Preliminary Results for Year Ended 30 June 2014

9 September 2014

For immediate release

ABCAM PLC

("Abcam" or "the Company")

Preliminary Results for the Year Ended 30 June 2014

Abcam plc (AIM: ABC), a global leader in the supply of life science research tools, is pleased to announce its preliminary results for the year ended 30 June 2014.

HIGHLIGHTS

· Catalogue revenue increased by 10.0% on a constant currency basis to £118.0m (2012/13: £111.3.m). On a reported basis the increase was 6.0% 

· Total revenue increased by 8.6% on a constant currency basis (4.7% on a reported basis) to £128.0m (2012/13: £122.2m)  

· Underlying gross margin grew slightly but the effect of exchange rates reduced reported margins to 70.6% (2013: 71.0%)  

· After increased investment to drive future growth, adjusted operating profit* increased slightly to £46.6m (2012/13: £46.5m). Reported operating profit increased to £43.3m (2013: £42.8m) 

· Adjusted diluted earnings per share (EPS)* increased by 2.8% to 18.06 pence (2012/13: 17.57 pence). Reported EPS increased by 4.2% to 17.02 pence (2012/13: 16.34 pence) 

· Closing cash and term deposits were £56.9m (30 June 2013: £38.3m)  

· Excellent progress in implementing our key organic growth initiatives  

· Dividend increased by 10.1% to 7.75 pence per share (2012/13: 7.04 pence)  

· Opened a new office in Shanghai, China, providing us greater access to local markets and improving the consumer experience

* Excluding £3.3m (2012/13: £3.3m) of acquisition-related intangible amortisation costs and no one-off charges (2012/13: £0.4m) and, in the case of EPS, the related tax effect.

Commenting on the preliminary results, Jonathan Milner, Abcam's Chief Executive Officer, said:

"Over the last year, Abcam has continued to deliver strong results. Investment in our organic growth strategy is beginning to come through, and we are pleased to report increased revenue, profit and dividend. The growth from our catalogue products of 10.0%, above the growth of the wider market is particularly pleasing, and demonstrates that consumers continue to recognise the quality of our products. The 2014/15 financial year has started well and we are optimistic that our continued investments in new products and capabilities, coupled with increased geographic penetration, will continue to drive sales."

POST PERIOD-END EVENTS

Abcam has separately announced today that Alan Hirzel will succeed Jonathan Milner as Chief Executive Officer. Alan takes on the role of Chief Executive having spent the last year as Chief Marketing Officer of Abcam and having served on the Board since January 2014. Jonathan Milner will continue to play an active role in the company as Deputy Chairman with responsibility for business development and will remain the company's largest shareholder.

Peter Keen, a Board member since 2005, will not be seeking re-election at the AGM, in line with corporate governance best practice for independent directors.

More information can be found at www.abcamplc.com.

For further information please contact:

There will be a presentation for analysts at 0930 (UK time) today at Brunswick Group, 16 Lincoln's Inn Fields, London, WC2A 3ED. A live video webcast and slide presentation of this event will be available on www.abcamplc.com. We recommend you register at 0915 (UK time).

There is also conference call dial-in +44 (0) 20 3003 2666, the password is Abcam.

Notes for editors

About Abcam

Abcam plc is a leading provider of life science research tools and services, with a wide range of products and expert technical support, enabling scientists to analyse living cells at the molecular level and improving the understanding of health and disease.

Abcam is committed to providing scientists with an extensive choice of reagents and tools, with the most comprehensive, honest and up-to-date datasheets and customer reviews, fast delivery and helpful customer service & technical support. The Company's catalogue evolves with scientific research trends and is growing each year to provide customers with products to meet their research needs. The range now includes primary and secondary antibodies, proteins, peptides, lysates, biochemicals, immunoassays and other kits. Abcam also supports its customers by hosting a range of global scientific events, forums and webinars, providing opportunities for scientists to get together and present their work.

Headquartered in Cambridge, UK, Abcam has eight global subsidiary offices enabling local services, multi-language support and sells to over 100 countries. The Company was founded in 1998, and now employs over 740 people. Abcam was admitted to AIM in 2005 (AIM: ABC).

To find out more, please visit www.abcamplc.com

CHAIRMAN'S STATEMENT

I am pleased to report further progress of the Group during the year. Stripping out the negative effect from the relative strengthening of Sterling, overall revenue growth was 8.6%, and revenues from the sale of products sold through our catalogue, which is the focus of our growth strategy, grew by 10.0%. Allowing for currency fluctuations, the overall reported revenue growth was 4.7%, of which catalogue sales grew by 6.0%. After increased investment in the business to support our growth, adjusted profit before tax was £46.8m, which is marginally higher than last year (2012/13: £46.6m).

It has been an exciting year as we have been diligently building around the organic growth strategy that we outlined in September 2013. As part of these activities we have made investments across the business, particularly in people, processes and product development. Significant progress has been made and we are pleased to see the effect of these growth initiatives beginning to come through. Our push into eastern markets has continued in the year with the opening of our new office in Shanghai, China, in February 2014. Having a local presence dramatically improves our delivery lead times, enhances consumer experience, and presents a number of strategic opportunities, which include the building of direct relationships with major companies in the region.

Elsewhere in western territories the environment for government-funded research is more challenging, driven by large fiscal deficits. That said, however, we are beginning to see signs of stability in the US as modest funding increases are approved.

New product additions for the year were 11,521, taking the total catalogue to over 133,000 products. The level of additions is below that in recent years as we increasingly focus on in-house development to high-value targets. During the year we launched 1,733 new RabMAb® products, making us the largest provider of rabbit monoclonal antibodies globally.

Dividends

The strong balance sheet and cash generation capability of the Group has allowed us to sustain the progressive improvement in dividends. This year the Board is proposing a final dividend of 5.62 pence per share, which when added to the interim dividend of 2.13 pence represents an increase of 10.1% for the year as a whole. Subject to shareholder approval the final dividend will be paid on 28 November 2014 to shareholders on the register on 7 November 2014.

Board changes

There have been a number of Board changes since the start of the 2013/14 financial year, which have been made to support the business in its next phase of growth or in compliance with best governance practice. Some of these changes have been announced today and others over the year. They are as follows:

· Alan Hirzel has been appointed as CEO with immediate effect, having joined the Board earlier in the year;

· At the same time Jonathan Milner moves from CEO to a newly created Deputy Chairman position and will have an active role in the continued development of the company;

· Louise Patten joined the Board earlier in the year and is Chairman of the Remuneration Committee. She will assume the Senior Independent Director role following the AGM in November;

· After nine years Peter Keen will not be seeking re-election to the Board at the Annual General Meeting (AGM) in November, in line with best practice for independent non-executive directors; and

· As announced earlier in the year I, Michael Redmond, will be stepping down from the Board at the AGM and one of our non-executive directors Murray Hennessy will be taking over as Chairman of the Board.

More details on the Board changes can be found at www.abcamplc.com.

I am delighted to welcome both Alan and Louise to the Board and am confident they are already playing a significant role in Abcam's ongoing development.

Peter Keen joined the Board in 2005 prior to the Company's flotation on AIM, during which time he has served as Chairman of the Remuneration and Audit Committees and as the Senior Independent Director. As also announced today, in line with best practice, Peter has decided not to seek re-election at the next AGM, at which he will have served nine years. We are most grateful for the huge contribution he has made to the operation of the Board and the development of the business during that time.

Lastly, as announced in June 2014, after five years as Chairman I have decided to step down from the Board following the AGM, to be held later this year, and my fellow Board member, Murray Hennessy, will be taking over the role of Chairman. Murray has served as a Non-Executive Director for almost three years and has developed a deep understanding of Abcam. He brings extensive experience in international customer-facing industries and online businesses, and is the ideal candidate to take over and help lead Abcam's next phase of growth.

Corporate governance

Over the course of the year the Board and its committees have addressed the corporate governance requirements arising from changes to regulations. We have expanded our Strategic Report, making our business model and key strategic priorities more transparent, and increased disclosures on matters affecting audit and remuneration.

