Abcam delivers sustained double digit revenue growth whilst investing in the future

Abcam plc, a global supplier of life science research tools, announces its interim results for the six month period ended 31 December 2015.

Revenue growth of 17.2% on a constant currency basis and 18.0% on a reported basis to £78.8m (H1 2015: £66.7m). Catalogue revenue growth of 15.7% on a constant currency basis and 16.1% on a reported basis to £72.9m (H1 2015: £62.7m). Gross margin of 69.3% (H1 2015: 70.4%), reflecting currency headwinds in H1 2016.

As anticipated, strategic investment to drive future growth has resulted in an adjusted operating margin* of 30.7% (H1 2015: 35.4%). Reported operating margin was 26.7% (H1 2015: 32.8%). Adjusted EBITDA* margin of 34.4% (H1 2015: 38.8%) and 32.5% (H1 2015: 38.6%) on a reported basis. Profit before tax (PBT) on an adjusted basis* was £24.3m (H1 2015: £23.8m) and reported PBT was £20.9m (H1 2015: £22.1m). Adjusted diluted earnings per share (EPS)* increased by 2.8% to 9.64 pence (H1 2015: 9.38 pence). Reported diluted EPS decreased by 4.9% to 8.36 pence (H1 2015: 8.79 pence). Interim dividend increased by 2.8% to 2.354 pence (2015: 2.29 pence).

As previously guided, the plan for a step change in investment to scale the business for future sustained growth is progressing well. Anticipated capital investment in systems and processes of £15m to £19m over the next two years.

* Excluding acquisition costs, acquisition-related intangible amortisation, acquisition integration costs and the initial incremental costs associated with the investment in systems and processes. In the case of profit before tax and diluted earnings per share also excluding the expense related to the unwinding of the discount applied on deferred consideration for AxioMx. See Performance in the Period section below for more detail.

Operational Highlights

• RabMAb® and non-primary antibody revenues up by over 32% to £12.8m and £14.3m respectively, demonstrating progress in executing our strategy, delivering at the top end of, or above, our KPI targets.
• Acquisition of AxioMx and integration of its technology platform progressing well, adding innovative products to our portfolio of recombinant monoclonal antibodies.
• Introduced a direct service to Singapore to provide technical support and customer services, expanding the Company’s presence in the Asia Pacific region.
• Signed a licence and supply agreement with Horizon Discovery Group plc for knockout cell lines, another tool enabling Abcam to provide the highest quality products.
• Development of our plans to transform systems and processes to underpin our growth going well.

Commenting on the interim results, Alan Hirzel, Abcam’s Chief Executive Officer, said: “We have delivered strong revenue performance whilst investing in the next chapter of Abcam’s growth. There is significant momentum in the business as we continue our focus on high value targets and revenue growth in China. Driving standards in quality and validation both differentiates our products and aligns us with the needs of our customers, who demand ever higher standards in their research. The acquisitions of AxioMx and Firefly™, together with new partnerships and the other investments we are making in technology, provide additional avenues to grow and new markets we can access. With this first half performance and our traditionally seasonally weighted second half, I am confident we will achieve our targets for the full year.”