Abcam plc (Nasdaq: ABCM; AIM: ABC) (‘Abcam’, the ‘Group’ or the
‘Company’), a global leader in the supply of life science research
tools, today announces its interim results for the six- and
12-month periods ended 30 June 2021 (the ‘period’). The Group’s
accounting reference date has changed from 30 June to 31 December1,
therefore these interim financial statements report on both a six-
and 12-month period.
SUMMARY
PERFORMANCE
|
12 months to 30 June |
|
Six months to 30 June (‘H2’)3 |
|
Reported |
|
Adjusted2 |
|
Reported |
|
Adjusted2 |
|
2021£m |
2020£m |
|
2021£m |
2020£m |
|
2021£m |
2020£m |
|
2021£m |
2020£m |
Revenue |
297.7 |
260.0 |
|
297.7 |
260.0 |
|
150.2 |
121.8 |
|
150.2 |
121.8 |
Gross profit margin, % |
71.1 |
69.3 |
|
71.1 |
69.3 |
|
71.4 |
68.9 |
|
71.4 |
68.9 |
Operating profit / (loss) |
28.2 |
10.5 |
|
45.8 |
44.5 |
|
10.3 |
(16.1) |
|
19.8 |
11.1 |
Diluted earnings per share
(‘EPS’) (pence) |
7.2 |
6.0 |
|
13.5 |
16.6 |
|
1.3 |
(6.5) |
|
4.8 |
3.6 |
Net Cash* |
219.9 |
80.9 |
|
219.9 |
80.9 |
|
219.9 |
80.9 |
|
219.9 |
80.9 |
* Net Cash comprises cash and cash
equivalents less borrowings.
FINANCIAL
HIGHLIGHTS1
- H2 constant exchange
rate (‘CER’) revenue growth of 29% (23% reported) versus the prior
year comparative period. 12-month CER revenue growth of 18% (14%
reported)
- H2 in-house CER
revenue growth (including CP&L4) of 41% (35% reported)
- H2 gross margin
increased 250 basis points to 71.4%, benefiting from the
contribution of higher margin in-house products. 12-month gross
margin increased to 71.1%
- H2 operating profit
of £10.3m with a 78% increase in adjusted2 operating profit to
£19.8m, equating to an adjusted operating margin of 13.2% (H2 2020:
9.1%). 12-month adjusted operating margin of 15.4% (2020: 17.1%),
reflecting continuing investment in the business to support future
growth
- H2 reported diluted
EPS of 1.3p (H2 2020: -6.5p). Adjusted2 diluted EPS of 4.8p (H2
2020: 3.6p) reflecting the increase in operating profit offset by a
higher deferred tax charge and higher number of shares in
issue
- Net cash inflow from
operating activities over the 12-month period of £71.9m (2020:
£63.0m), ending the period with a net cash position of £219.9m
(2020: £80.9m)
BUSINESS
HIGHLIGHTS
- Customers have
gradually returned to labs during the 12-month period, with global
lab activity approaching pre-COVID levels in the largest
markets
- Customer
transactional Net Promotor Score (‘tNPS’) up two percentage points
year-on-year to +58, with product satisfaction rates reaching
all-time highs for the company
- In-house product
development and sales increased versus 2020, despite COVID-19
impact on lab activity; total in-house revenue in H2 (including
CP&L) comprised 58% of total revenue (H2 2020: 53%)
- Partnering with
biopharma, diagnostic and multiplex platform partners continued to
generate current and future sources of growth with the number of
commercialized antibodies with these partners rising to more than
800 (2020: 459)
- Progress was made in
upgrading of the Group’s digital and physical infrastructure to
support future growth, including the opening of new and expanded
sites in China, Massachusetts, and California
- Completed secondary
US listing on Nasdaq in October 2020 (in addition to existing AIM
listing in the UK)
- Expanded Asia,
Digital, and Life Science Industry experience within the Board of
Directors with the appointments of Bessie Lee, Mark Capone and post
period end, Sally Crawford, as Non-Executive Directors
- Post period end
announced agreement to acquire BioVision, Inc, a leading innovator
of biochemical and cell-based assays, for cash consideration of
$340m, with closing expected in October 2021
CURRENT
TRADING AND OUTLOOK
Six-months to 31
December 2021
-
Uncertainty around the COVID-19 pandemic remains, yet laboratory
activity and demand have continued to gradually recover and trading
performance year-to-date is in line with the Board's expectations,
with mid-teens CER revenue growth in July and August
-
Based on prevailing exchange rates to pound sterling5, the foreign
exchange headwind to revenue growth is expected to be approximately
6% in the six months to 31 December 2021
-
Following the recent Oracle ERP deployments and investments made in
our global facilities, adjusted depreciation and amortisation
(‘D&A’) costs of approximately £17-18m are expected in the six
months to 30 December 2021 (£15.1m in the six months to 30 June
2021)
-
Excluding D&A, adjusted costs and expenses for the six months
ended 31 December 2021 are expected to grow at mid- to high- single
digit over the six-month period ended 30 June 2021 (£72.3m in the
six months to 30 June 2021)
Long-Term Outlook to
2024
We are achieving
growth across all product categories and geographic areas of the
business as market activity continues to recover and our growth
strategy is implemented. Investments we have made, and that we
continue to make, are enabling the business to sustain growth, and
we remain committed to generating revenue of £425 – 500m for the
year ending 31 December 2024 (calculated at the average exchange
rates for the 12 months ended June 2021).
