GlaxoSmithKline Capital plc
(Registered number: 02258699)
Interim Management Report
for the half year ended 30 June 2023
Registered office address:
980 Great West Road
Brentford
Middlesex
TW8 9GS
1
GlaxoSmithKline Capital plc
(Registered number: 02258699)
Interim Management Report
for the half year ended 30 June 2023
Contents
Interim report
Income statement
Statement of comprehensive income
Balance sheet
Statement of changes in equity
Cash flow statement
Notes to the financial statements
Pages
1-2
3
4
5
6
7
8-13
1
GlaxoSmithKline Capital plc
(Registered number: 02258699)
Results announcement and interim management report for the half year ended 30 June 2023
Performance
GlaxoSmithKline Capital plc (the "Company") is a member of the GSK Group (the "Group"). The principal activities of
the Company during the financial year were the issuance of notes under the Group's European Medium Term Note
programme and the provision of financial services to other companies within the Group.
The Directors do not envisage any change to the nature of the business in the foreseeable future.
Review of business
The Company made a profit for the half year ended 30 June 2023 of £5,408,000 (2022: £7,653,000), which will be
transferred to reserves. 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.
No dividend is proposed to the holders of ordinary shares in respect of the period ended 30 June 2023 (2022: £nil).
At 30 June 2023, the Company had in issue £8,277,153,000 European Medium Term Notes and £2,560,633,000 US
Medium Term Notes (31 December 2022: £9,230,890,000 and £2,688,409,000 respectively), which mature at dates
between 2023 and 2045. All notes currently in issue pay interest on a fixed rate basis.
In May 2023, the Company repaid a EUR 750 million 0.125% EUR Medium Term Note.
In addition, the Company further repurchased the following bond holdings on 13th February 2023:
• £75,783,000 of the GBP 1 billion 5.250% European Medium Term Note 2033
• £68,700,000 of the GBP 700 million 6.375% European Medium Term Note 2039
Principal risks and uncertainties
The Directors of GSK plc manage the risks of the Group at a group level, rather than at an individual statutory entity
level. For this reason, the Company's Directors believe that a discussion of the Group's risks would not be appropriate
for an understanding of the development, performance or position of the Company's business. The principal risks and
uncertainties of the Group, which include those of the Company, are discussed in the Group's 2022 annual report which
does not form part of this report.
2
Directors’ responsibility statement
The Board of Directors approved this document on 27 July 2023.
The Directors confirm that, to the best of their knowledge, this unaudited condensed financial information for the six
months ended 30 June 2023 has been prepared in accordance with Financial Reporting Standard 104 “Interim
Financial Reporting” and that the interim management report herein includes a true and fair view of the information
required by Disclosure and Transparency Rules (DTR) 4.2.7.
The Directors of the Company are:
Mrs J Brown
Edinburgh Pharmaceutical Industries Limited
Glaxo Group Limited
By order of the Board
Mr A Walker
For and on behalf of Glaxo Group Limited
Corporate Director
27 July 2023
Internet
This Announcement and other information about the GSK Group are available on the website at: http://www.gsk.com.
