29% Constant Currency Revenue Growth in H2 as Lab Activity Gradually Recovers and Demand for Abcam In-house Products Increases
CAMBRIDGE, United Kingdom, Sept. 13, 2021 (GLOBE NEWSWIRE) -- Abcam plc (Nasdaq: ABCM; AIM: ABC) (‘Abcam’, the ‘Group’ or the ‘Company’), a global leader in the supply of life science research tools, today announces its interim results for the six- and 12-month periods ended 30 June 2021 (the ‘period’). The Group’s accounting reference date has changed from 30 June to 31 December1, therefore these interim financial statements report on both a six- and 12-month period.
|12 months to 30 June||Six months to 30 June (‘H2’)3|
|Gross profit margin, %||71.1||69.3||71.1||69.3||71.4||68.9||71.4||68.9|
|Operating profit / (loss)||28.2||10.5||45.8||44.5||10.3||(16.1)||19.8||11.1|
|Diluted earnings per share (‘EPS’) (pence)||7.2||6.0||13.5||16.6||1.3||(6.5)||4.8||3.6|
* Net Cash comprises cash and cash equivalents less borrowings.
- H2 constant exchange rate (‘CER’) revenue growth of 29% (23% reported) versus the prior year comparative period. 12-month CER revenue growth of 18% (14% reported)
- H2 in-house CER revenue growth (including CP&L4) of 41% (35% reported)
- H2 in-house CER revenue growth (including CP&L4) of 41% (35% reported)
- H2 gross margin increased 250 basis points to 71.4%, benefiting from the contribution of higher margin in-house products. 12-month gross margin increased to 71.1%
- H2 operating profit of £10.3m with a 78% increase in adjusted2 operating profit to £19.8m, equating to an adjusted operating margin of 13.2% (H2 2020: 9.1%). 12-month adjusted operating margin of 15.4% (2020: 17.1%), reflecting continuing investment in the business to support future growth
- H2 reported diluted EPS of 1.3p (H2 2020: -6.5p). Adjusted2 diluted EPS of 4.8p (H2 2020: 3.6p) reflecting the increase in operating profit offset by a higher deferred tax charge and higher number of shares in issue
- Net cash inflow from operating activities over the 12-month period of £71.9m (2020: £63.0m), ending the period with a net cash position of £219.9m (2020: £80.9m)
- Customers have gradually returned to labs during the 12-month period, with global lab activity approaching pre-COVID levels in the largest markets
- Customer transactional Net Promotor Score (‘tNPS’) up two percentage points year-on-year to +58, with product satisfaction rates reaching all-time highs for the company
- In-house product development and sales increased versus 2020, despite COVID-19 impact on lab activity; total in-house revenue in H2 (including CP&L) comprised 58% of total revenue (H2 2020: 53%)
- Partnering with biopharma, diagnostic and multiplex platform partners continued to generate current and future sources of growth with the number of commercialized antibodies with these partners rising to more than 800 (2020: 459)
- Progress was made in upgrading of the Group’s digital and physical infrastructure to support future growth, including the opening of new and expanded sites in China, Massachusetts, and California
- Completed secondary US listing on Nasdaq in October 2020 (in addition to existing AIM listing in the UK)
- Expanded Asia, Digital, and Life Science Industry experience within the Board of Directors with the appointments of Bessie Lee, Mark Capone and post period end, Sally Crawford, as Non-Executive Directors
- Post period end announced agreement to acquire BioVision, Inc, a leading innovator of biochemical and cell-based assays, for cash consideration of $340m, with closing expected in October 2021
CURRENT TRADING AND OUTLOOK
Six-months to 31 December 2021
- Uncertainty around the COVID-19 pandemic remains, yet laboratory activity and demand have continued to gradually recover and trading performance year-to-date is in line with the Board's expectations, with mid-teens CER revenue growth in July and August
- Based on prevailing exchange rates to pound sterling5, the foreign exchange headwind to revenue growth is expected to be approximately 6% in the six months to 31 December 2021
- Following the recent Oracle ERP deployments and investments made in our global facilities, adjusted depreciation and amortisation (‘D&A’) costs of approximately £17-18m are expected in the six months to 30 December 2021 (£15.1m in the six months to 30 June 2021)
- Excluding D&A, adjusted costs and expenses for the six months ended 31 December 2021 are expected to grow at mid- to high- single digit over the six-month period ended 30 June 2021 (£72.3m in the six months to 30 June 2021)
Long-Term Outlook to 2024
We are achieving growth across all product categories and geographic areas of the business as market activity continues to recover and our growth strategy is implemented. Investments we have made, and that we continue to make, are enabling the business to sustain growth, and we remain committed to generating revenue of £425 – 500m for the year ending 31 December 2024 (calculated at the average exchange rates for the 12 months ended June 2021).