The business’ cash
generation and financial position continue to provide a foundation
from which to pursue opportunities, including innovation,
acquisitions and partnerships. We will continue to invest in our
business to enable Abcam to provide innovative, trusted, and
improved solutions for our customers. While the rate of investment
is expected to moderate from recent levels, as we pass the peak for
this 2019-2024 strategy implementation, we have a continuing
appetite to invest in growing Abcam sustainably for the long
term.
Commenting on the performance,
Alan Hirzel, Abcam’s Chief Executive Officer, said:
“Our team is dedicated
to supporting life science discovery and the translation of
discovery to social impact. Our financial performance,
including 29% revenue growth, is one indicator of the trust the
market has in our team, our innovation, and our brand. I am
grateful to everyone at Abcam and our customers for their brilliant
collaboration and efforts through this most challenging time. I
thank our customers and partners for their continued support.”
“As I look ahead, I am
convinced more than ever that we can extend our market leadership,
sustain durable growth, and become an increasingly influential
partner within our industry.”
Analyst and investor meeting
and webcast:
Abcam will host a conference call and
webcast for analysts and investors today at 14:00 BST/ 09:00 EDT.
For details, and to register, please visit
corporate.abcam.com/investors/reports-presentations
For further details please contact FTI
Consulting at abcam@fticonsulting.com
A recording of the webcast will be
made available on Abcam’s website,
corporate.abcam.com/investors
Notes:
-
On 2 June 2021, Abcam announced that it had changed its accounting
reference date from 30 June to 31 December. Following this
extension of the Group's accounting period to the 18 months ended
31 December 2021, these interim financial statements are the second
set of interim results that the Group has reported in this period.
Unless otherwise stated, commentary relates to the comparison of
the 12-month period ended 30 June 2021 (‘2021’) with the same
period ended 30 June 2020 (‘2020’). Comparative tables for the
sis-month period ended 30 June 2021 are provided in the financial
statements.
-
These interim results include discussion of alternative performance
measures which include revenues calculated at Constant Exchange
Rates (CER) and adjusted financial measures. CER results are
calculated by applying prior period's actual exchange rates to this
period's results. Adjusted financial measures are explained in note
2(c) and reconciled to the most directly comparable measure
prepared in accordance with IFRS in note 4 to the interim financial
statements.
-
Throughout this report, ‘H2 2020’ and ‘H2 2021’ refer to the
six-month periods ended 30 June 2020 and 30 June 2021,
respectively.
-
Custom Products & Licensing (CP&L) revenue comprises custom
service revenue, revenue from the supply of IVD products and
royalty and licence income.
-
Based on average exchange rates to GBP from 1 July – 9 September
2021 as follows: USD: 1.38; EUR: 1.17, RMB: 8.93, JPY 151.9
The information
communicated in this announcement contains inside information for
the purposes of Article 7 of the Market Abuse Regulation (EU) No.
596/2014.
For further information please
contact:
Abcam |
+ 44 (0) 1223 696 000 |
Alan Hirzel, Chief Executive
OfficerMichael Baldock, Chief Financial OfficerJames Staveley, Vice
President, Investor Relations |
|
Numis – Nominated
Advisor & Joint Corporate Broker |
+ 44 (0) 20 7260 1000 |
Garry Levin / Freddie
Barnfield / Duncan Monteith |
|
J.P. Morgan Cazenove –
Joint Corporate Broker |
+ 44 (0) 20 7742 4000 |
James Mitford / Hemant
Kapoor |
|
Morgan Stanley – Joint
Corporate Broker |
+ 44 (0) 207 425 8000 |
Tom Perry / Luka Kezic |
|
FTI
Consulting |
+ 44 (0) 20 3727
1000 |
Ben Atwell / Natalie
Garland-Collins |
|
This announcement
shall not constitute an offer to sell or solicitation of an offer
to buy any securities.