The composition of the Board is kept under regular review to ensure that its members bring the appropriate skills required to improve its effectiveness and performance. I am pleased to report that the Board has functioned well in all respects during the year, providing knowledgeable and robust challenge and support to the Executive Directors. I am also confident that the changes described above will enable the Board to continue to do so as Abcam's business continues to grow.

Awards

In October 2013 we were delighted to be named 'Company of the Year' in the 2013 AIM Awards. The award is presented to the company that has best demonstrated it is a responsible, fully accountable, dynamic business with strong growth prospects. Above all, the winner is deemed to be a well-managed business, having attracted public funding to enhance and develop its growth potential to the full.

During the year we were also proud to have been voted as Management Today's 'Most Admired Company' in the Healthcare and Household sector. The Britain's Most Admired Companies Awards are an important indicator of the highest performing companies in British business that embed excellence throughout their organisation.

Outlook

During 2013/14 we have begun to see the benefits of our investments to drive organic growth and expect to see further progress in the coming year. Looking ahead, our market intelligence indicates tentative signs that market conditions may be improving in the US, and we are cautiously optimistic of greater certainty around the level of centrally funded research expenditure. While we remain cautious about the prospects for a recovery to historical levels of funding growth, the 2014/15 financial year has started well and we are optimistic that our continued investments in new products and capabilities, coupled with increased geographic penetration, will continue to drive sales.

I would like to thank all the members of the Abcam family for the progress made in year and look forward to repeated success in 2014/15.

Mike Redmond

Chairman

8 September 2014

CHIEF EXECUTIVE OFFICER'S REVIEW

The year ended 30 June 2014 has been an exciting and busy time for Abcam.

We have invested in our organic growth strategy and are pleased to see its impact beginning to come through. Sales growth from our catalogue products of 10.0% on a constant currency basis is above the growth of the wider market and demonstrates that consumers continue to recognise the quality of our products.

The key to our success in the year and beyond lies in the continued focus and investment around our five strategic goals:

· grow our core reagents business faster than the market;

· establish new growth platforms;

· create a scalable organisation;

· sustain attractive economics; and

· selectively pursue partnerships and acquisitions

Successful execution of our strategy demands that we increasingly focus on listening to our consumers and ensuring that we use the insights gained to shape our business. I am delighted with the progress that we have made on each of these goals during the year and the plans we have in place for the future.

Our business model

Scientific researchers are at the core of our business model. By understanding our consumer needs, we are able to drive the direction of the business to help advance their research.

Life science researchers work in different locations and on different protein targets, but they need the right products to help them achieve their goal of 'discovering the next big scientific breakthrough'. It is essential that the reagents researchers use are of the highest quality, enabling experiments that are conclusive, consistent and repeatable. Researchers need to be able to select the right product based on extensive data from product testing and validation. Recommendations from their peers also help make their choice easier. By ensuring our products meet these needs our consumers will become repeat purchasers and will recommend us to their peers.

Our consumer-centric approach, along with our wealth of product data, global manufacturing capabilities, and network of OEM suppliers, make our business model robust and defensible. In turn this enables us to build strong, long-lasting partnerships with the scientific community and provides the flexibility to capture market share in under-penetrated segments. In the future, this approach will move us closer to being the brand most recommended by life science researchers.

Our beginnings

Adding products, building knowledge, sharing data

Our flexible sourcing model enables us to grow our product offering in line with researchers' needs. This is achieved by sourcing products from OEM suppliers, of which there are now more than 400, as well as manufacturing products in-house. We also developed our own in-house production capabilities in order to add more high-quality products to our catalogue.

We were the first company to add extensive and transparent product characterisation and validation data, which is sourced by our in-house laboratories, our network of collaborators and independent consumer product reviews Abreviews.

Emerging today

Innovating to meet the needs of the scientific researcher

To keep up with the pace of scientific research, we look at ways that we can add further dimensions to our product ranges and extend our expertise. One of the ways in which have achieved this is through the acquisition of companies that share our values and are leaders in innovating to meet the needs of the scientific research community.

These acquisitions have enabled us to develop new products, allowing us to target underserved segments in the marketplace. Our patented RabMAb® technology has provided opportunities to partner with key research organisations so we can provide new product innovations that will enhance researchers' experiments by providing antibodies of the highest quality possible. As a result of these acquisitions and our increased focus on in-house innovation approximately 38.8% of Group revenues are derived from own manufactured products, services and licences.

The wealth of data that supports our product offering builds trust with consumers and provides us with insight on where our sourcing and innovation efforts should be focused within life science research.

Our future

Consumer insight and improved consumer loyalty

We are increasingly moving our business model towards a focus on understanding what happens at each consumer touch point. By continually enriching these interactions we will provide a more intelligent and targeted offering.

We will better anticipate consumers' needs by building stronger links with the scientific community at conferences and other events, providing expert technical support, through collaborations with research leaders and through the use of web analytics to help us better understand purchasing preferences and habits. We also continue to encourage feedback through regular consumer surveys and focus groups, which help us update product datasheets, provide useful technical resources and improve service levels.

Our aim is to improve our listening, our service and our responsiveness to better serve our consumers as we grow. We will also look at opportunities to partner with scientific organisations and make strategic investments which align and enrich our business within the field of life science research.

Marketplace and trends

The following table outlines our revenues in each geographic region, along with estimated underlying growth rates:

1 Includes custom services, IVD/IHC, royalties and licence income

The Americas

The Americas remain our largest geographic segment and is dominated by the US, which represents over 90% of the region's revenue. We have made good progress there in the year, in particular through investing in our sales and marketing capabilities. An improved marketing effort around our RabMAb® products has helped to increase the number of consumers taking advantage of the benefits of our RabMAb® technology. There are geographic pockets of high levels of research activity within the US and during the year we have restructured our regional account team to ensure we have appropriate representation in all these key regions. We have also seen early signs of an improved environment for centrally funded research budgets. Sequestration worries and budget indecision, which were such a dominant feature of the 2012/13 financial year, showed signs of subsiding in 2013/14, and the National Institutes of Health (NIH) received a budget increase of 3.5% for its fiscal year to September 2014. While this does not entirely reverse the cuts of sequestration, it does alleviate some of the uncertainty and negative sentiment, at least in the short term.

Outside the US the changes we put in place to improve consumer service in Canada continue to be well received, and we have also seen good progress in Brazil, where the distributor change made last year is beginning to have a positive impact. Favourable market growth makes Brazil an important part of our Americas strategy, and we continue to review the best way to reduce lead times and improve consumer service.

Europe, Middle East and Africa (EMEA)

Our largest markets within the EMEA region are UK, Germany and France, which on a combined basis account for 54% of the region's sales. Continuing the recent trend the UK performed very well in the year, while France and Germany performed satisfactorily with each growing at slightly below the wider EMEA rate.

The relative performance of the countries in the EMEA region has been broadly consistent with the macro-economic trends of each region. However, in some of the smaller southern European markets performance was mixed. Growth in Italy improved slightly in the years, albeit still below that seen in the wider EMEA region, while funding pressures meant Spain remained broadly flat. Notable strong performance was seen in Switzerland, where we saw the full year effects of changes made to the way in which products are imported.

We continue to improve our levels of service wherever possible and have recently introduced a small regional account team to help build closer relationships with potential high-value organisations.

Japan

Revenues from Japan grew by 11.5% on a constant currency basis, with 14.1% growth in the second half. We continue to see the positive effect of the stimulus package that was announced by the government in 2013 with the goal of investing $11bn into science and technology. The effects of this stimulus are expected to carry over into the beginning of our 2014/15 financial year and it is positive that the government remains supportive of science and technology as a means to stimulate growth.

Asia Pacific

China has been a big focus for us and featured prominently within our strategy to develop additional growth platforms. We opened our new Shanghai office in February 2014 and after a period of transition earlier in the year we are pleased to see the impact of having a greater local presence coming through in Q4. Overall growth in China on a constant currency basis was 15.5%. Having the new office means that we have greatly improved our capacity and flexibility to hold inventory in mainland China, dramatically reducing our lead times and improving the consumer's experience.