The business’ cash generation and financial position continue to provide a foundation from which to pursue opportunities, including innovation, acquisitions and partnerships. We will continue to invest in our business to enable Abcam to provide innovative, trusted, and improved solutions for our customers. While the rate of investment is expected to moderate from recent levels, as we pass the peak for this 2019-2024 strategy implementation, we have a continuing appetite to invest in growing Abcam sustainably for the long term.
Commenting on the performance, Alan Hirzel, Abcam’s Chief Executive Officer, said:
“Our team is dedicated to supporting life science discovery and the translation of discovery to social impact. Our financial performance, including 29% revenue growth, is one indicator of the trust the market has in our team, our innovation, and our brand. I am grateful to everyone at Abcam and our customers for their brilliant collaboration and efforts through this most challenging time. I thank our customers and partners for their continued support.”
“As I look ahead, I am convinced more than ever that we can extend our market leadership, sustain durable growth, and become an increasingly influential partner within our industry.”
Analyst and investor meeting and webcast:
Abcam will host a conference call and webcast for analysts and investors today at 14:00 BST/ 09:00 EDT. For details, and to register, please visit corporate.abcam.com/investors/reports-presentations
For further details please contact FTI Consulting at email@example.com
A recording of the webcast will be made available on Abcam’s website, corporate.abcam.com/investors
- On 2 June 2021, Abcam announced that it had changed its accounting reference date from 30 June to 31 December. Following this extension of the Group's accounting period to the 18 months ended 31 December 2021, these interim financial statements are the second set of interim results that the Group has reported in this period. Unless otherwise stated, commentary relates to the comparison of the 12-month period ended 30 June 2021 (‘2021’) with the same period ended 30 June 2020 (‘2020’). Comparative tables for the sis-month period ended 30 June 2021 are provided in the financial statements.
- These interim results include discussion of alternative performance measures which include revenues calculated at Constant Exchange Rates (CER) and adjusted financial measures. CER results are calculated by applying prior period's actual exchange rates to this period's results. Adjusted financial measures are explained in note 2(c) and reconciled to the most directly comparable measure prepared in accordance with IFRS in note 4 to the interim financial statements.
- Throughout this report, ‘H2 2020’ and ‘H2 2021’ refer to the six-month periods ended 30 June 2020 and 30 June 2021, respectively.
- Custom Products & Licensing (CP&L) revenue comprises custom service revenue, revenue from the supply of IVD products and royalty and licence income.
- Based on average exchange rates to GBP from 1 July – 9 September 2021 as follows: USD: 1.38; EUR: 1.17, RMB: 8.93, JPY 151.9
The information communicated in this announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) No. 596/2014.
For further information please contact:
|Abcam||+ 44 (0) 1223 696 000|
|Alan Hirzel, Chief Executive Officer|
Michael Baldock, Chief Financial Officer
James Staveley, Vice President, Investor Relations
|Numis – Nominated Advisor & Joint Corporate Broker||+ 44 (0) 20 7260 1000|
|Garry Levin / Freddie Barnfield / Duncan Monteith|
|J.P. Morgan Cazenove – Joint Corporate Broker||+ 44 (0) 20 7742 4000|
|James Mitford / Hemant Kapoor|
|Morgan Stanley – Joint Corporate Broker||+ 44 (0) 207 425 8000|
|Tom Perry / Luka Kezic|
|FTI Consulting||+ 44 (0) 20 3727 1000|
|Ben Atwell / Natalie Garland-Collins|
This announcement shall not constitute an offer to sell or solicitation of an offer to buy any securities.
This announcement is not an offer of securities for sale in the United States, and the securities referred to herein may not be offered or sold in the United States absent registration except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the U.S. Securities Act of 1933, as amended. Any public offering of such securities to be made in the United States will be made by means of a prospectus that may be obtained from the issuer, which would contain detailed information about the company and management, as well as financial statements.