This announcement is
not an offer of securities for sale in the United States, and the
securities referred to herein may not be offered or sold in the
United States absent registration except pursuant to an exemption
from, or in a transaction not subject to, the registration
requirements of the U.S. Securities Act of 1933, as amended. Any
public offering of such securities to be made in the United States
will be made by means of a prospectus that may be obtained from the
issuer, which would contain detailed information about the company
and management, as well as financial statements.
Forward
Looking StatementsThis announcement contains
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. Any express or implied
statements contained in this announcement that are not statements
of historical fact may be deemed to be forward-looking statements,
including, without limitation statements of targets, plans,
objectives or goals for future operations, including those related
to Abcam’s products, product research, product development, product
introductions and sales forecasts; statements containing
projections of or targets for revenues, costs, income (or loss),
earnings per share, capital expenditures, dividends, capital
structure, net financials and other financial measures; statements
regarding future economic and financial performance; statements
regarding the scheduling and holding of general meetings and AGMs;
statements regarding the assumptions underlying or relating to such
statements; statements about Abcam's portfolio and ambitions, as
well as statements that include the words “expect,” “intend,”
“plan,” “believe,” “project,” “forecast,” “estimate,” “may,”
“should,” “anticipate” and similar statements of a future or
forward-looking nature. Forward-looking statements are neither
promises nor guarantees, but involve known and unknown risks
and uncertainties that could cause actual results to differ
materially from those projected, including, without limitation: a
regional or global health pandemic, including the novel coronavirus
(“COVID-19”), which has adversely affected elements of our
business, could severely affect our business, including due to
impacts on our operations and supply chains; challenges in
implementing our strategies for revenue growth in light of
competitive challenges; developing new products and enhancing
existing products, adapting to significant technological change and
responding to the introduction of new products by competitors to
remain competitive; failing to successfully identify or integrate
acquired businesses or assets into our operations or fully
recognize the anticipated benefits of businesses or assets that we
acquire; if our customers discontinue or spend less on research,
development, production or other scientific endeavors; failing to
successfully use, access and maintain information systems and
implement new systems to handle our changing needs; cyber security
risks and any failure to maintain the confidentiality, integrity
and availability of our computer hardware, software and internet
applications and related tools and functions; failing to
successfully manage our current and potential future growth; any
significant interruptions in our operations; if our products fail
to satisfy applicable quality criteria, specifications and
performance standards; failing to maintain our brand and
reputation; our dependence upon management and highly skilled
employees and our ability to attract and retain these highly
skilled employees; and the important factors discussed under the
caption “Risk Factors” in Abcam's prospectus pursuant to Rule
424(b) filed with the U.S. Securities and Exchange Commission
(“SEC”) on 22 October 2020, which is on file with the SEC and is
available on the SEC website at www.sec.gov, as such factors may be
updated from time to time in Abcam's other filings with the SEC.
Any forward-looking statements contained in this announcement speak
only as of the date hereof and accordingly undue reliance should
not be placed on such statements. Abcam disclaims any obligation or
undertaking to update or revise any forward-looking statements
contained in this announcement, whether as a result of new
information, future events or otherwise, other than to the extent
required by applicable law.Interim management
report
Following the extension of the Group's
accounting period to the 18 months ended 31 December 2021, these
interim financial statements are the second set of interim results
that the Group has reported in this period. Unless otherwise
stated, the commentary relates to the comparison of the 12-month
period ended 30 June 2021 (‘2021’) with the 12-month period ended
30 June 2020 (‘2020’). Comparative tables for the six-month period
ended 30 June 2021 are also provided in the financial
statements.
Introduction
We are pleased with
the continued progress of our business over the last 12 months and
the way our people have responded to the evolving impact of
COVID-19. Indeed, the challenges presented since the pandemic began
over 18 months ago have served to highlight the resilience of both
our employees and our business, as well as the role Abcam and its
customers have in advancing critical life science research. We are
convinced more than ever that by continuing to develop our
technologies, people, and capabilities, and focusing on customer
needs, we can extend our market leadership, sustain durable growth,
and become an increasingly influential partner within our
industry.