3
GlaxoSmithKline Capital plc
Income statement
for the half year ended 30 June 2023
Period ended
30 June 2023
Period ended
30 June 2022
Note
£'000
£'000
Other operating income / (expense)
2
(1,234)
1,810
Finance income
3
174,189
221,731
Finance expense
4
(165,886)
(214,093)
Operating profit
7,069
9,448
Profit before taxation
7,069
9,448
Taxation on profit
5
(1,661)
(1,795)
Profit for the financial period
5,408
7,653
4
GlaxoSmithKline Capital plc
Statement of comprehensive income
for the half year ended 30 June 2023
Period ended 30
June 2023
Period ended
30 June 2022
£'000
£'000
Profit for the financial period
5,408
7,653
Items that may be subsequently reclassified to the income statement:
Fair value movements on cash flow hedges
-
-
Reclassification of cash flow hedges to the income statement
1,209
1,769
Deferred tax on fair value movements on cash flow hedges
(302)
(336)
Other comprehensive income for the financial period
907
1,433
Total comprehensive income for the financial period
6,315
9,086
5
GlaxoSmithKline Capital plc
Balance sheet
as at 30 June 2023
30 June 2023
31 December 2022
Note
£'000
£'000
Non-current assets
Deferred tax assets
2,665
2,968
Loans and receivables
6
8,666,051
9,794,173
Total non-current assets
8,668,716
9,797,141
Current assets
Loans and receivables
6
2,290,864
2,236,637
Prepayments and accrued income
7
74,885
113,755
Cash and cash equivalents
1
1
Total current assets
2,365,750
2,350,393
Total assets
11,034,466
12,147,534
Current liabilities
Corporation tax
(3,884)
(2,223)
Accruals and deferred income
9
(66,833)
(106,364)
Short-term borrowings
8
(2,206,444)
(2,145,952)
Total current liabilities
(2,277,161)
(2,254,539)
Net current assets
88,589
95,854
Total assets less current liabilities
8,757,305
9,892,995
Non-current liabilities
Long-term borrowings
8
(8,631,342)
(9,773,347)
Total non-current liabilities
(8,631,342)
(9,773,347)
Total liabilities
(10,908,503)
(12,027,886)
Net assets
125,963
119,648
Equity
Called up share capital
12
100
100
Other reserves
(7,995)
(8,902)
Retained earnings
133,858
128,450
Total equity
125,963
119,648
6
GlaxoSmithKline Capital plc
Statement of changes in equity
for the half year ended 30 June 2023
Called up
share capital
Other
reserves
Retained
earnings
Total equity
£'000
£'000
£'000
£'000
At 1 January 2022
100
(13,090)
118,976
105,986
Profit for the financial period
-
-
7,653
7,653
Other comprehensive income for the financial period
-
1,433
-
1,433
At 30 June 2022
100
(11,657)
126,629
115,072
Called up
share
capital
Other
reserves
Retained
earnings
Total equity
£'000
£'000
£'000
£'000
At 1 January 2023
100
(8,902)
128,450
119,648
Profit for the financial period
-
-
5,408
5,408
Other comprehensive income for the financial period
-
907
-
907
At 30 June 2023
100
(7,995)
133,858
125,963
7
GlaxoSmithKline Capital plc
Cash flow statement
for the half year ended 30 June 2023
Period ended
30 June 2023
Period ended
30 June 2022
Note
£'000
£'000
Cash flows from operating activities
Operating profit
7,069
9,448
Adjustments reconciling operating profit to operating cash flows
11
8,563
3,458
Taxation paid
-
-
Net cash inflow from operating activities
15,632
12,906
Cash flows from financing activities
Proceeds from borrowings
-
-
Repayment of borrowings
(796,983)
(2,813,895)
Loans provided to Group undertakings
-
-
Loan repayments received from Group undertakings
792,087
2,795,017
(Increase) / decrease in current accounts with Group undertakings
(10,736)
5,969
Net cash outflow from financing activities
(15,632)
(12,909)
Net movement in cash in the period
-
(3)
Cash at beginning of period
1
4
Movement in cash
-
-
Cash at end of period
1
1
8
GlaxoSmithKline Capital plc
Notes to the financial statements for the half year ended 30 June 2023
1. Accounting presentation and policies
This unaudited Results Announcement containing condensed financial information for the six months ended 30 June
2023 is prepared in accordance with Financial Reporting Standard 104 “Interim Financial Reporting” using the
recognition and measurement requirements of Financial Reporting Standard 101 “Reduced Disclosure Framework”
and in accordance with the Listing Rules of the UK Listing Authority. The same accounting policies and methods of
computation are followed in the interim financial statements as compared with the most recent annual financial
statements.