Forward Looking Statements
This announcement contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Any express or implied statements contained in this announcement that are not statements of historical fact may be deemed to be forward-looking statements, including, without limitation statements of targets, plans, objectives or goals for future operations, including those related to Abcam’s products, product research, product development, product introductions and sales forecasts; statements containing projections of or targets for revenues, costs, income (or loss), earnings per share, capital expenditures, dividends, capital structure, net financials and other financial measures; statements regarding future economic and financial performance; statements regarding the scheduling and holding of general meetings and AGMs; statements regarding the assumptions underlying or relating to such statements; statements about Abcam's portfolio and ambitions, as well as statements that include the words “expect,” “intend,” “plan,” “believe,” “project,” “forecast,” “estimate,” “may,” “should,” “anticipate” and similar statements of a future or forward-looking nature. Forward-looking statements are neither promises nor guarantees, but involve known and unknown risks and uncertainties that could cause actual results to differ materially from those projected, including, without limitation: a regional or global health pandemic, including the novel coronavirus (“COVID-19”), which has adversely affected elements of our business, could severely affect our business, including due to impacts on our operations and supply chains; challenges in implementing our strategies for revenue growth in light of competitive challenges; developing new products and enhancing existing products, adapting to significant technological change and responding to the introduction of new products by competitors to remain competitive; failing to successfully identify or integrate acquired businesses or assets into our operations or fully recognize the anticipated benefits of businesses or assets that we acquire; if our customers discontinue or spend less on research, development, production or other scientific endeavors; failing to successfully use, access and maintain information systems and implement new systems to handle our changing needs; cyber security risks and any failure to maintain the confidentiality, integrity and availability of our computer hardware, software and internet applications and related tools and functions; failing to successfully manage our current and potential future growth; any significant interruptions in our operations; if our products fail to satisfy applicable quality criteria, specifications and performance standards; failing to maintain our brand and reputation; our dependence upon management and highly skilled employees and our ability to attract and retain these highly skilled employees; and the important factors discussed under the caption “Risk Factors” in Abcam's prospectus pursuant to Rule 424(b) filed with the U.S. Securities and Exchange Commission (“SEC”) on 22 October 2020, which is on file with the SEC and is available on the SEC website at www.sec.gov, as such factors may be updated from time to time in Abcam's other filings with the SEC. Any forward-looking statements contained in this announcement speak only as of the date hereof and accordingly undue reliance should not be placed on such statements. Abcam disclaims any obligation or undertaking to update or revise any forward-looking statements contained in this announcement, whether as a result of new information, future events or otherwise, other than to the extent required by applicable law.
Interim management report
Following the extension of the Group's accounting period to the 18 months ended 31 December 2021, these interim financial statements are the second set of interim results that the Group has reported in this period. Unless otherwise stated, the commentary relates to the comparison of the 12-month period ended 30 June 2021 (‘2021’) with the 12-month period ended 30 June 2020 (‘2020’). Comparative tables for the six-month period ended 30 June 2021 are also provided in the financial statements.
We are pleased with the continued progress of our business over the last 12 months and the way our people have responded to the evolving impact of COVID-19. Indeed, the challenges presented since the pandemic began over 18 months ago have served to highlight the resilience of both our employees and our business, as well as the role Abcam and its customers have in advancing critical life science research. We are convinced more than ever that by continuing to develop our technologies, people, and capabilities, and focusing on customer needs, we can extend our market leadership, sustain durable growth, and become an increasingly influential partner within our industry.
Demand for our products, and particularly Abcam’s in-house developed products, increased during the period as laboratories have continued to relax COVID-19 restrictions, enabling greater productivity. Whilst the global pandemic situation continues to be fluid – and the risk of further outbreaks and new variants remains – we estimate that overall lab activity is now approaching pre-COVID levels in our largest markets.
As a result, in the six months ended 30 June 2021 our growth accelerated, with total revenues increasing 29% CER (23% reported), adjusted operating profit up 78%, to £19.8m (H2 2020: £11.1m), and adjusted diluted EPS increasing 33% to 4.8p (H2 2020: 3.6p). On a reported basis, operating profit increased to £10.3m (H2 2020: -£16.1m) and diluted EPS increased to 1.3p (H2 2020: -6.5p). Revenue over the 12-month period grew by 18% CER (14% reported) to £297.7m, whilst adjusted operating profit rose 3%. Adjusted diluted EPS declined to 13.5p (2020: 16.6p). On a reported basis, operating profit increased to £28.2m (2020: £10.5m) and diluted EPS increased to 7.2p (2020: 6.0p).
Despite the disruption inflicted on our customers and industry by COVID-19, the opportunities for growth in our markets remain, and we are committed to our investment plans to support the Group’s long-term growth ambitions. This has been an active period of strategic implementation across the Group, and we pay tribute to our colleagues and teams around the world who have shown audacity, agility, and dedication in the delivery of our plans – they are fundamental to the Group’s future success.
