22nd Feb 2007 07:01
ABCAM Plc22 February 2007 For immediate release 22 February 2006 ABCAM PLC ("Abcam" or "the Company") Interim Results for the Six Months ended 31 December 2006 Cambridge, UK: Abcam plc (AIM: ABC), the rapidly growing bioscience company thatmarkets antibodies via its own online catalogue, is pleased to announce itsinterim results for the six months ended 31 December 2006. Highlights • Sales in the half year increased 34% to £11.1m (H1 2005-06: £8.3m) • Pre-tax profits increased 18% to £2.4m (H1 2005-06: £2.0m) • Product range expanded to 28,300 (31 December 2005: 18,900) throughorganic growth and the completion of two licensing deals in the period givingexclusive distribution rights to complementary product ranges. A thirdlicensing, of at least 3,500 products over 5 years, has been announced today(see separate announcement) • High throughput (HTP) laboratory construction underway to increasesignificantly the number of high margin in-house products. Operations areexpected to begin in June 2007 • New subsidiary opened in Tokyo, which will help Abcam further developits fast-growing Asia-Pacific sales • Net cash at 31 December 2006 of £10.7m (31 December 2005: £10.8m) • Proposed interim dividend up 14% to 0.8p per share (H1 2005-06: 0.7p) • EPS of 4.97p per share (H1 2005-06: 5.03p). The EPS for H1 2006-07uses the weighted average of 34.5m shares, while H1 2005-06 uses 30.0 millionshares which reflects weighting of the new shares issued in November 2005 on theCompany's flotation. Commenting on today's interim results Jonathan Milner, Chief Executive Officerof Abcam, said: "We are committed to profitable growth and delivering healthyreturns for our shareholders. The requirement for research antibodies continuesto grow and our strategy is to maximise our share of this market. To this endAbcam made good progress in the first half of the financial year. We have nowcompleted a number of product line licensing deals, our Japanese office isperforming well and our partnerships with trusted suppliers continue tostrengthen to give us a product offering of the best quality. In addition we arealso delighted to announce today our most substantial acquisition to date of aproduct line of at least 3,500 products." For further information please contact: Abcam + 44 (0) 1223 696000Jonathan Milner, Chief Executive OfficerEddie Powell, Chief Financial Officerwww.abcam.com Buchanan Communications + 44 (0) 20 7466 5000Mark Court / Mary-Jane Johnson Notes for editors About Abcam plc Abcam is a producer and distributor of research-grade antibodies headquarteredin Cambridge, UK, with a US office located in Cambridge, Massachusetts. Abcamwas admitted to AIM in November 2005 and trades under the ticker symbol ABC.The Company produces and distributes its own and third party produced antibodiesto academic and commercial users throughout the world with product informationprovided and ordering available through the Company's website, www.Abcam.com.The antibodies are sold under the Abcam brand name. The Company's vision is tobuild the largest online antibody resource in the world while also ensuring thatthe antibodies are of high quality and commercially viable. Abcam now has anonline catalogue of approximately 29,000 products, most of which are antibodies,from over 200 suppliers supported by up-to-date and detailed technical datasheets, which are created by the Company. The Company currently employs 120staff in its three operating companies. About antibodies Antibodies are proteins produced by white blood cells in response to theintroduction of a foreign body known as an antigen. Antibodies, which have awide variety of uses in research, diagnostics and therapeutics, are used bybioscientists in research into disease and into the human genome, where they areused to mark and identify specific cells and other living matter. The number ofhuman antibodies of use in research is potentially greater than one million. CHAIRMAN'S STATEMENT Overview I am pleased to report on Abcam's progress over the six months to 31 December2006. The Company has maintained a good level of growth, with sales havingincreased by 34% to £11.1m (H1 2005-06: £8.3m). In the absence of the weakeningdollar over the period, sales would have been 39% higher than last year. Profitbefore tax increased by 18% to £2.4m (H1 2005-06 £2.0m), which was pleasing,given the costs of setting up the new Tokyo operation and the additional costsof being a listed company. In the absence of any further adverse currencymovement it is anticipated that in the second half the level of profits growthwill be more in line with the increase in sales. Against a background of continued growth, it was satisfying to achieve a numberof important strategic milestones. In November we began work on the new highthroughput laboratory facility in Cambridge, UK, which on completion will beginto provide the company with a much larger range of higher margin products. Ournew Tokyo sales office opened in December and should allow us to expand ourbusiness in Japan at the same rate we