GSK’s full-year sales grew by 7% before currency movements to reach £32.7bn. Speciality medicines were the key contributor, up 17%, as cancer treatment sales rose over 40% on strong patient demand and new use cases for certain medicines.
Underlying operating profit was up 11% to £9.8bn, slightly better than forecast and reflecting the positive impact of a shift to higher margin products, and efficiency gains.
Full-year free cash flow grew 41% to £4.0bn, helped by profit growth and lower investment in physical assets. Net debt was £14.5bn (2024: £13.1bn).
The 2026 growth guidance range is 3-5% for sales and 7-9% for underlying operating profit. The 2031 sales outlook of over £40 billion remains unchanged.
GSK declared a quarterly dividend of 18p per share, taking the full-year total to 66p.
The shares rose 4.1% in early trading.
Our view
Luke Miels’ first set of results in the GSK hotseat were reassuring. While guidance didn’t veer far from market forecasts, retention of his predecessors’ mid-term sales target helped provide a further boost to sentiment on results day.
There are plenty of pipeline catalysts to watch out for this year. Although compared to 2025, the focus has moved slightly away from product approvals towards late-stage trials, pushing the probability down and the timeline out for potential commercial success. GSK’s recent success rate has been impressive, but it’s important that this trend continues if it’s to offset the impact of forthcoming patent expirations.
Headwinds for US vaccine sales are being offset by strong demand in the category overseas. Growth is set to remain muted or negative for the immediate future, but we see scope for a recovery as the regional mix changes, and US comparisons ease.
Elsewhere, the group also has a strong presence in HIV treatments, which make up about 20% of total revenues. Its newer HIV treatments are a key part of the story, and they’re seeing some impressive growth. A strong clinical pipeline of next-generation HIV therapies should further help bolster GSK’s market position.
Meanwhile, Cancer treatment, although relatively small in terms of current sales, is growing rapidly. Recent approvals and launches in new markets mean there are strong growth drivers for the existing portfolio, which although concentrated, focus on first or best-in-class medicines.
Net debt crept up last year, but at about 1.3x cash profits, we’re reasonably comfortable with this level. Improving underlying cash generation helps support a prospective dividend yield of 3.6% and share buybacks, but remember, no payouts to shareholders can be assured, especially if further investment priorities are identified.
Pressure on drug pricing remains a key risk to monitor. But it’s something on which GSK has worked hard to mitigate, and this year’s guidance is up to speed on the latest developments in price agreements and tariffs. However, we can’t rule out further changes.
GSK’s consistent delivery of financial and clinical progress has seen the valuation significantly strengthen over the last year. We think the valuation now anticipates some material upgrades to consensus forecasts, which are yet to fully buy into the group’s mid-term target. GSK has the ingredients to get there, but the current valuation presents more downside exposure than there’s been for some time.
Parties related to the author hold shares in GSK.
Environmental, social and governance (ESG) risk
The pharmaceuticals sector is relatively high-risk in terms of ESG. Product governance, particularly with safety and marketing, and affordable access to treatment are the key risk drivers. Labour relations, business ethics and bribery and corruption are also contributors to ESG risk.
According to Sustainalytics, GSK's overall management of material ESG issues is strong.
There's an independent, board-level, corporate responsibility committee focused on ESG performance and framework and 10% of executive pay is tied to ESG metrics. It's ranked first on both the Access to Medicine Index and Access to Vaccines Index thanks to industry-leading efforts to ensure medicines and vaccines are provided to patients in need. Management practices concerning the transparency of clinical trials are strong, and it's committed to international standards. But despite a strong product safety programme, GSK lacks external quality management certification at its manufacturing sites.
GSK key facts
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This article is original Hargreaves Lansdown content, published by Hargreaves Lansdown. It was correct as at the date of publication, and our views may have changed since then. Unless otherwise stated estimates, including prospective yields, are a consensus of analyst forecasts provided by LSEG. These estimates are not a reliable indicator of future performance. Yields are variable and not guaranteed. Investments rise and fall in value so investors could make a loss.
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