On September 12, 2022 Abcam plc (Nasdaq: ABCM; AIM: ABC) (‘Abcam’, the ‘Group’ or the ‘Company’), a global leader in the supply of life science research tools, reported its interim results for the six-month period ended 30 June 2022 (the ‘period’) (Press release, Abcam, SEP 12, 2022, View Source [SID1234619391]).
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FINANCIAL PERFORMANCE
* Excludes the amortisation of the fair value of assets relating to the inventory acquired in connection with the acquisition of BioVision.
** Adjusted figures exclude systems and process improvement costs, acquisition costs, amortisation of fair value adjustments, integration and reorganisation costs, amortisation of acquisition intangibles, share-based payments and employer tax contributions thereon, and the tax effect of adjusting items. Such excluded items are described as "adjusting items." Further information on these items is shown in note 4 to the consolidated interim financial statements. Share-based payments have been included in adjusting items from the period ended 30 June 2022; the prior period has been re-presented to be in line with the current period.
*** Net (debt) / cash comprises cash and cash equivalents less borrowings.
FINANCIAL HIGHLIGHTS1
· 20% constant exchange rate (‘CER’) revenue growth (23% reported revenue growth), driven by in-house product sales and the inclusion of BioVision
· Adjusted gross margin increased 420 basis points aided by in-house product mix, including the accretive impact from the inclusion of BioVision
· Adjusted operating cost increases were primarily driven by higher selling, general & administrative expenses for personnel, IT expenses for our digital strategy, and the inclusion of BioVision. Adjusted operating profit margin expanded 540 bps to 23% driven by favourable product mix and operating leverage. Reported operating profit decreased by £1.0m to £9.3m (H1 2021: £10.3m)
· Adjusted diluted earnings per share were 14.0p up 97% (H1 2021: 7.1p)
·In-house new product development and sales experienced gains. Total in-house revenue (including CP&L and BioVision) now represents 67% of total revenue (H1 2021: 58%)
· The Company’s net debt position is a result of the BioVision acquisition but improved as compared to 31 December 2021 (£24.1m)
STRATEGIC & OPERATIONAL HIGHLIGHTS1
· Academic and Research customers returned to their labs, although China continued to be impacted by COVID lockdowns
·Pharmaceutical customers continue their efforts to understand disease-specific biomarkers
· BioVision integration activities on track
· Consistent key performance indicators2
o Product satisfaction rates H1 2022 99.0% (H1 2021: 98.8%)
o Customer transactional Net Promoter Score (‘tNPS’) H1 2022 +55 (H1 2021: +58)
· Ongoing digital and physical infrastructure investments including Waltham expansion, and new Singapore office
·Installation of High Throughput Cell-Engineering Platform for edited cell lines
·H1 2022 New Product Development of over 1,800 products
·Recognised as the company with most CiteAb awards
· Following a positive shareholder response, Board to seek General Meeting before the end of the year to approve the cancellation of its listing on AIM
Commenting on the performance, Alan Hirzel, Abcam’s Chief Executive Officer, said:
"I am proud of our team’s effort to support our global customers and the results those efforts generated in our first half of 2022. We achieved 20% constant exchange rate revenue growth, 23% reported revenue growth, driven by our multi-year dedication to increasing in-house innovation at Abcam. These investments in innovation and in our broader strategy, have sustained growth and expanded gross margin in the period. As we move into the next phase of our five-year strategic plan, we are moderating investment levels and working toward higher operating leverage and adjusted operating margin expansion. Looking ahead, we are confident in our growth trajectory and committed to delivering our CY2022 guidance and CY2024 goals."
CY2022 GUIDANCE
For the full year ending December 2022, we currently estimate total revenue to increase approximately 20% CER including the impact from the acquisition of BioVision, with organic CER growth of mid-teens. We expect the contribution from the sale of higher margin in-house products and the full year effect of BioVision to contribute to a continuing increase in adjusted operating margins.
SHARE TRADING, LIQUIDITY AND LISTING
Having consulted shareholders on its proposal to cancel the admission of the Company’s ordinary shares to trading on AIM, leaving it with a listing solely on NASDAQ, and having received positive responses from all consulted, in the coming weeks the Board will issue a circular to convene an extraordinary general meeting to seek shareholder approval for the cancellation of the admission of the Company’s shares to trading on AIM.
The circular will contain full details of the proposal, what action shareholders will be required to take and information on the impact of those holding ordinary shares.
Analyst and investor meeting and webcast:
Abcam will host a conference call and webcast for analysts and investors today at 13:00 BST/ 08:00 EDT. For details, and to register, please visit corporate.abcam.com/investors/reports-presentations
A recording of the webcast will be made available on Abcam’s website, corporate.abcam.com/investors