Demand for our
products, and particularly Abcam’s in-house developed products,
increased during the period as laboratories have continued to relax
COVID-19 restrictions, enabling greater productivity. Whilst the
global pandemic situation continues to be fluid – and the risk of
further outbreaks and new variants remains – we estimate that
overall lab activity is now approaching pre-COVID levels in our
largest markets.
As a result, in the
six months ended 30 June 2021 our growth accelerated, with total
revenues increasing 29% CER (23% reported), adjusted operating
profit up 78%, to £19.8m (H2 2020: £11.1m), and adjusted diluted
EPS increasing 33% to 4.8p (H2 2020: 3.6p). On a reported basis,
operating profit increased to £10.3m (H2 2020: -£16.1m) and diluted
EPS increased to 1.3p (H2 2020: -6.5p). Revenue over the 12-month
period grew by 18% CER (14% reported) to £297.7m, whilst adjusted
operating profit rose 3%. Adjusted diluted EPS declined to 13.5p
(2020: 16.6p). On a reported basis, operating profit increased to
£28.2m (2020: £10.5m) and diluted EPS increased to 7.2p (2020:
6.0p).
Despite the disruption
inflicted on our customers and industry by COVID-19, the
opportunities for growth in our markets remain, and we are
committed to our investment plans to support the Group’s long-term
growth ambitions. This has been an active period of strategic
implementation across the Group, and we pay tribute to our
colleagues and teams around the world who have shown audacity,
agility, and dedication in the delivery of our plans – they are
fundamental to the Group’s future success.
Underpinning our
continued progress is our robust balance sheet and financial
position, which enables us to invest in attractive organic and
inorganic growth opportunities as they arise. This includes the
recently announced acquisition of BioVision, a leading innovator of
biochemical and cell-based assays, for $340m (subject to approval
by the Shenzhen stock exchange and NKY shareholders, the parent
company of BioVision), which will accelerate Abcam's strategic
execution and focus on in-house innovation and products.
Looking forward, with
our expanding capabilities, financial position and market
opportunities for growth, the Group is well-placed to sustain
long-term value creation.
Financial
review
As announced on 1
September 2021, the results presented for the 12 months ended 30
December 2020 include restated financial information for the six
months ended 31 December 2020. See note 2 to the interim financial
statements for further information.
Revenue
Revenue growth continues to be driven both by a
recovery in laboratory activity from the depressed levels
experienced in 2020 due to the COVID-19 pandemic, and by increasing
demand for our portfolio of in-house developed products. Overall,
in the six months ended 30 June 2021, total reported revenue grew
23.3% to £150.2m (H2 2020: £121.8m), representing CER growth of
29.0%, after a 5.7% headwind from foreign currency exchange as
sterling appreciated against the Group’s major trading
currencies.
The revenue impact of delisting products as part
of our ongoing quality initiatives was approximately 3%. Though
product delistings occur every year, the revenue impact in the
period was materially higher than in prior years due to the removal
of a certain number of larger supplier portfolios, which is not
expected to be repeated.
Catalogue revenue, comprising around 94% of
total revenue, grew 31.2% CER in the six months ended 30 June 2021
(25.6% reported), driven by increased demand for our in-house
products, with CER revenue growth from these products of 47.7% CER
(41.4% reported). Regionally, all major territories grew at
high-single or double-digit rates.
Custom Products & Licensing (‘CP&L’)
revenue, comprising the remaining 6% of total revenue, rose 3.2% on
a CER basis (-4.3% reported). Within CP&L, revenue growth
delivered from the supply of products for IVD use and from
royalties and licensing income was partially offset by a decline in
revenue from custom projects, which experienced lower customer
activity in the period due to COVID-19.
Overall, total revenue
for the 12-month period ended 30 June 2021 grew 14.5% to £297.7m
(2020: £260.0m), representing CER growth of 18.0% after a 3.5%
foreign currency exchange headwind. Acquisitions added 2% to
reported revenue growth in the year (all of which was incurred in
the first six months, to 31 December 2021), offset by approximately
3% of revenue lost due to product delistings.
