Zeneca Reports 10% Pretax Profits Boost On Lower Sales

UK drugmaker Zeneca says sales were L2.75 billion ($4.48 billion) forthe first six months of 1997, some 6% lower than the corresponding 1996 period due to the strength of sterling and the disposal of peripheral businesses. Without these factors, underlying sales growth was 10%.

Profits before tax reached L669 million, a rise of 10% but with underlying PBT up 22%. Earnings per share were 10% better at 47.3 pence, and return on sales increased to 24.0% from 21.2%. Despite the apparent underlying strength of these results, investors were disappointed, and Zeneca saw an immediate downturn in its share price of 22 pence from the previous night's closing price of L20.465.

Pharmaceutical sales for the first half rose just 1.5% to L1.23 billion (with underlying sales growth of 13%), returning an operating profit of L398 million, up 3.9%. Agrochemicals, the group's second largest business, saw sales decline 10% to L1.01 billion, with operating profit 6.9% higher at L218 million. Further details will be published next week, after Zeneca's press conference on August 7.