Underpinning our continued progress is our robust balance sheet and financial position, which enables us to invest in attractive organic and inorganic growth opportunities as they arise. This includes the recently announced acquisition of BioVision, a leading innovator of biochemical and cell-based assays, for $340m (subject to approval by the Shenzhen stock exchange and NKY shareholders, the parent company of BioVision), which will accelerate Abcam's strategic execution and focus on in-house innovation and products.
Looking forward, with our expanding capabilities, financial position and market opportunities for growth, the Group is well-placed to sustain long-term value creation.
As announced on 1 September 2021, the results presented for the 12 months ended 30 December 2020 include restated financial information for the six months ended 31 December 2020. See note 2 to the interim financial statements for further information.
Revenue growth continues to be driven both by a recovery in laboratory activity from the depressed levels experienced in 2020 due to the COVID-19 pandemic, and by increasing demand for our portfolio of in-house developed products. Overall, in the six months ended 30 June 2021, total reported revenue grew 23.3% to £150.2m (H2 2020: £121.8m), representing CER growth of 29.0%, after a 5.7% headwind from foreign currency exchange as sterling appreciated against the Group’s major trading currencies.
The revenue impact of delisting products as part of our ongoing quality initiatives was approximately 3%. Though product delistings occur every year, the revenue impact in the period was materially higher than in prior years due to the removal of a certain number of larger supplier portfolios, which is not expected to be repeated.
Catalogue revenue, comprising around 94% of total revenue, grew 31.2% CER in the six months ended 30 June 2021 (25.6% reported), driven by increased demand for our in-house products, with CER revenue growth from these products of 47.7% CER (41.4% reported). Regionally, all major territories grew at high-single or double-digit rates.
Custom Products & Licensing (‘CP&L’) revenue, comprising the remaining 6% of total revenue, rose 3.2% on a CER basis (-4.3% reported). Within CP&L, revenue growth delivered from the supply of products for IVD use and from royalties and licensing income was partially offset by a decline in revenue from custom projects, which experienced lower customer activity in the period due to COVID-19.
Overall, total revenue for the 12-month period ended 30 June 2021 grew 14.5% to £297.7m (2020: £260.0m), representing CER growth of 18.0% after a 3.5% foreign currency exchange headwind. Acquisitions added 2% to reported revenue growth in the year (all of which was incurred in the first six months, to 31 December 2021), offset by approximately 3% of revenue lost due to product delistings.
|12 months to 30 June||Six months to 30 June|
|Revenue, £m||% change||2021||Revenue, £m||% Change||2021|
|2021||2020||CER||% split||2021||2020||CER||% Split|
|Catalogue revenue by region|
|Rest of Asia Pacific||22.3||20.0||16.1%||8%||10.9||9.6||19.5%||8%|
|Catalogue revenue sub-total||280.3||243.1||18.6%||100%||141.3||112.5||31.2%||100%|
|Custom products and services||5.1||6.3||(15.1%)||29%||2.4||3.0||(13.3%)||27%|
|Royalties and licenses||6.6||5.9||18.4%||38%||3.4||3.0||21.1%||38%|
|Custom Products & Licensing sub-total||17.4||16.9||8.9%||100%||8.9||9.3||3.2%||100%|
|Total reported revenue||297.7||260.0||18.0%||100%||150.2||121.8||29.0%||100%|
|Catalogue revenue by product type:|
|Catalogue revenue sub-total||280.3||243.1||18.6%||100%||141.3||112.5||31.2%||100%|
Gross margin increased by 250 basis points, to 71.4%, in the six months ended 30 June 2021 (H2 2020: 68.9%), reflecting both a favourable movement in product mix, with catalogue revenue generated from in-house products increasing to 55% of the total (H2 2020: 49%), as well as volume leverage resulting from the increase in revenue. Gross margin for the 12-month period increased to 71.1% (2020: 69.3%). The Group expects gross margin to continue to benefit from an increasing proportion of in-house product sales in the future.
Operating Costs and Expenses
|12 months to 30 June||Six months to 30 June|
|Selling, general & administrative expenses (SG&A)||158.8||131.4||147.4||118.3||85.8||70.7||79.3||62.2|
|Research and development expenses (R&D)||24.8||38.3||18.6||17.4||11.1||29.3||8.1||10.6|
|Total operating costs and expenses||183.6||169.7||166.0||135.7||96.9||100.0||87.4||72.8|
|Depreciation and amortisation||(35.4)||(29.9)||(26.1)||(21.2)||(19.4)||(16.7)||(15.1)||(11.4)|
|Total operating costs and expenses excl. non-cash costs||
By: GlobenewsWire - 27 Oct 2021Return to news
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