2. Operating profit
Period ended 30
June 2023
Period ended
30 June 2022
£'000
£'000
The following items have been credited / (charged) in operating profit:
Exchange gains/(losses) on foreign currency transactions
(1,234)
1,810
3. Finance income
Period ended 30
June 2023
Period ended
30 June 2022
£'000
£'000
Interest income arising from loans with Group undertakings
174,189
221,731
4. Finance expense
Period ended 30
June 2023
Period ended
30 June 2022
£'000
£'000
Interest expense arising on financial liabilities at amortised cost
(164,677)
(212,324)
Reclassification of cash flow hedge from other comprehensive income
(1,209)
(1,769)
Total finance expense
(165,886)
(214,093)
9
5. Taxation
Period ended 30
June 2023
Period ended 30
June 2022
Income tax expense on ordinary activities
£'000
£'000
Current tax:
UK corporation tax at 23.5% (2022: 19%)
(1,661)
(1,795)
Total current tax
(1,661)
(1,795)
Period ended 30
June 2023
Period ended 30
June 2022
Total tax (expense) / credit included in other comprehensive income
£'000
£'000
Deferred tax:
Fair value movements on cash flow hedges
(302)
(336)
Total tax (expense) / credit included in other comprehensive income
(302)
(336)
6. Trade and other receivables
30 June 2023
31 December
2022
£'000
£'000
Amounts due within one year
Amounts owed by Group undertakings
2,290,864
2,236,637
2,290,864
2,236,637
Amounts due after more than one year
Long term deposits
81
120
Amounts owed by Group undertakings - loans
8,665,970
9,794,053
8,666,051
9,794,173
10,956,915
12,030,810
Amounts due within one year are deposits with Group undertakings of £96,224,896 (2022: £94,201,000) which are
unsecured, repayable within one year and earn a market rate of interest (based on benchmark risk-free rate applicable
to each currency minus 0.025%) that is consistent with the Group's policy.
Amounts due within one year also include the net proceeds of bond issuances that have been advanced as loans to
Group undertakings of £2,194,639,477 (2022: £2,142,436,000) which are unsecured with an interest rate charged
between 0.10% and 3.40%.
10
Amounts due after more than one year include the net proceeds of bond issuances that have been advanced as loans
to Group undertakings of £8,558,514,649 (2022: £9,691,844,000), which are unsecured with fixed interest charged
between 1.17% and 6.50% per annum and repayable at maturity dates between 2024 and 2045.
Amounts due after more than one year also include a call account with GlaxoSmithKline Finance plc of £107,455,726
(2022: £102,209,000) which is unsecured, repayable on demand and earns a market rate of interest (based on
benchmark risk-free rate applicable to each currency minus 0.05%) which is consistent with the Group's policy. The
call account balance is classified as a non-current asset as the amounts are not expected to be settled within the year.
7. Prepayments and accrued income
30 June 2023
31 December 2022
£'000
£'000
Amounts due within one year
74,885
113,755
Accrued income relates to interest on amounts owed by Group undertakings (see Note 6).
8. Borrowings
30 June 2023
31 December 2022
£'000
£'000
Amounts falling due within one year
Loans payable:
€ European Medium Term Notes
(429,033)
(1,108,313)
US$ Medium Term Notes
(1,777,411)
(1,037,639)
(2,206,444)
(2,145,952)
Amounts falling due after more than one year
Loans payable:
€ European Medium Term Notes
(4,022,960)
(4,155,995)
£ European Medium Term Notes
(3,825,160)
(3,966,581)
US$ Medium Term Notes
(783,222)
(1,650,771)
(8,631,342)
(9,773,347)
Total borrowings
(10,837,786)
(11,919,299)
30 June 2023
31 December 2022
Maturity of borrowings
£'000
£'000
In one year or less, or on demand
0% € European Medium Term Note 2023
(429,033)
(443,407)
0.125% € European Medium Term Note 2023
-
(664,906)
11
0.534% US$ US Medium Term Note 2023
(988,091)
(1,037,639)
3.000% US$ US Medium Term Note 2024
(789,320)
-
(2,206,444)
(2,145,952)
In more than one year, but not more than two years
1.375% € European Medium Term Note 2024
(856,195)
(884,229)
3.000% US$ US Medium Term Note 2024
-
(828,516)
4.000% € European Medium Term Note 2025
(641,722)
-
(1,497,917)
(1,712,745)
In more than two years, but not more than five years
4.000% € European Medium Term Note 2025
-
(662,778)
1.000% € European Medium Term Note 2026
(599,807)
(619,781)
1.250% € European Medium Term Note 2026
(856,412)
(884,833)
3.375% £ European Medium Term Note 2027
(305,941)
(305,753)
(1,762,160)
(2,473,145)
In more than five years
1.25% £ European Medium Term Note 2028
(744,197)
(743,675)
1.375% € European Medium Term Note 2029
(427,083)
(441,246)
3.375% US$ US Medium Term Note 2029
(783,222)
(822,254)
1.750% € European Medium Term Note 2030
(641,741)
(663,127)
5.250% £ European Medium Term Note 2033
(565,994)
(640,375)
1.625% £ European Medium Term Note 2035
(744,338)
(744,125)
6.375% £ European Medium Term Note 2039
(626,761)
(694,879)
5.250% £ European Medium Term Note 2042
(471,968)
(471,877)
4.250% £ European Medium Term Note 2045
(365,961)
(365,899)
(5,371,265)
(5,587,457)
Total borrowings
(10,837,786)
(11,919,299)
9. Accruals and deferred income
30 June 2023
31 December 2022
£'000
£'000
Amounts falling due within one year
(66,833)
(106,364)
Accruals relates to interest payable on borrowings (see Note 9).
