
Tax rate 28% 30% 30%
The tax credit in the years to 31st December 2007 arises from the release of an over provision from prior years.
The effective tax rate is based on the anticipated charge for taxation for the year to 31st December 2008.
Net interest receivable/(payable) Period ended Period ended Year ended
30th June 30th June 31st
2008 2007 December
�'000 �'000 2007
�'000
Interest payable ------ ------ ------
Net swap interest income/(expense) 7,327 (1,767) (2,346)
Interest on Medium-Term Notes and (183,788) (80,777) (184,874)
Eurobonds
Amortisation of bond expenses (4,018) (1,968) (4,368)
Ineffectiveness on fair value 2,381 (185) 667
hedges
-------- -------- --------
(178,098) (84,697) (190,921)
Interest receivable
Interest receivable on loans with 179,869 85,347 193,947
group undertakings
-------- -------- --------
1,771 650 3,026
------ ------ ------
Debtors 30th June 2008 31st December 2007
�'000 �'000
Amounts due within one year -------- --------
Amounts owed by group undertakings - 388,070 1,116,879
loans
Amounts owed by group undertakings - 113,451 82,351
current account
Deferred tax asset 3,751 3,407
-------- --------
505,272 1,202,637
-------- --------
Amount due after one year
Amounts owed by group undertakings - 6,591,587 5,609,871
loans
-------- --------
7,096,859 6,812,508
-------- --------
GlaxoSmithKline Capital plc
Other creditors 30th June 2008 31st December 2007
�'000 �'0000
Amounts due within one year -------- --------
Taxation 2,904 771
Other creditors 127,572 90,927
-------- --------
130,476 91,698
-------- --------
Net debt Period ended Year ended
30th June 31st
2008 December
�'000 2007
�'000
--------- ---------
Cash at bank 20 4
Amounts owed by group undertakings - loans 6,979,657 6,726,750
Interest rate swaps - 7,333
Currency swaps 126,470 111,315
--------- ---------
7,106,147 6,845,402
Loans due within one year
Eurobonds and Medium-Term Notes (499,861) (1,233,574)
Loans due after one year
Eurobonds and Medium-Term Notes (6,594,523) (5,608,779)
--------- ---------
Net debt 11,763 3,049
------ ------
Eurobonds and Medium-Term Notes have increased by �4,018,000 due to the
amortisation of capitalised bond costs. The cumulative effect at 30th June
2008 is �20,429,000 (31st December 2007 - �16,411,000).
A �500million loan repayable in less than one year is swapped to floating
interest rates. The repayment date is 2nd October 2008. A EUR 1 billion loan
outstanding as at 31st December 2007, also swapped to floating rates, matured
on 15th April 2008.
Related party transactions
The company's significant related parties are other members of the
GlaxoSmithKline group. Advantage has been taken of the exemption afforded by
FRS 8 'Related Party Disclosures' not to disclose any related party
transactions within the Group. There are no other related party
transactions.
Cash flow
As a wholly owned subsidiary of GlaxoSmithKline plc, advantage has been taken
of the exemption afforded by FRS 1 'Cash Flow Statements' not to prepare a
cash flow statement.
GlaxoSmithKline Capital plc
Accounting presentation and policies
This unaudited Results Announcement containing condensed financial
information for the six months ended 30th June 2008 is prepared under UK GAAP
in accordance with the Listing Rules of the UK Listing Authority,
pronouncements on interim reporting issued by the Accounting Standards Board
(ASB) and the accounting policies set out in the company's audited Financial
Statements 2007.
This Results Announcement does not constitute statutory accounts of the
company within the meaning of section 240 of the Companies Act 1985. The
balance sheet at 31st December 2007 has been derived from the full accounts
published in the Financial Statements 2007, 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 either section 237(2)
or section 237(3) of the Companies Act 1985.
Principal risks and uncertainties
The directors of GlaxoSmithKline plc manage the risks at a Group level,
rather than at an individual business unit level. The principal risks and
uncertainties affecting the company are the same as those which affect the
Group, and are described under the headings below in the 'Risk Factors'
section of the 'Business Review' of the GlaxoSmithKline plc Annual Report
2007.
Risk of
unplanned loss of patents
Risk that
R&D will not deliver commercially successful new
products
Risk of
substantial adverse outcome of litigation and
government
investigations
Risks of
competition, price controls and limitations on sales
Regulatory
controls
Risk of
interruption of product supply
Risk from
concentration of sales to wholesalers
Reliance on
information technology
Taxation
Disruption
from pandemic influenza
Environmental liabilities
Global
political and economic conditions
Accounting
standards
Human
resources
In particular, policies regarding the management of Group risk pertaining to financial risk, interest rate risk and market risk as well as
liquidity are discussed in the Group's Annual Report
under the Treasury operations section of the 'Business Review'.
Directors' responsibility statement
The Board of Directors approved this document on 27th August 2008.
The Directors confirm that to the best of their knowledge this unaudited condensed financial information has been prepared in accordance
with pronouncements by the ASB and that the interim
management report herein includes a fair review of the information required by DTR 4.2.7 and DTR 4.2.8.
The Directors of GlaxoSmithKline Capital plc are Edinburgh Pharmaceutical Industries Limited and Glaxo Group Limited.
By order of the Board
Paul Blackburn,
For and on behalf of Glaxo Group Limited,
Corporate Director
27th August 2008
Internet
This Announcement and other information about the GSK Group are available on GSK's website at: http://www.gsk.com.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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