|
12 months to 30 June |
|
Six months to 30 June |
|
Revenue, £m |
|
% change |
2021 |
|
Revenue, £m |
|
% Change |
2021 |
|
2021 |
2020 |
|
CER |
% split |
|
2021 |
2020 |
|
CER |
% Split |
Catalogue revenue by region |
|
|
|
|
|
|
|
|
|
|
|
The Americas |
104.8 |
96.8 |
|
14.8% |
37% |
|
53.5 |
44.1 |
|
31.6% |
38% |
EMEA |
80.6 |
68.4 |
|
17.5% |
29% |
|
41.4 |
34.0 |
|
22.8% |
29% |
China |
53.0 |
39.1 |
|
35.9% |
19% |
|
25.7 |
15.4 |
|
68.3% |
18% |
Japan |
19.6 |
18.8 |
|
8.5% |
7% |
|
9.8 |
9.4 |
|
10.6% |
7% |
Rest of
Asia Pacific |
22.3 |
20.0 |
|
16.1% |
8% |
|
10.9 |
9.6 |
|
19.5% |
8% |
Catalogue revenue sub-total |
280.3 |
243.1 |
|
18.6% |
100% |
|
141.3 |
112.5 |
|
31.2% |
100% |
Custom products and services |
5.1 |
6.3 |
|
(15.1%) |
29% |
|
2.4 |
3.0 |
|
(13.3%) |
27% |
IVD |
5.7 |
4.7 |
|
29.2% |
33% |
|
3.1 |
3.3 |
|
1.7% |
35% |
Royalties and licenses |
6.6 |
5.9 |
|
18.4% |
38% |
|
3.4 |
3.0 |
|
21.1% |
38% |
Custom Products & Licensing sub-total |
17.4 |
16.9 |
|
8.9% |
100% |
|
8.9 |
9.3 |
|
3.2% |
100% |
Total reported revenue |
297.7 |
260.0 |
|
18.0% |
100% |
|
150.2 |
121.8 |
|
29.0% |
100% |
|
|
|
|
|
|
|
|
|
|
|
|
Catalogue revenue by
product type: |
|
|
|
|
|
|
|
|
|
|
|
In-house products |
151.7 |
114.4 |
|
36.5% |
54% |
|
78.2 |
55.3 |
|
47.7% |
55% |
Third-party products |
128.6 |
128.7 |
|
2.7% |
46% |
|
63.1 |
57.2 |
|
14.8% |
45% |
Catalogue revenue sub-total |
280.3 |
243.1 |
|
18.6% |
100% |
|
141.3 |
112.5 |
|
31.2% |
100% |
Gross
margin
Gross margin increased by 250 basis points, to
71.4%, in the six months ended 30 June 2021 (H2 2020: 68.9%),
reflecting both a favourable movement in product mix, with
catalogue revenue generated from in-house products increasing to
55% of the total (H2 2020: 49%), as well as volume leverage
resulting from the increase in revenue. Gross margin for the
12-month period increased to 71.1% (2020: 69.3%). The Group expects
gross margin to continue to benefit from an increasing proportion
of in-house product sales in the future.
Operating Costs and Expenses
|
12 months to 30 June |
|
Six months to 30 June |
|
Reported |
|
Adjusted2 |
|
Reported |
|
Adjusted2 |
|
2021£m |
2020£m |
|
2021£m |
2020£m |
|
2021£m |
2020£m |
|
2021£m |
2020£m |
Selling, general & administrative expenses (SG&A) |
158.8 |
131.4 |
|
147.4 |
118.3 |
|
85.8 |
70.7 |
|
79.3 |
62.2 |
Research and development expenses (R&D) |
24.8 |
38.3 |
|
18.6 |
17.4 |
|
11.1 |
29.3 |
|
8.1 |
10.6 |
Total operating costs and expenses |
183.6 |
169.7 |
|
166.0 |
135.7 |
|
96.9 |
100.0 |
|
87.4 |
72.8 |
Non-cash costs |
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortisation |
(35.4) |
(29.9) |
|
(26.1) |
(21.2) |
|
(19.4) |
(16.7) |
|
(15.1) |
(11.4) |
Impairment |
- |
(14.9) |
|
- |
- |
|
- |
(14.9) |
|
- |
- |
Share-based compensation |
(13.6) |
(9.3) |
|
(13.6) |
(9.3) |
|
(6.3) |
(4.3) |
|
(6.3) |
(4.3) |
Total operating costs and expenses excl. non-cash
costs |
134.6 |
115.6 |
|
126.3 |
105.2 |
|
71.2 |
64.1 |
|
66.0 |
57.1 |
* Details of items
excluded from reported costs and expenses are provided in Adjusting
Items below and in note 4 of the interim financial statements.