Outside of China growth was good overall, as strong performances in South Korea and Singapore were offset by a small decline in Taiwan, where the funding environment has been more difficult.

Non-product revenue

Non-product revenue represents revenues derived from sales outside of the Abcam online catalogue and on a combined basis were £10.0m in the year (2012/13: £10.9m), representing 7.8% of overall revenues in the year.

Our capability to offer custom services will continue to be an important component in our strategy for building relationships with key researchers, enabling us to provide innovative products for our catalogue. However, as previously announced, the size of this area of our business needs to be appropriate for our overall strategy and, consequently, revenue from custom services has declined in the year. We have restructured our custom services cost base accordingly to be consistent with expected future levels of activity.

Revenue from royalties and licences derives from legacy agreements which were put in place prior to the acquisition of Epitomics. Under these agreements several life science companies were granted access to parts of the RabMAb® technology for the development of their own rabbit monoclonal antibodies, in return for which they pay royalties and licence fees. Such agreements are not aligned with our strategy and therefore such revenues are anticipated to decline over time. Consequently revenue growth in the year was flat.

Our in-vitro diagnostics immunohistochemistry (IVD IHC) business performed well in the year albeit from a small base. This area of our business sells antibodies developed using our RabMAb® technology to anatomical pathologists. A handful of large instrumentation manufacturers dominate this market, several of which are now customers. Our success in this marketplace is reliant on gaining an effective route to market and we are delighted to have signed a global strategic marketing agreement with Cell Marque after the year end.

Market trends and funding environment outlook

Funding

A large percentage of Abcam's revenues are derived from consumers who are publicly funded through research grants. The nature of the market means that it is very difficult to give a precise measure but it is thought to be somewhere around 80% of our revenues. Our remaining consumers are spread across the pharmaceutical, biotechnology and in-vitro diagnostics markets.

Over the last few years the austerity measures in the US and European markets have meant that real-term government funding increases into life science research have been small or in some circumstance funding has actually declined. During that time Abcam's revenues have continued to grow by taking market share, which is testimony to the strength of our business. However, the global government research funding environment is relevant when considering Abcam's growth potential, in terms of its impact on market growth.

More recent data suggests tentative signs of improvement, with the NIH being granted a 3.5% increase in funding in the year to September 2014. Despite this we retain our cautious outlook on the US and European funding environments.

Slower funding increases in the West, combined with strong investment in life science research by China, has resulted in a shift of spending towards the East. It is estimated that China's research funding increased by 33% per annum between 2007 and 2012, while the US total share of global research funding shrank from 51% to just 45% over the same period.

The research reagents that Abcam sells are fundamental to the work life scientists across the world are performing every day. We therefore feel that, when compared to larger capital intensive spending, our products are more resilient to changes in short-term funding.

Quality

As the market matures and funding remains under pressure we are increasingly seeing consumers seeking higher quality products. Consumers are unwilling to waste their funds or, moreover, their biological samples on products that do not work. Suppliers who are able to provide higher quality products are likely to see a greater share of market growth. Therefore the continued introduction of high-quality products, such as those developed using our RabMAb® technology, is a key part of our strategy.

Efficiency

We have seen a strong performance from our kits and assays business during the year. Just as consumers are seeking high-quality products, they are increasingly looking for kits containing products that have been validated to work together. These kits offer consumers greater productivity through improved repeatability and a higher level of certainty that the product will work.

Board Changes

As announced today Alan Hirzel has been appointed as Chief Executive Officer. I have worked closely with Alan over the last year and he has been inspirational in the evolution of our strategy. Alan brings a rich and deep background in both life sciences and management, with an impressive knowledge of our markets. He has my full confidence and I believe there is no one better to take the company forward on the next phase of our journey. I look forward to continuing to work closely with him and the strong leadership team at Abcam in my new role as Deputy Chairman, helping to seek out new technologies and opportunities which will further strengthen the company.

Other Board changes are set out in more detail in the Chairman's statement and I am delighted to welcome Louise Patten and look forward to working with Murray Hennessy in his role as Chairman after the next AGM.

At that meeting Peter Keen and Mike Redmond who have been on the Board for nine and five years respectively will be standing down. I would like to pass on my personal thanks to both for their guidance and wisdom which has helped Abcam become the company it is today.

Summing up

We have a clear strategy and a strong business model, and during the year began to see the benefits of investment made to fuel organic growth. The 2014/15 financial year has started well and with a strong team in place we look forward to driving growth in the business.

Jonathan Milner

Chief Executive Officer

8 September 2014

STRATEGY

1. Grow our core reagent business faster than the market

Significant medium and longer-term opportunities exist for revenue growth from our existing consumer base, as well as by attracting new consumers to our products.

We aim to drive this growth by:

· being more consumer-centric;

· focusing our marketing and product development launches on targets and research areas with the greatest scientific value to our consumers;

· using our flexible sourcing to find the best quality products;

· increasing focus on faster growing product lines where we have the greatest competitive advantage, such as RabMAb® primaries;

· continuing to build relationships with key opinion leaders and scientists 'at the bench' to guide our product development pipeline to meet current research needs; and

· improving our information-rich product datasheets by adding helpful and relevant scientific data to enable scientists to make informed product decisions.

Progress in the year

We have made substantial process on this initiative. During the year we:

· solidified our position as market leader in rabbit monoclonal antibodies through our RabMAb® technology and increased the conversion of consumers to its benefits. The resulting growth from RabMAb® products was 17.1% in the year on a constant currency basis, easily outstripping the broader primary antibody market growth;

· introduced over 1,730 RabMAb® products;

· launched a new marketing and innovation initiative to focus on high-value protein targets;

· added 11,521 new products in the year with a growing percentage focused on the research areas where we are building strength;

· introduced a new selection of Alexa Fluor® conjugated secondary antibodies to our existing range. Alexa Fluor® dyes guarantee bright staining and low background. The new colour variants were selected to provide an increased selection for multi-colour staining;

· hosted 17 scientific events and 15 webinars during the year, allowing us to connect to over 3,300 consumers. These conferences provide us the opportunity to increase awareness of our products and ensure we remain abreast of the work our consumers are undertaking; and

· added several new features to the website to improve consumers experience and engagement.

Focus for 2014/15

Focus on developing high-quality products to high-value targets, particularly where we can leverage our proprietary RabMAb® technology.

Continue to grow the catalogue around research areas which we believe offer the greatest market potential.

Establish linkages across our product categories to increase the purchase of non-primary antibody products.

2. Establish new growth platforms

There are opportunities to drive our growth by adding new product ranges or services which are attractive to our consumer base, either in the same or adjacent segments in which we operate, and by extending our geographic penetration.

Abcam has established a market-leading position within the primary antibody research market; however, there are segments of this market where we see lower penetration. As such there is greater opportunity for growth from understanding the consumer's needs within each segment of the market and tailoring our product offering accordingly.

Furthermore, there are several product segments adjacent to the research primary antibody market in which we are under penetrated. There is an opportunity to increase our market share in these areas by utilising our product sourcing capability to develop and launch high quality, innovative new products for our consumer base.

Progress in the year

In 2013/14 sales from our kits and assays grew by 42.3% on a constant currency basis over the prior year, with over 770 high-quality products added to this line including innovations such as SimpleStep ELISE™.

We launched a new range of SimpleStep ELISA™ kits in September 2013. These kits have a greatly simplified protocol when compared with standard multi-step ELISAs, providing significant time savings and ease of use. The kits require no specialised training or instrumentation and, in contrast to standard ELISA, achieve increased accuracy by reducing the number of sample handling steps. In addition, a more efficient in-solution binding process provides superior sensitivity and specificity. We added 150 of these kits to our catalogue during the year.

Following the conclusion of a large consumer intelligence gathering exercise, involving over 14,000 life science researchers, we have segmented our consumers into several distinct groupings, within each of which we assess that we have varying levels of market share. Each segment has different product and service needs, and during the year we have begun to differentiate our product offering and marketing messages to meet the needs of these segments.