are achieving in the rest of Asia-Pacific.Since the beginning of the financial year, we have completed two deals for thelicensing of exclusive distribution rights of ranges of products. An importantfurther deal of at least 3,500 products over five years is announced today (seeseparate announcement). Operational review Sales in the Company's main market, North America, grew by 39% (in localcurrency terms) compared with the same period last year, with some slow-down inthe second quarter as compared with the first. During the period, the USsubsidiary has improved its service to customers by extending opening times soas to be able to offer next-day delivery to more customers, particularly tothose on the West coast. Saturday working has also been introduced to offerMonday deliveries. This higher level of service has been combined with a newsales and marketing programme to maintain a high rate of growth in what is acompetitive US market. Growth in the period has been very strong in Asia-Pacific, where we haverecently opened a subsidiary in Tokyo. Although it is early days yet in thisimportant market we are encouraged by the number of orders that the office hasalready started receiving. Sales into Europe have also grown well, with the volume of business increasingby 36% (in local currency terms) compared with the same period last year. We areseeking to increase our sales further in this area by continuing to promote anddevelop our French and German virtual offices so that customers can contact usin their own language. The UK market has grown by 25% in comparison and, as inthe US market, we believe that with a greater sales and marketing push highergrowth rates are achievable. In August 2006 we concluded our first exclusive distribution deal for a range of350 antibodies from Triple Point Biologics Inc. The sales of these products arenow increasing as they become established under the Abcam brand, and we expectthis trend to continue. This deal was followed in December by a similar butrelatively small one which will further augment our product range. Financial review The gross margins reported for the period under review are 59.4% against 61.5%for the same period last year. Most of the difference is due to a reallocationof cost from new product development into cost of sales but this change has noimpact on overall profitability. There were significant costs associated with the opening of the new Japaneseoffice, and also incremental costs resulting from being a public company,however, excluding these costs, expenses for the period increased in line withthe level of business. Total expenses were 40.3% higher in comparison to theprior period, which is reflected in lower operating margins of 19.3% (2005-06:23.4%). The Company's cashflow continues to be strong, with £2.3m (2005-06: £1.4m) beinggenerated from trading in the period. A total of £1.6m was spent in the periodon the licensing of exclusive distribution rights. The effective tax rate for the current year is expected to be about 28.0% ascompared with 25.4% for the whole of last year. This increase is mainly due tothe large number of share options exercised last year, with consequent taxcredits, while this year far fewer options are expected to be exercised. The EPS for the period was 4.97p (2005-06: 5.03p). The figure is lower than thatfor the previous period despite earnings increasing by 14% because of theincrease in the weighted number of shares in issue following the Company's IPOin 2005. Accounting standards The results for the period ended 31 December 2006 have been produced on the samebasis as the statutory accounts at 30 June 2006. These accounts conform fullywith UK Generally Accepted Accounting Principles. Abcam will move to reportunder International Financial Reporting Standards for the year beginning in July2007. The accounting standard FRS 20 on share based payments has been applied to theCompany's accounts for the first time, and this has resulted in a charge of£68,000 for the period. As the first application of this standard is a change ofaccounting policy the results for the same period last year have been restatedby including a corresponding charge in the expenses for that period of £31,000. Dividend The Company's Directors intend to propose a dividend in respect of the currentyear of 0.8p (2005-06: 0.7p) in line with the increase in profits. The recorddate will be 9 March 2007, and the dividend will be paid on the 9 April2007. Foreign exchange The value of sales reported in sterling has been reduced by some 5% because ofthe weakening of the dollar compared to the same period last year. The impact onthe current year's profitability has however largely been compensated forthrough foreign exchange contracts taken out before the start of the year at arate of £1 = $1.795 and which cover the rest of this financial year. Outlook Abcam is well placed to continue its growth into the future. In particular thefollowing opportunities are being pursued: - the Company will continue to add new and exciting products to itscatalogue from existing