Mumbai: The board of directors of GlaxoSmithKline Pharmaceuticals (GSK) has declared a dividend of Rs 7 per equity share for the year (previous year: Rs 5.50).
This year's dividend, when approved by the shareholders at the annual general meeting, will absorb Rs 52.13 crore. The dividend distribution tax (DDT) borne by the company amounts to Rs 6.68 crore.
The pharmaceutical business of the company of Rs 918 crore has grown at 8 per cent in line with the industry growth rate. The focus products registered a strong double-digit growth. The company's total sales of Rs 1,148.22 crore (Rs 1,097.37 crore) grew at 4.6 per cent primarily due to a lesser growth experienced by animal health and fine chemicals businesses.
In line with the company's strategy, the focus products have mainly contributed to increased sales which, in turn, has given a significant boost to the bottomline of the company. The net profit after tax of Rs 98.06 crore (Rs 43.98 crore) has grown at a healthy rate of 71 per cent. While the animal health business recorded a growth of 3.6 per cent, sales of the fine chemicals business declined by 4.8 per cent.
Says GSK Pharmaceuticals managing director Kal Sundaram: ''This significant improvement in profit is due to the strategies adopted by the company during the past couple of years. We aimed at improving the profit-to-sales ratio to strong double digits and growing profits significantly faster than sales.
''We achieved this objective while retaining our market leadership. A sharp focus on profitable pharmaceuticals brands, manufacturing and procurement efficiencies, tighter control on expenses, synergies from integration and head-count rationalisation have all contributed to the improved profits.''
The pharmaceuticals business
Sales of the pharmaceuticals business segment of the company stood at Rs 918 crore, constituting 81 per cent of the company's total sales. The company maintained its No 1 position in the Indian pharmaceuticals market with a share of 5.9 per cent. The growth rate of 8 per cent in pharmaceuticals sales is in line with the growth of the industry.
During 2002, the company launched three major brands - Timentin (a broad-spectrum injectible antibiotic for life-threatening infections), Flutibact (a unique combination of a steroid with an effective anti-infective agent for skin infections) and C-OD (a novel, once-daily ciprofloxacin). Augmentin and the vaccines range continued to be star performers and are gaining market share.
A number of initiatives have been launched to further improve field-force productivity. The productivity of GSK's field force has always been the highest in the industry, which further improved by 20 per cent during the year.
Agrivet farm-care business (AFC)
AFC has maintained its No 1 position in the animal health sector. This business grew at a rate of 3.6 per cent during 2002 and achieved significant improvement in its trading profit through improved product mix, procurement efficiencies and tight control on expenses. During the year, three new products in the cattle segment and two new products each in the poultry and canine segments were introduced.
Qualigens fine chemicals business (QFC)
QFC business holds the No 1 position in a highly fragmented laboratory chemicals market with an estimated market share of 27 per cent. QFC has a growing presence in diagnostics and its range of laboratory glassware has been received well by the industry. Although sales declined by 4.8 per cent over the previous year, it achieved a sizeable improvement in trading profit from procurement and manufacturing efficiencies, product portfolio review and a better control on operating expenses.
In a peer perception survey conducted among 584 senior managers of the corporate world by a leading business periodical, the company was adjudged the most respected company among all pharmaceuticals companies in India. GSK continued to enjoy the highest rating of FAAA from Crisil.
The company continued to have cordial and harmonious relations with its employees and unions. A major exercise involving harmonisation of levels and compensation of the management staff in the merged company was also successfully concluded during the year.
A number of initiatives to further upskill the company's employees at all levels, including managers, the sales force and the factory personnel were launched during the year. GSK lays great importance to increasing plant productivity, a fact that is duly reflected in all the long-term settlements signed with the unions at various manufacturing sites.