Six months ended 30
June 2021
Total reported
operating costs and expenses decreased by £3.1m or 3.1%, with
reported SG&A expenses increasing 21.4% and R&D expenses
declining 62.1% due to the impact of the £14.9m impairment recorded
in the prior year period. On an adjusted basis, total costs and
expenses increased by £14.6m or 20.1%, to £87.4m (H2 2020: £72.8m).
The increase reflects greater business activity as well as planned
investments made during the period in our platform and team to
support the Company’s growth, including:
- an
increase in salary and salary-related costs (excluding share-based
compensation costs) of £8.6m, to £53.1m, representing approximately
60% of the Group’s total adjusted operating cost base. Global
headcount ended the period at approximately 1,650, up from
approximately 1,500 in June 2020;
- an
increase in non-cash, share-based compensation costs of £2.0m, to
£6.3m; and
- a
£3.7m increase in adjusted depreciation and amortisation charges,
to £15.1m (£2.7m on a reported basis), predominantly relating to
the Oracle Cloud ERP project following the implementation of
additional modules. There was also a £0.5m increase in depreciation
on leased assets, following upgrades and expansion to our
geographic footprint. Depreciation and amortisation charges also
include £4.0m related to the amortisation of acquired intangibles
(2020: £5.2m) (included within adjusting items). Depreciation and
amortisation charges are expected to increase to £17-18m in the
next six months (to 31 December 2021) resulting from the recent
Oracle ERP modules and footprint developments.
Excluding non-cash
costs, which comprise depreciation and amortisation, impairments,
and share-based compensation, costs increased by 11.1% on a
reported based and by 15.6% on an adjusted basis.
12 months ended 30
June 2021
On a reported basis,
total operating costs and expenses increased by £13.9m or 8.2%, to
£183.6m. On an adjusted basis, costs and expenses increased 22.3%
to £166.0m (2020: £135.7m). Excluding non-cash costs as described
above, total reported costs increased by 16.4% on a reported based
and by 20.0% on an adjusted basis.
On a reported basis,
SG&A expenses rose 20.9% whilst R&D expenditure declined by
35.2% after the impairment recorded last year.
Adjusting
Items
Total reported costs
for the six months ended 30 June 2021 of £96.9m included £9.5m
which are excluded from adjusted expenses, comprising: £2.0m
relating to the Oracle Cloud ERP project (2020: £2.2m);
acquisition, integration, and reorganisation charges of £3.2m (H2
2020: £4.8m); and £4.0m in charges relating to the amortisation of
acquired intangibles (H2 2020: £5.2m). Together with £8.1m of
adjusting items included in the first six months of the year,
adjusting items for the 12-month period to 30 June 2021 totalled
£17.6m (2020: £34.0m).
Costs relating to the
Oracle Cloud ERP project and amortisation of acquired intangibles
are expected to be incurred at a similar level over the next six
months. The Group also expects to incur approximately £8m of
additional acquisition, integration, and reorganisation costs,
predominantly relating to the acquisition of BioVision, by the end
of calendar 2021.
Note 4 in the notes to
the interim financial statements provides further detail on
adjusting items and a reconciliation between reported and adjusted
profit measures.
Earnings,
Interest and Tax
|
12 months to 30 June |
|
Six months to 30 June |
|
Reported |
|
Adjusted2 |
|
Reported |
|
Adjusted2 |
|
2021£m |
2020£m |
|
2021£m |
2020£m |
|
2021£m |
2020£m |
|
2021£m |
2020£m |
EBITDA |
63.6 |
55.3 |
|
71.9 |
65.7 |
|
29.7 |
15.5 |
|
34.9 |
22.5 |
Depreciation and
amortisation |
(35.4) |
(29.9) |
|
(26.1) |
(21.2) |
|
(19.4) |
(16.7) |
|
(15.1) |
(11.4) |
Impairment |
- |
(14.9) |
|
- |
- |
|
- |
(14.9) |
|
- |
- |
Operating profit / (loss) |
28.2 |
10.5 |
|
45.8 |
44.5 |
|
10.3 |
(16.1) |
|
19.8 |
11.1 |
Net finance costs |
(2.8) |
(2.1) |
|
(2.8) |
(2.1) |
|
(1.1) |
(1.5) |
|
(1.1) |
(1.5) |
Profit before tax (PBT) |
25.4 |
8.4 |
|
43.0 |
42.4 |
|
9.2 |
(17.6) |
|
18.7 |
9.6 |
Tax |
(9.2) |
4.1 |
|
(12.5) |
(7.7) |
|
(6.3) |
4.0 |
|
(7.8) |
(1.9) |
Profit after tax |
16.2 |
12.5 |
|
30.5 |
34.7 |
|
2.9 |
(13.6) |
|
10.9 |
7.7 |
Reported operating
profit for the six months ended 30 June 2021 was £10.3m (H2 2020:
£16.1m operating loss). Adjusted operating profit rose 78.3% to
£19.8m (2020: £11.1m), equating to an adjusted operating profit
margin of 13.2% (H2 2020: 9.1%), reflecting both the increase in
revenue and investment during the period. Adjusted operating margin
for the 12-month period was 15.4% (2020: 17.1%).
