Abcam plc (Abcam), a in vitro diagnostics company, has reported revenues of GBP23.1 million for the first half of fiscal 2009, up 50.6%, compared with the revenues of GBP15.3 million in the year-ago period. It has reported profit after taxation of GBP5 million for the first half of fiscal 2009, or GBP14.10 per diluted share, compared with the profit after taxation of GBP1.9 million, or GBP5.44 per diluted share, in the year-ago period.
Highlights
Pre-tax profits increased 128.3% to GBP6.8m (H1 2008: GBP3 million before potential offer related costs of GBP0.25 million).
Product range expanded by 17.3% to 47,870 (31 December 2007: 40,800) through organic growth and the completion of new licensing deals.
Net cash at 31 December 2008 was GBP20.9 million (31 December 2007: GBP11.6 million).
Basic EPS increased by 157.3% to 14.28 pence per share (H1 2008: 5.55 pence).
Proposed interim dividend is up 160% to 2.71 pence per share (H1 2008: 1.04 pence).
Commenting on today’s interim results Jonathan Milner, chief executive officer, said:
“We are particularly pleased with the performance of the Group in the six months ended 31 December 2008. This performance is testament to the strength of our business model, the traction of our brand, the relatively protected and growing markets in which we operate and in no small part to the hard work of our employees.”
“Trading has begun well in the second half year though we have highlighted in the past the uncertainties faced by all companies in the current economic climate. It is difficult to assess what impact, if any, a global recession might have on our trading so we will continue to focus on maximising our performance by offering the highest quality products to new and existing customers.”
Financial review
Gross margins for the period were 64.9% against 58.8% for the same period last year, with the increase being attributable to the impact of exchange rates, improved pricing and increasing sales under our exclusive supplier deals at improved margins.
Including R&D, expenses in the period were GBP8.5 million, an increase of 29.7% over the previous year but as a percentage of sales expenses fell by 5.9 percentage points in the six months to 31 December 2008 to 36.9% (H1 2008: 42.8%). Exchange rate movements made a large contribution to this reduction, having made a much greater impact on increasing sales than expenses, because a larger proportion of our expenses are denominated in sterling. Even on a constant currency basis, however, there was a 2.5 percentage point reduction despite the relatively higher levels of cost associated with the development of the production processes at the high throughput facility.
The net effect of the retranslation of foreign currency denominated assets and the impact of contracts for the forward selling of currency was a gain of GBP0.2 million in the period (H1 2008: GBP0.2 million), which is included within administrative and management charges in the income statement. The Group’s cashflow continues to be strong, with net cash generated from operating activities of GBP8.2 million (H1 2008: GBP3.4 million). This includes the receipt of GBP1.1m on the signing of a lease in December 2008 for a new Head Office on the Cambridge Science Park adjacent to the current office, the fitout of which is expected to be completed this financial year. A total of GBP1.0m was spent in the period on capital equipment and GBP0.2 million was spent on the licensing of exclusive distribution rights.
The tax rate in the income statement for the current year is expected to be approximately 26.5%, reflecting in part the receipt of R&D tax credits and the share options exercised in the period, which result in a tax deduction for the Company.
Basic earnings per share (EPS) were 14.28 pence (H1 2008: 5.55 pence). The EPS for H1 2009 uses the weighted average of 35.2 million shares (H1 2008: 34.8 million shares).
Outlook
David Cleevely : Chairman I am pleased to report that trading has begun well in the second half year. The Board has nevertheless highlighted in recent announcements the uncertainties faced by all companies in the current economic climate. At present it is extremely difficult to assess what impact, if any, the global recession may have on our trading. There is third-party evidence of some slowdown in growth in laboratory-based spending generally but it is less clear what the impact might be in the specialist area of research antibody sales. Furthermore, there are strong defensive qualities to our markets with many of our customers being centrally funded, and potential beneficiaries of fiscal stimulus packages.
What will place the Group in the best position to maximise performance is to continue to focus on sourcing the best quality, most scientifically relevant products, and penetrate further existing and new markets through targeted marketing, thus building closer links with our customers.
Our employees are the engine that drives the Group and I would like to thank them for their untiring efforts. I would also like to thank our shareholders, customers and suppliers whose support is so important to our success.