To support our focus on increasing geographic reach and improving distribution channels to rapidly growing markets, we opened a new office in Shanghai, China, in February 2014. The office houses consumer and technical support functions provided by native Mandarin speakers, as well as a full logistics operation offering both control and speed advantages over our previous bonded warehouse arrangement. This means that consumers now benefit from improved delivery times and service levels. The proximity of the office also means we can support consumers with more specific needs through our extensive range of products and services. Since its opening we have reached a headcount of 13 staff by the year end.

Focus for 2014/15

Continue to use our data and consumer insight to prioritise which kits and assays to provide and incorporate our RabMAb® technology into new product development where appropriate.

Make market share gains in activity assays, proteins and peptides, immunoassays, and research biochemicals.

Continue penetration into market segments where Abcam has a lower share of consumer spend.

Use our office in Shanghai to drive the growth of revenues from China.

3. Scale organisation capabilities

Our people are one of our major assets and are instrumental in creating an efficient and scalable organisation. We aim to attract and retain the best people, empower them to succeed and build the capabilities necessary to deliver our strategy.

We believe that staff engagement is important to the success of our business. We invest in our employees by hiring a mix of graduates and industry experts, developing them and providing a supportive culture to maximise their capability and potential.

We also strive to maintain a lean and efficient organisation by streamlining and investing in our processes to ensure we meet consumers' needs in terms of breadth, quality and availability of products.

By ensuring we leverage our operational efficiency and cost-effectiveness, we aim to deliver consistent profitable growth.

Progress in the year

We have undertaken a significant internal re-organisation in 2013/14, the result of which is that the Group now has a single global management structure. By providing clearer accountability, closer working relationships and tight alignment to our strategic objectives, we believe that the new structure will make a significant contribution to our future success.

To support our organic growth initiatives we have also invested in the quality of our senior management by recruiting high-calibre and experienced talent to head up each of our major product categories. This talent recruitment drive extended across the organisation to ensure we had the right people in place to support our continued organic growth plans. In addition, we implemented a common set of cultural behaviours to help ensure we retain our dynamic and positive culture as we grow.

We have also invested further in our core IT systems to ensure they support the delivery of our next stage of growth.

Focus for 2014/15

Implement a common set of performance targets and merit-based incentives across the Group to reward success.

Invest in our consumer relationship management software, to support our increased focus on consumers, and our accounting software, to ensure the continued provision of timely and accurate financial data as we grow.

Implement a multi-year review of our IT platform to ensure that it supports our objectives and provides the necessary flexibility and speed of delivery as our business develops.

Began work on relocating our manufacturing facility in Hangzhou to improve our capabilities and enable more targeted production in line with our strategy.

Conclude planning for a new site in the UK as we look to combine our current three offices/laboratories in Cambridge into one consolidated headquarters.

4. Sustain attractive economics

By ensuring that we leverage our operational efficiency and cost-effectiveness, we will be able to deliver sustainable, profitable growth.

We aim over the longer term to grow our revenues in excess of our cost base and invest only in high-return projects.

Progress in the year

During the year we restructured our cost base to maximise cost-effectiveness.

Catalogue revenues grew by 10.0% on a constant currency basis, which outpaced the growth seen in the broader markets. For example, funding for life science research in the US declined 5.0% in US fiscal year 2013 and increased by 3.2% in US fiscal year 2014; however, our US revenues grew by 4.5% on a constant currency basis in the year to June 2013 and 8.6% for the year to June 2014.

Adjusted operating profit margins in 2013/14 reduced to 36.4% from 38.1%, reflecting the additional selective investment made to support the organic growth initiatives. We attained a return on capital employed (ROCE) of 24.5%.

Gross margins were broadly flat as the positive impact from product mix, pricing and inventory management was more than offset by the negative impact from foreign exchange rates.

We remain highly cash generative, with £51.2m of cash flow from operations in the year. Closing balance sheet cash was £56.9m without any debt. Our strong balance sheet provides us with the flexibility to execute on investment and acquisition opportunities should they arise.

Focus for 2014/15

We remain focused on generating strong revenue growth above that of our markets. We will continue to make investments that we feel will drive medium to long-term revenue growth. Shareholder return is important as is ensuring a healthy return on capital employed.

5. Selectively pursue partnerships and acquisitions

To supplement the other components of our strategy we will increasingly seek to work with partners that offer complementary products in the life science market. These partnerships may take a wide range of forms from licensing and co-developments through to equity investments and acquisitions.

We seek to work with partners who share our mission of enabling researchers to discover more, as well as working directly with collaborators to enable their research.

Progress in the year

Within the year we worked with over 20 research collaborations across a host of activities such as product co-development, product validation and research sponsorship.

Negotiations with Cell Marque during the year resulted in the signing of a global strategic marketing agreement with them after the year end. Under this agreement Abcam gains access to Cell Marque's extensive distribution channel and sales force into the IVD market to sell our IVD grade products derived from our RabMAb® technology. We are delighted at the opportunity to work so closely with one of the world's largest IVD distributors.

Focus for 2014/15

Actively seek out new partnerships and investment opportunities that support our strategy and leverage our competitive advantage.

Continue to work with collaborators on the co-development of innovative products which enable our consumers to discover more.

KEY PERFORMANCE INDICATORS

As part of Abcam's growth strategy, the executive management has refocused its attention on a narrower set of KPIs which best support the growth initiatives discussed earlier.

This is the first time these new KPIs have been implemented and, as such, no previous targets were established; however, looking forward we have outlined targets for the coming year. Success against these KPIs forms a component of the Board and senior management's bonus packages.

1 All growth numbers are on a constant currency basis

RabMAb® primaries revenue growth

During the year we saw a continued increase in demand from consumers for RabMAb® primaries. While the market still remains heavily based on traditional polyclonal and mouse monoclonal antibodies, we are seeing more consumers switching to RabMAb® primaries for the greater specificity and lot-to-lot consistency benefits they offer.

Within 2013/14 RabMAb® primaries contributed to 15.2% of Group product revenue and grew at 17.1% on a constant currency basis (2013: 33.5%). The reduction of revenue growth during the year was partly attributable to the impact of the distributor transitions in China, higher levels of promotional activity and some reclassification of products used for diagnostics purposes into the IVD area of our business. Going forward we see RabMAb® primaries as a large part of Abcam's growth strategy and an increasing contributor to the Group's revenue. We are targeting a growth rate of 15-20% for 2014/15 against a market growth of primary antibodies of around 3-5%.

Non-primaries revenue growth

Abcam grew the proportion of Group product revenues derived from products other than primary antibodies ('non-primaries') to 16.6% in 2013/14. This represented growth of 34.3% on a constant currency basis and continues a trend of high growth in recent years coming from this range of products. Going forward non-primaries revenue growth will be a key component of our success as we seek to attain similar levels of market penetration to that we enjoy in the primary antibody market.

As we move into 2014/15 we will continue to invest in new products and new platforms that are complementary to our consumer base and it is expected that a high portion of the impact from these initiatives will be felt within our non-primaries revenue. We are targeting a growth rate of 25-30% for 2014/15.

Net Promoter Score (NPS)

Abcam's vision is to be the brand most recommended by life science researchers. As such it is increasingly important that we focus on our consumers and listen to their feedback. At several points within the year we conduct formal consumer surveys to determine their likelihood of recommending Abcam's products and services to a colleague. The balance of detractors and promoters is then computed into an NPS using standard industry methods. As we seek to measure success against our vision our NPS will be an important metric. In 2013/14 our NPS for primary antibodies was 18% (2012/13: 19%).

To meet our targets for NPS next year Abcam will need to achieve a score of 20-22%.

Market position

Abcam operates in several different markets with varying market positions. Since its inception Abcam has risen to be the market leader in the research primary antibody market and our internal market intelligence suggests that when looking at the key markets in which we are focused, we have the following positions:

Number 1 in research primary antibodies

Number 3 in activity assays

Number 4 in proteins and peptides

At least number 5 in immunoassays

At least number 5 in research biochemicals

For the coming year we seek to maintain our number 1 position in research primary antibodies as well as to improve towards number 1 or number 2 in at least two other areas.