After net finance
costs reduced following the repayment of the RCF in November 2020,
reported PBT increased to £9.2m in the six-month period (H2 2020:
£17.6m loss before tax) and adjusted PBT to £18.7m.
Reported tax charge
for the six-month period was £6.3m (H2 2020: credit of £4.0m),
primarily due to the requirement to restate those deferred tax
balances which are foreseen to reverse after 31 March 2023 at the
UK Corporation Tax rate of 25% applying after that date. This
restatement contributes a tax charge of some £3.5 million. After
tax on adjusting items of £1.5m, the tax charge on adjusted profits
totalled £7.8m, giving an effective tax rate for the six-month
period of 41.7% (H2 2020: 19.8%).
Reported tax charge
for the 12-month period was £9.2m (2020: credit of £4.1m), also
including the tax charge of £3.5 million in respect of the
restatement of deferred tax balances. After tax on adjusting items
of £3.3m, the tax charge on adjusted profits totalled £12.5m,
giving an effective tax rate for the 12-month period of 29.1%.
For both the six and
12-month periods, the underlying reported and adjusted current year
tax charge, excluding one off items, is approximately 19.8%.
Following the increase
in average shares in issue in the period following the share
placings in April 2020 and October 2020, reported diluted earnings
per share (EPS) for the six months ended 30 June 2021 was 1.3p (H2
2020: -6.5p), with adjusted diluted EPS of 4.8p (H2 2020: 3.6p).
For the 12 months reported diluted EPS was 7.2p (2020: 6.0p) and
adjusted diluted EPS 13.5p (2020: 16.6p). Note 6 sets out a
reconciliation between reported and adjusted EPS.
Cash Flow and
Net Cash for the 12 months ended 30 June
|
2021£m |
2020£m |
Operating cash flows before working capital |
77.3 |
61.4 |
Change in working capital |
(0.3) |
4.0 |
Cash generated from operations |
77.0 |
65.4 |
Income taxes paid |
(5.1) |
(2.4) |
Net cash inflow from operating activities |
71.9 |
63.0 |
Net cash outflow from investing activities |
(45.8) |
(148.1) |
Net cash inflow from financing activities |
8.9 |
184.6 |
Increase in cash and cash equivalents |
35.0 |
99.5 |
Cash and cash equivalents at beginning of year |
187.3 |
87.1 |
Effect of foreign exchange rates |
(2.4) |
0.7 |
Cash and cash equivalents at end of the
year |
219.9 |
187.3 |
|
|
|
Free Cash Flow * |
16.1 |
19.0 |
* Free Cash Flow
comprises net cash generated from operating activities less net
capital expenditure, cash flows relating to committed capital
expenditure and outflows in respect of lease obligations
The Group remains
highly cash generative at the operating level, with cash inflows
from operating activities increasing 14.1% to £71.9m (2020:
£63.0m). After an increase in net capital expenditure (including
cash flows relating to committed capital expenditure and capital
repayments on leases), Free Cash Flow was £16.1m (2020:
£19.0m).
Cash outflows on
investing activities were predominantly comprised of net capital
expenditures of £46.1m (2020: £36.3m). Net capital expenditure
includes the receipt of £0.4m in cash held in escrow in respect of
future capital expenditure together with a landlord reimbursement
of £10.7m relating to leasehold improvement costs, primarily for
the new Waltham site. Major areas of capital expenditure included
£13.8m in respect of global footprint developments (net of landlord
contributions) (2020: £nil), and £25.7m on intangible assets (2020:
£23.0m). Intangible assets included £7.4m in respect of the Oracle
ERP project, £9.0m in respect of other software developments
relating to the Group’s digital transformation and £8.9m of
internally developed technology relating to new in-house products
(2020: £9.0m).