and new sources; - the high-throughput facility will dramatically increase the numberof Abcam's own products; - further opportunities for the exclusive distribution of ranges ofproducts will be sought and, if the terms are satisfactory, deals concluded. - full advantage will be taken of the opportunity presented by havinga presence in Japan. The Company's financial position remains very strong with net cash at the halfyear end of £10.7m leaving the Group well placed to capitalise on the variousopportunities to build the Group's market position. I would like to end by thanking the Company's shareholders for their support andacknowledging the contribution to Abcam's success made by its customers andsuppliers and, above all, by its staff. David CleevelyChairman21 February 2007 ABCAM PLC CONSOLIDATED PROFIT AND LOSS ACCOUNTSix months ended 31 December 2006 Six months Six months Year ended ended ended 31.12.06 31.12.05 30.6.06 Restated * Restated * Unaudited Unaudited Audited Note £000's £000's £000's TURNOVER 11,079 8,287 19,362Cost of sales (4,496) (3,188) (7,485) Gross profit 6,583 5,099 11,877 Administrative expenses (4,457) (3,175) (7,373) 2,126 1,924 4,504Other operating income 11 12 42OPERATING PROFIT 2,137 1,936 4,546 Interest receivable and similar income 248 90 313PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION 2,385 2,026 4,859Tax on profit on ordinary activities (667) (515) (1,199) PROFIT ON ORDINARY ACTIVITIES AFTER TAXATION 3 1,718 1,511 3,660 EARNINGS PER SHARE Basic earnings per share 2 4.97p 5.03p 11.47p Fully diluted earnings per share 2 4.83p 4.89p 11.07p Undiluted weighted shares in issues (000's) 34,548 30,019 31,915 ABCAM PLC STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSESSix months ended 31 December 2006 Six months Six months Year ended ended ended 31.12.06 31.12.05 30.6.06 Restated * Restated * Unaudited Unaudited Audited £000's £000's £000's Profit 1,718 1,511 3,660 Foreign exchange differences 3 (20) 8 (23) 1,698 1,519 3,637Prior period adjustment (50) - -Total recognised gains and losses 1,648 1,519 3,637 *Restated for the effects of FRS 20 "Share based payment". The effects ofadopting this standard resulted in a prior period adjustment to expense the fairvalue of the options granted being £31k for the six month period ended 31December 2005 and £72k for the year ended30 June 2006. ABCAM PLC CONSOLIDATED BALANCE SHEETSix months ended 31 December 2006 31.12.06 31.12.05 30.6.06 Restated * Restated * Unaudited Unaudited Audited Note £000's £000's £000'sFIXED ASSETSIntangible assets 1,660 - 77Tangible assets 1,606 927 1,094 3,266 927 1,171CURRENT ASSETSStocks 2,897 1,678 2,358Debtors 3,185 2,205 2,762Investment: cash deposit 9,000 8,112 11,000Cash at bank and in hand 1,692 2,666 884 16,774 14,661 17,004CREDITORS: amounts falling duewithin one year (3,168) (2,345) (3,023) NET CURRENT ASSETS 13,606 12,316 13,981 TOTAL ASSETS LESS CURRENT LIABILITIES 16,872 13,243 15,152 CREDITORS: amounts falling due (635) - -after one year Provisions for liabilities and charges (69) (74) (90) NET ASSETS 16,168 13,169 15,062 CAPITAL AND RESERVESCalled up share capital 3 346 344 345Share premium account 3 10,603 10,569 10,573Foreign exchange reserve 3 (28) 23 (8)Share based compensation reserve 3 157 63 89Profit and loss account 3 5,090 2,170 4,063 TOTAL EQUITY SHAREHOLDERS' FUNDS 8 16,168 13,169 15,062 *Restated for the effects of FRS 20 "Share based payment". The effects ofadopting this standard resulted in a prior period adjustment to expense the fairvalue of the options granted being £31k for the six month period ended 31December 2005 and £72k for the year ended 30 June 2006. ABCAM PLC CONSOLIDATED CASH FLOW STATEMENTSix months ended 31 December 2006 Six months Six months Year ended ended ended 31.12.06 31.12.05 30.6.06 Restated* Restated* Unaudited Unaudited Audited Note £000's £000's £000's Net cash inflow from operating 4 2,321 1,405 3,506activities Returns on investments and servicing offinance Interest received 248 90 313 Corporation tax paid (766) (381) (954) Capital expenditure and financialinvestment: Payments to acquire tangible (757) (259) (597)fixed assets Payments to acquire intangible (1,669) - (100)fixed assets Receipts from sales of tangible - 4 6fixed assets Net cash outflow from capital (2,426) (255) (691)expenditureand financial investment Equity dividends paid 7 (691) (912) (1,153) Net cash outflow before use of (1,314) (53) 1,021liquidresources and financing Management of liquid resources Decrease/(increase) in short 2,000 (7,112) (10,000)term deposits FinancingIssue of ordinary share capital 31 9,317 9,322 Increase in cash 5,6 717 2,152 343 *Restated for the effects of FRS 20 "Share based payment". The effects ofadopting this standard resulted in a prior period adjustment to expense the fairvalue of the options granted being £31k for the six month period ended 31December 2005 and £72k for the year ended 30 June 2006. NOTES TO THE ACCOUNTSSix months ended 31 December 2006 1 Basis of Preparation The financial information has been prepared under the