FINANCIAL REVIEW

While reported revenues for the year were up by 4.7% to £128.0m, stripping out the negative effect from the relative strengthening of Sterling during the year shows a much stronger underlying performance, with revenue growth from sales of products in our catalogue of 10.0%, or 8.6% overall. After increased investment in the business, adjusted profit before tax was £46.8m, which is marginally higher than last year (£46.6m).

As outlined in last year's report, the 2013/14 financial year has been one of investment in support of our growth strategy, the success of which demands that we listen to our consumers and ensure that we use the insights gained to shape our business. In practical terms this has meant increased headcount, particularly at the senior level, new product development activities and investment in operational assets such as the website and the new office in Shanghai.

At the same time we have been careful not to lose our focus on tight cost and cash control. As indicated at the time of our interims the Directors are recommending that the annual dividend for the current year should increase by 10.1%, which at 43.0% is above that of our recent policy of distributing 40% of adjusted post-tax profit. The Directors feel that this dividend is justified given the profit impact of the increased investment this year in organic growth initiatives aimed at delivering future profits, as well as the underlying financial strength and the continued cash-generative nature of the business.

The table below shows revenues, costs and expenses for the year, which have been adjusted to aid comparison by separately identifying the amortisation of acquisition-related intangible assets.

Adjusted income statement

Revenue

The relative strengthening of sterling during the year against the other currencies in which the Group trades has partly offset the underlying growth in revenues, particularly in the second half of the year. Consequently, while on a constant currency basis (in which we assume exchange rates had remained unchanged from 2012/13) product revenues grew by 10.0% and overall revenues by 8.6%, the reported revenue for the year of £128.0m represents 4.7% growth on the prior year.

Gross margins

Gross margins decreased slightly to 70.6% in 2013/14 from 71.0% in the prior year as the positive impact on margins from good inventory management and product mix was more than offset by the impact of exchange rates, mainly those of the US Dollar to Sterling. The majority of our cost of sales is denominated in US dollars (approximately 74.7%, versus 55.6% of sales in the year) and there has been a rapid and sustained weakening of the Dollar over the year. Given that there is often a delay between the timing of the purchasing or manufacturing stock and its subsequent sale, such movements have resulted in an adverse mismatch between the exchange rate used to translate Dollar denominated sales and that used to translate the associated cost of units sold.

Operating profit and expenses

Administration and management expenses

As foreshadowed last year, in order to further support the new activities being undertaken to drive medium and long-term organic growth, investment has been made in 2013/14 which has increased the cost base. The table below identifies these costs and shows that after adjusting for them, non-recurring items in 2012/13, restatements to allow for exchange rate movements and the gains arising on forward selling currency contracts (as described in note 21), the base cost of the business in 2012/13 increased by 6.4% in 2013/14, which is below the growth in revenues.

Change in administration and management expense

Research and development expenditure

Research and development (R&D) expenditure relates to the development of new products, as well as costs incurred in searching for and developing production process improvements. These costs do not meet the requirements to be capitalised as an intangible asset and are therefore expensed through the income statement as incurred.

Total R&D expenditure increased to £10.1m in the year from £7.9m in 2012/13, or to £8.3m from £6.2m excluding the amortisation of acquisition-related intangibles. This reflects increased investment in new product development as part of our organic growth strategy, particularly around products utilising RabMAb® technology, expanding the range of directly conjugated antibodies and in-house development of immunoassays. Many of these products are against high-value targets which present additional manufacturing challenges.

Earnings and tax

The adjusted profit before tax was £46.8m on which the effective tax rate was 22.8%, which was lower than the 24.6% reported last year due to a reduction in the UK corporation tax rate and the full year effect of the Group re-organisation that took place in 2012/13. After taking into account the deferred tax impact of acquisition-related intangible amortisation, the reported effective tax rate was 21.8% (2012/13: 23.9%).

Balance sheet and cash flow

Goodwill and other intangibles

Goodwill at the year end was £73.5m versus £82.0m in the prior year. The decrease is due to exchange rate movements arising because the functional currency of the acquired companies to which the goodwill relates is predominately US dollars.

The decision was taken in 2012/13, following the changes made post acquisition to how MitoSciences, Ascent Scientific and Epitomics were structured and integrated within the Group, that it was appropriate to reallocate the goodwill arising from those acquisitions to a single cash-generating unit (CGU), which would reflect the re-organised business structure. Goodwill is not amortised under IFRS but is subject to impairment review at least on an annual basis. Consequently, during the year, the Directors performed a review which involved making various assumptions regarding the future performance of the business. After considering various scenarios that could reasonably occur, the Directors concluded that no impairment was required. For more details, please see note 12 to the financial statements.

Other intangible assets at 30 June 2014 were £30.2m compared with £33.1m at 30 June 2013. This movement primarily reflects the amortisation of the intangible assets offset by the additions to capitalised software costs from the investment in our core IT systems and the impact of exchange rates on non-sterling denominates assets, which was partly described in more detail above.

Following a review of software costs previously capitalised an impairment charge of £0.5m was taken in the year to reflect those elements which as our strategy has developed now relate to work which will no longer recover its carrying value. Other intangible assets are amortised over their estimated useful lives, and the amortisation of acquisition-related intangible assets has been added back in arriving at adjusted profit, as outlined above.

Capital expenditure

Additions of property, plant and equipment and intangible assets totalled £7.4m (2012/13: £7.3m).

This reflects continued investment in support of our organic growth strategy. The major items include:

· continuation of the core IT investment that began in 2011/12 to support the next stage of Abcam's growth. A total of £3.5m was capitalised in the year, including £0.8m of internal salary cost;

· development of new hybridomas using our RabMAb® technology of £1.5m, with a further £0.3m expenditure on hybridomas under construction;

· office equipment expenditure of £0.8m. This is an increase of £0.4m over the prior year, mainly due to the opening of our Shanghai office in February 2014; and

· investment in laboratory equipment of £0.7m.

Cash flow

Our track record of strong cash generation continued in the year and we finished the period with net cash and term deposits of £56.9m (2012/13: £38.3m) and no bank debt (2012/13: £nil).

Cash generated by operations was £51.2m, or 39.9% of Group revenue (2012/13: £51.8m, 42.4% of revenue), as working capital again contributed positively to cash flow, albeit the positive inflow was £0.9m lower than last year. The overall net movement in cash and term deposits in 2013/14 was £18.6m (2012/13: £20.8m).

Looking forward

It is encouraging to see the early signs of increased organic growth coming through in 2013/14. In the coming year we will continue to invest in areas such as product development, eCommerce, marketing and infrastructure. We believe that these investments will drive sales in the medium to long term and provide a healthy return.

As we grow and reinvest in our business we will continue to focus on tight cost management and effective financial controls to ensure we sustain attractive economics.

Jeff Iliffe

Chief Financial Officer

8 September 2014

Consolidated income statement

For the year ended 30 June 2014

Consolidated statement of comprehensive income

For the year ended 30 June 2014

Reconciliation of adjusted financial measures

For the year ended 30 June 2014

Balance sheets

At 30 June 2014

The financial statements of Abcam plc, registered number 3509322, were approved by the Board of Directors and authorised for issue on 8 September 2014.

They were signed on its behalf by:

Jeff Iliffe

Director

Consolidated statement of changes in equity

For the year ended 30 June 2014

1 Exchange differences on translation of overseas operations.2 IFRS 2 charge for fair value of share-based options and awards.3 Gains and losses recognised on cash flow hedges.4 Portion of deferred tax asset arising on outstanding share options and share options exercised.

Company statement of changes in equity

For the year ended 30 June 2014

1 IFRS 2 charge for fair value of share-based options and awards.2 Gains and losses recognised on cash flow hedges.3 Portion of deferred tax asset arising on outstanding share options and share options exercised.

4 Profit for the prior year includes £13,973,000 of non distributable earnings relating to the gain on disposal resulting from an intra group transfer of a subsidiary undertaking (see note 15 for further details).