12
10. Fair value of financial assets and liabilities
The fair values of the financial assets and liabilities are included at the price that would be received to sell an asset or
paid to transfer a liability in an orderly transaction between market participants at the measurement date.
The following methods and assumptions were used to estimate the fair values:
• Cash and cash equivalents – approximates to the carrying amount;
• Borrowings (European and US Medium Term Notes) - based on quoted market prices (a level 1 fair value
measurement);
• Intercompany loans – approximates to the fair value of borrowings (European and US Medium Term Notes);
and
• Receivables and payables – approximates to the carrying amount.
The carrying amounts and the fair values of the Company's financial assets and liabilities at 30 June 2023 and 31
December 2022 are illustrated below.
30 June 2023
31 December 2022
Carrying value
Fair value
Carrying value
Fair value
£'000
£'000
£'000
£'000
Cash and cash equivalents
1
1
1
1
Loans and receivables:
Other receivables
74,885
74,885
113,755
113,755
Amounts owed by Group undertakings
10,956,834
10,172,992
12,030,690
11,306,796
Total financial assets
11,031,720
10,247,878
12,144,446
11,420,552
Financial liabilities measured at amortised cost:
£ European Medium Term Notes
(3,825,160)
(3,435,825)
(3,966,581)
(3,759,798)
€ European Medium Term Notes
(4,451,993)
(4,210,454)
(5,264,308)
(5,010,694)
US$ US Medium Term Notes
(2,560,633)
(2,484,545)
(2,688,410)
(2,584,635)
(10,837,786)
(10,130,824)
(11,919,299)
(11,355,127)
Other payables
(66,833)
(66,833)
(106,364)
(106,364)
Total financial liabilities
(10,904,619)
(10,197,657)
(12,025,663)
(11,461,491)
Net financial assets
127,101
50,221
118,783
(40,939)
The Company has no financial assets or liabilities measured at fair value through profit or loss.
13
Financial liabilities measured at amortised cost for which the fair value of £10,130,824,000 (31 December 2022:
£11,355,127,000) as disclosed in the table above are categorised as Level 1, where quoted prices in active markets
are used. Similarly, amounts owed by Group undertakings, which include the net proceeds of bond issuances advanced
as loans, also approximate to the fair value of these financial liabilities. All other assets and liabilities approximate to
the carrying amount.
11. Adjustments reconciling operating profit to operating cash flows
Period ended 30 June
2023
Period ended 30 June
2022
£'000
£'000
Operating profit
7,069
9,448
Adjustments:
Decrease/ (increase) in other receivables
38,909
43,164
(Decrease) / increase in other payables
(39,531)
(48,215)
Exchange adjustments
1,148
(573)
Amortisation of bond costs
6,828
7,313
Reclassification of cash flow hedges to the income statement
1,209
1,769
8,563
3,458
Net cash (outflow) / inflow from operating activities
15,632
12,906
12. Called up share capital
30 June 2023
31 December 2022
30 June 2023
31 December 2022
Number of
shares
Number of
shares
£'000
£'000
Authorised
Ordinary shares of £1 each (31 December 2022:
£1 each)
100,000
100,000
100
100
Issued and fully paid
Ordinary shares of £1 each (31 December 2022:
£1 each)
100,000
100,000
100
100
13. Related party transactions
As a wholly owned subsidiary of the ultimate parent company, GSK plc, advantage has been taken of the exemption
afforded by FRS 101 "Reduced Disclosure Framework" not to disclose any related party transactions within the Group.
There are no other related party transactions.