historical cost conventionand in accordance with applicable United Kingdom accounting standards. Theaccounting policies used are consistent with those used in the 30 June 2006audited accounts, with the addition of the requirements of FRS 20 Share basedpayment. These interim financial statements do not constitute statutory financialstatements within the meaning of section 240 of the Companies Act 1985. Resultsfor the six months ended 31 December 2006 included in this statement do notconstitute full Group Accounts within the meaning of section 227 of theCompanies Act 1985. Full accounts for the year ended 30 June 2006, on which theauditors made an unqualified audit report, have been filed with the Registrar ofCompanies. The Group issues equity-settled share based payments to certainemployees. Equity settled share-based payments are measured at fair value at thedate of the grant. The fair value determined at the grant date is expensed on astraight line basis over the vesting period, based on the Group's estimate ofthe number of shares that will eventually vest. There are both non market andmarket based performance conditions attached to the vesting and exercising ofequity instruments. Fair value is measured by use of the trinomial or binomialmodel. The expected life used in the model has been adjusted, based onmanagement's best estimate, for the effects of non-transferability, exerciserestrictions and behavioural considerations. 2 EARNINGS PER SHARE Basic earnings per share is calculated by dividing the profit after tax for theperiod by the weighted average number of shares in issue during the period. The calculations for the periods are: Six months ended Six months ended Year ended 31.12.06 31.12.05 30.6.06 Unaudited Unaudited Audited Profit after tax £000's 1,718 1,511 3,660 Weighted average number of shares in issue 34,548,274 30,018,707 31,914,845 Basic earnings per share 4.97p 5.03p 11.47p Diluted earnings per share is calculated by dividing the profit after tax forthe period by the weighted average number of shares in issue during the periodtaking into account any shares that the company could be called on to issueunder the group's share option schemes to the extent that they are dilutive. Six months ended Six months ended Year ended 31.12.06 31.12.05 30.6.06 Unaudited Unaudited Audited Fully diluted weighted average number of shares 35,600,661 30,915,181 33,050,430 Fully diluted earnings per share 4.83p 4.89p 11.07p 3 MOVEMENT IN SHARE CAPITAL AND RESERVES FOR THE GROUP Reserve Share Foreign for share Profit Share premium exchange options and loss capital account reserve granted account Unaudited Unaudited Unaudited Unaudited Unaudited £000's £000's £000's £000's £000's As at 1 July 2006 345 10,573 (8) 89 4,063Profit for the six months - - - - 1,718Dividends paid - - - - (691)Currency translation - - (20) -difference on foreign currency net - - - - -investmentsFRS 20 Charge - - - 68 -Shares issued 1 30 - - -At 31 December 2006 346 10,603 (28) 157 5,090 4 RECONCILIATION OF OPERATING PROFIT TO NET CASH INFLOW FROM OPERATING ACTIVITIES Six months Six months Year ended ended ended 31.12.06 31.12.05 30.6.06 Unaudited Unaudited Audited £000's £000's £000's Operating profit 2,137 1,936 4,546Depreciation and 321 172 355amortisation(Profit)/loss on sale of - (5) (3)tangible fixed assetsIncrease in stocks (539) (491) (1,171)Increase in debtors (423) (293) (850)Increase in creditors 825 86 629 Net cash inflow from 2,321 1,405 3,506operating activities 5 ANALYSIS OF NET FUNDS At Cash Exchange At 01.07.06 flow movement 31.12.06 £000's £000's £000's £000'sCash in hand and at bank 884 717 91 1,692 Current asset investments 11,000 (2,000) - 9,000Total 11,884 (1,283) 91 10,692 6 RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET FUNDS Six months Six months Six months Six months ended ended ended ended 31.12.06 31.12.06 31.12.05 31.12.05 Unaudited Unaudited Unaudited Unaudited £000's £000's £000's £000'sIncrease in cash in the period 717 2,152Cash( inflow)/outflow from (2,000) 7,112 (decrease)/ increase in liquid resourcesChange in net funds resulting from cash flows (1,283) 9,264Translation difference 91 4Movement in net funds in the period (1,192) 9,268Net funds at start of period 11,884 1,510Net funds at end of period 10,692 10,778 7 DIVIDENDS Six months Six months Year ended ended ended 31.12.06 31.12.05 30.06.06 Unaudited Unaudited Audited £000's £000's £000'sOrdinary dividend:Dividends paid 691 912 1,153 8 RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS Six months ended Six months ended Year ended 31.12.06 31.12.05 30.6.06 Unaudited Unaudited Audited £000's £000's £000's Profit for the financial period 1,718 1,511 3,660Dividends Paid (691) (912) (1,153)New shares issued (net of expenses) 31 9,317 9,322Equity reserve adjustment 48 54 34Net increase in shareholders' funds 1,106 9,970 11,863Opening shareholders' funds 15,062 3,199 3,199Closing shareholders' funds 16,168 13,169 15,062 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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