Cash flow statements

For the year ended 30 June 2014

Reconciliation to total cash and cash equivalents and term deposits

Notes to the financial statements

For the year ended 30 June 2014

1. General information

Abcam plc (the Company) is incorporated in the UK under the Companies Act 2006. The address of the registered office is 330 Cambridge Science Park, Milton Road, Cambridge CB4 0FL, UK.

The Group is a producer and distributor of high-quality research-grade antibodies and associated protein research tools. The Group operates through its ultimate parent company Abcam plc and through its wholly owned subsidiaries Abcam Inc, Abcam KK, Abcam (Hong Kong) Limited, Ascent Scientific Limited, Abcam Trading (Shanghai) Co. Limited, Epitomics Inc, Epitomics (Hangzhou) Biotechnology Co. Limited and MitoSciences Inc, allowing it to serve a global customer base of over 100 countries.

2. Adoption of new and revised standards

Standards affecting the financial statements

In the current year, the following new and revised Standards and Interpretations have been adopted and have affected the amounts reported in these financial statements:

IFRS 13 'Fair value measurement'. This standard aims to improve consistency and reduce complexity by providing a precise definition of fair value and a single source of fair value measurement and disclosure requirements for use across IFRSs.

Standards not affecting the reported results nor the financial position

At the date of authorisation of these financial statements, the following Standards and Interpretations which have not been applied in these financial statements were in issue but not yet effective (and in some cases had not yet been adopted by the EU):

The Directors do not expect that the adoption of these Standards and Interpretations in future periods will have a material impact on the financial statements of the Group.

3. Significant accounting policies

Basis of accounting

The annual financial statements of Abcam plc are prepared in accordance with International Financial Reporting Standards (IFRS) and IFRS Interpretations Committee (IFRS IC) interpretations as adopted by the European Union and the Companies Act 2006 applicable to companies reporting under IFRS and comply with Article 4 of the EU IAS Regulation.

After making enquiries, the Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. For this reason, they continue to adopt the going concern basis in preparing the financial statements.

The financial statements have been prepared on the historical cost basis, except for the revaluation of certain financial instruments. The Group financial statements are presented in sterling and all values are rounded to the nearest thousand pounds (£000) except when otherwise indicated.

The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the preparation of the statements for the year ended 30 June 2013 except where disclosed otherwise in this note.

Basis of consolidation

The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company made up to 30 June each year. Control is achieved where the Company has the power to govern the financial and operating policies of an investee entity so as to obtain benefits from its activities.

Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies in line with those used by the Group. All intra-group transactions, balances, income and expenses are eliminated on consolidation.

Business combinations

Business combinations are accounted for using the acquisition method. The consideration transferred for the acquisition of a subsidiary is the fair values at the date of exchange of the assets transferred, the liabilities incurred and the equity interests issued by the Group. Acquisition-related costs are expensed as incurred.

Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination that meet the recognition criteria under IFRS 3 (2008) are measured at their fair values at the date of acquisition, except that:

• deferred tax assets or liabilities and liabilities or assets related to employee benefit arrangements are recognised and measured in accordance with IAS 12 Income Taxes and IAS 19 Employee Benefits respectively;

• liabilities or equity instruments relating to the replacement by the Group of an acquiree's share-based payment awards are measured in accordance with IFRS 2 Share-based Payment; and

• assets (or disposal groups) that are classified as held for sale in accordance with IFRS 5 Non-current Assets Held for Sale and Discontinued Operations are measured as per that Standard.

Investments in subsidiaries are accounted for at cost less impairment. Where applicable, cost is adjusted to reflect changes in consideration arising from contingent consideration amendments.

The Directors have reconsidered the treatment adopted in 2010/11 and 2011/12 and have concluded that the option to recognise share premium on shares issued as part consideration for acquisitions was not available therefore merger relief has been applied with the merger reserve being created. However as there is no impact on net assets, profit or cash flows, balance sheets as at 30 June 2012 have not been presented.

Goodwill

Goodwill represents the excess of the cost of an acquisition over the fair value of the Group's share of the net identifiable assets of the acquired subsidiary at the date of acquisition. Goodwill is reviewed and tested annually for impairment and carried at cost less accumulated impairment losses. Impairment losses on goodwill are not reversed in subsequent periods. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold.

Goodwill is allocated to cash-generating units for the purpose of impairment testing. The allocation is made to those cash generating units or groups of cash generating units that are expected to benefit from the business combination in which the goodwill arose. Cash-generating units to which goodwill has been allocated are tested for impairment annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro rata on the basis of the carrying amount of each asset in the unit.

In accordance with IAS 21 goodwill arising on the acquisition of a foreign operation and any fair value adjustments to the carrying amounts of assets and liabilities arising on the acquisition of that foreign operation are treated as assets and liabilities of that foreign operation and as such are translated at the relevant foreign exchange rate at the balance sheet date.

Revenue and income recognition

Revenue is measured at the fair value of the consideration received or receivable and represents amounts receivable for goods and services provided in the normal course of business, net of discounts, VAT and other sales-related taxes.

Sales of goods are recognised when goods are despatched and title has passed.

Custom service revenue is recognised proportionately when the outcome of each discrete stage of the contract can be estimated reliably and is based on the stage of completion of the contract activity per agreed milestones set out in the contract. Where the outcome cannot be estimated reliably, revenue is recognised to the extent of costs incurred where it is probable these will be recovered. In instances where it is probable that the costs will be in excess of the contract revenue, the expected loss is recognised as an expense immediately.

Licence fee income is recognised on delivery of the licensed technology where the Group's continued performance or future research and development services are not required. Payments received prior to this are recorded as deferred income.

Royalty revenue is recognised based on the contractual terms and the substance of the agreements with the counterparty.

Interest income is accrued on a time basis, by reference to the principal outstanding and the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset's net carrying amount.

Dividend income from investments is recognised when the shareholders' rights to receive payment have been established.

Revenue derived from the Company's conferences is recognised when the conference is held; however, it is not material.

Leasing

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.

Rentals payable under operating leases are charged to income on a straight line basis over the term of the relevant lease. Benefits received and receivable as an incentive to enter into an operating lease are also spread on a straight-line basis over the lease term.

Foreign currencies

The individual financial statements of each Group company are presented in the currency of the primary economic environment in which it operates (its functional currency). For the purposes of the consolidated financial statements, the results and financial position of each Group company are expressed in sterling, which is the functional currency of the Company and the presentation currency for the consolidated financial statements.

In preparing the financial statements of the individual companies, transactions in currencies other than the entity's functional currency (foreign currencies) are recorded at the rates of exchange prevailing at the dates of the transactions. At each balance sheet date, monetary assets and liabilities that are denominated in foreign currencies are retranslated to the rates prevailing at the balance sheet date. Non-monetary items carried at fair value that are denominated in foreign currencies are translated at the rates prevailing at the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.

Exchange differences are recognised in profit or loss in the period in which they arise except for:

• exchange differences on transactions entered into to hedge certain foreign currency risks (see below under financial instruments/hedge accounting); and

• exchange differences on monetary items receivable from or payable to a foreign operation for which settlement is neither planned nor likely to occur, which form part of the net investment in a foreign operation, and which are recognised in the foreign currency translation reserve and recognised in profit or loss on disposal of the net investment.

For the purpose of presenting consolidated financial statements, the results of the operations of the Company's overseas subsidiaries are translated at the monthly exchange rates during the period and their balance sheets at the rates prevailing at the balance sheet date. Exchange differences arising on the translation of the opening net assets and results of operations are classified as equity and recognised in the Group's foreign currency translation reserve.

Retirement benefit costs

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due. Payments made to state managed retirement benefit schemes are dealt with as payments to defined contribution schemes where the nature of the Group's obligations under the schemes is equivalent to those arising in a defined contribution retirement benefit scheme. The Group has no further obligations once the contributions have been paid.

Taxation

The tax expense represents the sum of the tax currently payable and deferred tax.

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement because it excludes some items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Group's liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date.

Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amount of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from the initial recognition of goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.

Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.

The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the income statement, except where it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Group intends to settle its current tax assets and liabilities on a net basis.

Property, plant and equipment

Property, plant and equipment are stated at cost less accumulated depreciation and any recognised impairment loss. Cost includes the original purchase price of the asset and the costs attributable to bringing the asset to its working condition for its intended use. Depreciation is charged so as to write off the cost of assets over their estimated useful lives, using the straight-line method, on the following bases:

Office equipment, fixtures and fittings Two to five years

Laboratory equipment One to five years

Computer equipment Three years

Hybridomas Three to eight years

Motor vehicles Five years

The gain or loss arising on the disposal or retirement of an asset is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in income. Residual values of assets and their useful lives are reviewed, and adjusted if appropriate, at each balance sheet date.

Intangible assets

Payments made to acquire software, distribution rights, capitalised development work and contract based intangibles from third parties are capitalised at cost and amortised on a straight-line basis over their estimated minimum useful lives. The principal economic lives used for this purpose are as follows:

Up front licence fees Three years

Distribution rights One to ten years

Software One to five years

Contract based Term of contract

Customer relationships Seven to ten years

Patents, technology and know-how Five to fifteen years

Trade names Eight years

Expenditure on development activities including internally generated intangible assets is recognised as an asset if and only if it meets the recognition criteria set out in IAS 38 Intangible Assets. Expenditure on research activities is recognised as an expense in the period in which it is incurred.

Impairment of tangible and intangible assets excluding goodwill

At each balance sheet date, the Group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any).

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount. An impairment loss is recognised as an expense immediately.

Inventories

Inventories are stated at the lower of cost and net realisable value. Cost comprises direct materials and, where applicable, direct labour costs and an attributable portion of production overheads that have been incurred in bringing the inventories to their present location and condition. Cost is calculated using the standard cost method. Net realisable value represents the estimated selling price less all estimated costs of completion and costs to be incurred in marketing, selling and distribution. Provision is made for obsolete, slow moving or defective items where appropriate.

Financial instruments

Financial assets and financial liabilities are recognised on the Group's balance sheet when the Group becomes a party to the contractual provisions of the instrument.

Available-for-sale financial assets

The Group has an investment in unlisted shares which is not traded in an active market but is classified as an available-for-sale financial asset and stated at cost less any provision for impairment.

Trade and other receivables

Trade receivables are initially recognised at fair value and subsequently held at amortised cost, less provision for impairment. Appropriate allowances for estimated irrecoverable amounts are recognised in the income statement when there is objective evidence that the asset is impaired. When a trade receivable is considered uncollectable, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are credited against the allowance account. Changes in the carrying amount of the allowance account are recognised in the income statement.

Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and demand deposits and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value.

Term deposits

Term deposits represent bank deposits and a charitable bond all with an original maturity of over three months.

Financial liabilities and equity

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the Group after deducting all of its liabilities. The accounting policies adopted for specific financial liabilities and equity instruments are set out below.

Trade payables

Trade payables are initially recognised at fair value and subsequently held at amortised cost.

Equity instruments

Equity instruments issued by the Company are recorded at the proceeds received, net of direct issue costs.

Derivative financial instruments

Forward contracts are used by the Group to manage its exposure to the risk associated with the variability in cash flows in relation to both recognised assets or liabilities and forecast transactions.

Derivatives are initially recognised at fair value at the date a derivative contract is entered into and are subsequently remeasured to their fair value at each balance sheet date. A derivative with a positive fair value is recognised as a financial asset whereas a derivative with a negative fair value is recognised as a financial liability. The resulting gain or loss is recognised in the income statement immediately unless the derivative is designated and effective as a hedging instrument, in which event the timing of the recognition in the income statement depends on the nature of the hedge relationship.

A derivative is presented as a non-current asset or non-current liability if the remaining maturity of the instrument is more than twelve months and it is not expected to be realised or settled within twelve months. Other derivatives are presented as current assets or current liabilities.

Hedge accounting

The Group designates certain derivatives as either hedges of highly probable forecast transactions or hedges of foreign currency risk of firm commitments (cash flow hedges).

At the inception of the hedge relationship, the Group documents the relationship between the hedging instrument and the hedged item, along with its risk management objectives and its strategy for undertaking various hedge transactions. Furthermore, at the inception of the hedge and on an ongoing basis, the Group documents whether the hedging instrument that is used in a hedging relationship is effective in offsetting changes in fair values or cash flows of the hedged item.

Cash flow hedges

The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges are deferred in equity. The gain or loss relating to the ineffective portion is recognised immediately in profit or loss and is included in the 'administration and management expenses' line of the income statement.

Amounts deferred in equity are recycled in the income statement in the periods when the hedged item is recognised in profit or loss, in the same line of the income statement as the recognised hedged item.

Hedge accounting is discontinued when the Group revokes the hedging relationship, the hedging instrument expires or is sold, terminated or exercised, or no longer qualifies for hedge accounting. Any cumulative gain or loss deferred in equity at that time remains in equity and is recognised when the forecast transaction is ultimately recognised in profit or loss. When a forecast transaction is no longer expected to occur, the cumulative gain or loss that was deferred in equity is recognised immediately in profit or loss.

Share-based payments

The Group has applied the requirements of IFRS 2 Share-based Payment. In accordance with IFRS 1, IFRS 2 has been applied to all grants of equity instruments after 7 November 2002 that were unvested at 1 July 2006.

Incentives in the form of shares are provided to employees under share option, SIP and LTIP schemes. Equity-settled share-based payments are measured at fair value (excluding the effect of non-market based vesting conditions) at the date of grant. The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight line basis over the vesting period, based on the Group's estimate of the number of shares that will eventually vest.

Fair value of options issued under the Group's share option schemes is measured by the use of the Monte Carlo Simulation.

Fair value of the awards under the Group's LTIP is measured by the use of the Monte Carlo Simulation for the TSR portion and the Black Scholes Model for the EPS portion.

Fair value of an equity settled payment under the SIP is measured as the face value of the award on the date of grant.

The expected life used in the model has been adjusted, based on management's best estimate, for the effects of non- transferability, exercise restrictions and behavioural considerations. Charges made to the income statement in respect of share-based payments are credited to the share-based payments reserve.

At the end of each reporting period, the Group revises its estimates of the number of options that are expected to vest based on the non-market vesting conditions. It recognises the impact of the revision to original estimates, if any, in the income statement, with a corresponding adjustment to equity.

The grant by the Company of options over its equity instruments to the employees of subsidiary undertakings in the Group is treated as a capital contribution. The fair value of employee services received, measured by reference to the grant date fair value, is recognised over the vesting period as an increase to investment in subsidiary undertakings, with a corresponding credit to equity in the parent entity accounts.

When the options are exercised, the company issues new shares. The proceeds received net of any directly attributable transaction costs are credited to share capital (nominal value) and share premium.

The Group operates an employee share benefit trust as part of its incentive plans for UK-based employees. All assets and liabilities of the trust are recorded in the balance sheet as assets and liabilities of the Company until such time as the assets are awarded to the beneficiaries. All income and expenditure of the trust is similarly brought into the results of the Company.

Own shares

Own equity instruments which are acquired are recognised at cost and deducted from equity. No gain or loss is recognised in the income statement on the purchase, sale, issue or cancellation of the Group's own equity instruments. Any difference between the carrying amount and the consideration is recognised in reserves.

4. Critical accounting judgements and key sources of estimation uncertainty

In the application of the Group's accounting policies, which are described in note 3, the Directors are required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities as at the date of reporting the financial statements, and the reported amounts of revenues and expenditure during the year. These estimates and judgements are continually evaluated and based on historical experiences and other factors, including expectations of future events that are believed to be reasonable under the circumstances prevailing at that time. In preparation of the consolidated financial statements, estimates and assumptions have been made by the Directors concerning the fair value of share options, the estimated useful lives of fixed assets, accruals and provisions required, the carrying value of investments, the recoverability of deferred tax assets, the carrying value of goodwill and other intangible assets and other similar evaluations. Actual amounts may differ from those estimates.

Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

Key sources of estimation uncertainty

The key assumptions concerning the future, and other sources of estimation uncertainty at the balance sheet date that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.

Impairment of intangibles

As part of the business combinations the Group acquired the following intangible assets: licence fees, customer relationships, patents, trade names, technology and know how. Further to this the Group capitalises IT development costs relating to the rebuilding of the Group's IT core systems, since these costs meet the recognition criteria of IAS 38. The Group reviews the carrying amount of all intangible assets held at each balance sheet date and an impairment was considered necessary for a specific IT project not considered appropriate for use in the business. An impairment of the carrying value of £454,000 has been recognised in the year (2013: £nil).

Impairment of goodwill

The Group determines whether goodwill is impaired on at least an annual basis or more frequently when there are indications of possible impairment. The impairment review requires a value in use calculation of the cash generating units to which the goodwill is allocated. In estimating the value in use, management is required to make an estimate of the expected future cash flows attributable to the cash generating unit and to choose an appropriate discount rate to calculate the present value of those cash flows. The carrying amount of goodwill at 30 June 2014 was £73,549,000 (2013: £81,954,000). Further details are given in note 12.

Property, plant and equipment and intangible assets carrying value

Property, plant and equipment and intangible assets (excluding goodwill) represents 18.7% (2013: 20.3%) of the Group's total assets; estimates and assumptions made may have a material impact on their carrying value and related depreciation and amortisation charge. See note 13 'Intangible assets' and note 14 'Property, plant and equipment' for further details.

Valuation of own manufactured inventory

The standard costs used for the valuation of own manufactured inventory require a number of assumptions concerning the allocation of overheads. These assumptions are based primarily on management's estimates of time spent in each relevant area of activity and normal levels of activity.

Provision for slow moving or defective inventory

The provision for slow moving inventory is based on management's estimation of the future sales of each of the group's products over the next five years (or period from the balance sheet date to the expiry date of the product, whichever is the shorter), taking into account actual sales of those products in previous years and applying an assumed growth rate based on historical trends where available.

Should forecast sales (incorporating the projected growth rates) differ from those estimated by management, both the level of provision against existing inventory and the rates of provision applied to inventory in future periods would need to be revised.

Provisions for income taxes

The Group is subject to income taxes in various jurisdictions. Significant judgement is employed to determine the income tax provision on a global basis. There are numerous transactions and calculations for which the ultimate tax determination is uncertain during the ordinary course of business. The Group recognises liabilities for anticipated tax audit issues based on estimates of whether additional taxes will be due. Where the final tax outcome of these matters differs from amounts initially recorded, such differences will impact the income tax and deferred tax provisions in the period in which such determination is made.

5. Operating segments

Products and services from which reportable segments derive their revenues

The Directors consider that there are no identifiable business segments that are engaged in providing individual products or services or a group of related products and services that are subject to risks and returns that are different to the core business. The information reported to the Group's Chief Executive Officer, who is considered the chief operating decision maker, for the purposes of resource allocation and assessment of performance is based wholly on the overall activities of the Group. The Group has therefore determined that it has only one reportable segment under IFRS 8, which is 'sales of antibodies and related products'. The Group's revenue and results and assets for this one reportable segment can be determined by reference to the Group's income statement and balance sheet.

The Group has no individual product or customer which comprises more than 10% of its revenues.

Geographical information

The Group's revenue from external customers and information about its non-current segment assets (excluding deferred tax and derivative financial instruments) by geographical location is detailed below:

Revenues are attributed to countries on the basis of the customer's location. No country included within 'Other countries' contributes more than 5% of the Group's total revenue.

6. Profit for the year

Profit for the year has been arrived at after charging/(crediting):

7. Auditor's remuneration

A detailed analysis of the auditor's remuneration on a worldwide basis is provided below:

* This relates to the interim review.

The auditor's remuneration for the year ended 30 June 2014 relates to PricewaterhouseCoopers LLP following its appointment as auditor during the year. The comparatives relate to the previous auditor, Deloitte LLP. Details on the Company's policy on the use of the auditor for other services are set out in the Audit Committee Report.

8. Employees and remuneration

The average monthly number of employees (including Executive Directors) was:

Their aggregate remuneration comprised:

* £784,000 (2013: £434,000) relates to Group staff costs directly attributable to the rebuild of the IT core systems being capitalised as part of an internally generated intangible asset under IAS 38 (see note 13).

The remuneration of the Directors is set out in the Directors' Remuneration Report.

9. Net finance income

10. Taxation

UK corporation tax is calculated at 22.5% (2013: 23.75%) of the estimated assessable profit for the year. Taxation for other jurisdictions is calculated at the rates prevailing in the respective jurisdictions.

The Finance Act 2013, which provided for a reduction in the main rate of UK corporation tax to 21% effective from 1 April 2014 and a further reduction to 20% from 1 April 2015, was substantively enacted in July 2013. This further rate reduction has been reflected in the calculation of deferred tax at the balance sheet date.

The charge for the year can be reconciled to the profit per the income statement as follows:

11. Earnings per share

The calculation of the basic and diluted EPS is based on the following data:

Basic EPS is calculated by dividing the earnings attributable to the owners of the parent by the weighted average number of shares outstanding during the year. Diluted EPS is calculated on the same basis as basic EPS but with a further adjustment for the weighted average shares in issue to reflect the effect of all dilutive potential ordinary shares. The number of dilutive potential ordinary shares is derived from the number of share-based options and awards granted to employees where the exercise price is less than the average market price of the Company's ordinary shares during the year and where it is considered performance conditions will be met.

Adjusted earnings per share

The calculation of adjusted EPS excluding integration costs and amortisation of acquisition-related intangible assets is based on earnings of:

The denominators used are the same as those detailed above for both basic and diluted earnings per share.

Adjusted EPS after adding back acquisition costs and amortisation of associated intangible assets:

The adjusted EPS information is considered to provide a fairer representation of the Group's trading performance.

12. Goodwill

Goodwill acquired in a business combination is allocated, at acquisition, to the cash-generating units (CGUs) that are expected to benefit from that business combination. The carrying amount of goodwill has been allocated as follows:

* Goodwill is converted at the exchange rate on the date of acquisition and retranslated to the balance sheet rate.

Following the acquisitions of Mitosciences, Ascent and Epitomics there has been considerable change in the way these entities are structured and integrated within the Abcam group. These changes include redirecting sales through the Abcam platform and the centralisation of the marketing, technical and operational support. Consequently the discrete financial information which is available for an individual entity does not reflect the true substance of the performance of that entity and the value being added. This means it is not possible to accurately assess the fair value in use of the acquired entities which formerly constituted the separately identifiable CGUs to determine whether or not there is an indication of goodwill impairment.

IAS 36 requires that following a reorganisation in the business which results in a change in the composition of CGUs, goodwill should be reallocated to the units affected. Considering the changes above, in the prior year the Directors considered it appropriate to reallocate the goodwill arising from the acquisitions to a single CGU, which would reflect the reorganised business structure. This CGU is tested for impairment on a group wide basis using the future forecast cash flows arising from the Abcam business as a whole.

The Group performs an annual test for goodwill impairment or more frequently if there are any indications that goodwill might be impaired.

The recoverable amount of the CGU is determined from value in use calculations. The key assumptions considered most sensitive for the value in use calculations are those regarding the discount rates, growth rates and anticipated movements in selling prices and direct costs during the period.

Management has projected cash flows based on financial forecasts over a period of four years. No growth rate has been used in the extrapolation of cash flows beyond the four years. A discount rate of 11% has been estimated using pre-tax rates that reflect current market assessments of the time value of money and the risks specific to the CGU.

Management has performed sensitivity analysis on the key assumptions mentioned above. Based on the results of this analysis, management is satisfied that the recoverable amount of goodwill exceeds its carrying amount. As such, no impairment of goodwill has been recognised at the balance sheet date.

Due to the headroom which exists between the recoverable amount and the carrying value there is currently no reasonable possible change in any of these key assumptions which would cause the CGU's carrying amount to exceed its recoverable amount.

13. Intangible assets

Group