Cash inflows from
financing activities totalled £8.9m (2020: £184.6m). This figure
was driven by the receipt of net proceeds of £127.4m from issuing
new shares, including the placing of American Depository Shares on
Nasdaq in October 2020, partially offset by the repayment of
£107.0m of the revolving credit facility together with other
outflows of £12.0m (2020: £8.6m).
The Group ended the
period with a net cash position of £219.9m (2020: £80.9m).
Post the period end
the Group announced it had agreed to acquire BioVision, a wholly
owned subsidiary of Boai NKY Medical Holdings Ltd., for total cash
consideration of $340 million (£246m).
Average*
Return on Capital Employed for the 12 months ended 30
June
£m unless otherwise stated |
2021* |
2020* |
Current assets* |
299.3 |
225.3 |
Non-current assets |
518.7 |
403.8 |
Total Assets* |
818.0 |
629.1 |
Less: Current liabilities* |
(113.3) |
(102.5) |
Average capital employed* |
704.7 |
526.6 |
Adjusted operating profit |
45.8 |
44.5 |
Return on Capital Employed*, % |
6.5% |
8.4% |
* Calculated by taking
the average of assets/liabilities from the previous two balance
sheets as at 30 June. For the 2021 calculation, the average was
calculated using the 30 June 2021 and 30 June 2020 balance sheets
and for the 2020 calculation, the calculation was performed using
the 30 June 2020 and 30 June 2019 balance sheets.
Average return on
capital employed for the period reduced from 8.4% to 6.5%,
predominantly reflecting the increase in current assets and
reduction in current liabilities following the share placing in
October 2020 raising net proceeds of £126.5m. The average capital
employed for 2020 was impacted by the implementation of IFRS 16 on
1 July 2019, resulting in right-of-use assets and current lease
liabilities on the group’s balance sheet (30 June 2020; £114.1m
impact, 30 June 2019: £nil), as well as the cash proceeds from the
issue of 11 million ordinary shares during April 2020 (£110.0
million).
Business
Review
The Group continued to
make further operating and strategic progress over the period,
strengthening its position as a partner of choice for customers and
partners.
Below follows a brief
description of milestones achieved aligned to the Group’s major
priorities:
Sustaining and extending antibody and
digital leadership
The Group remains committed to maintaining and
growing its position as the number one provider of research
antibodies, globally. Abcam’s customers’ success depends on
rigorous product performance and reliability, and it’s these
factors that continue to influence the Group’s innovation efforts.
Progress during the period included:
-
further market share gains from competitors, with the latest data
showing a ~2% percentage point gain in antibody citation share in
calendar 2020 (source: CiteAb, based on approximately 300,000
recorded citations for 2020 as of July 2021)
-
introduced over four thousand recombinant antibody-based products
over the last 12 months (including RabMAb antibodies, antibody
pairs, SimpleStep ELISA kits, and alternative formulations that
enable faster labelling and assay development), a 50% rise on the
previous 12 months period, despite COVID-19 related disruption to
the Group’s R&D activity levels;
-
achieved record product satisfaction rates for both in-house and
third-party products, supported by the Group’s product quality
initiatives, including expansion of Abcam’s award winning CRISPR
gene knockout validation programme and the delisting of thousands
of products that no longer meet the Group’s stringent performance
standards; and
-
made progress towards the next phase of the Group’s digital
customer vision, to support a more personalized and dynamic online
experience; including content marketing, marketing automation and
improvements to the user experience across the Group’s desktop and
mobile sites
Expanding into adjacent
markets
Non-antibody based proteomic research reagents
The Group continues to focus on broadening its
proprietary product offering beyond antibodies into complementary
life science reagents including conjugation and labelling kits,
recombinant proteins, engineered cell lines and lysates,
biochemical and cell-based assays and imaging and multiplexing
consumables. Overall, the Group has delivered over 30% CER revenue
growth in non-primary antibody products over the last 12 months,
with these products now accounting for approximately 20% of total
catalogue revenue. Alongside positive revenue growth, operational
milestones reached included:
-
strengthened conjugation and labelling offering following the
completions of the integrations of Expedeon, BrickBio and Marker
Gene Technologies;
-
completed the build out of in-house protein team and developed and
launched initial batch of high-quality, bioactive proteins;
-
opened a new R&D facility in Fremont, California to house our
engineered cell-lines team and published the first group of
in-house developed cell lines following the acquisition of Applied
Stem Cell in 2020;
-
made further operational and commercial progress with FirePlex®
multiplex offering, launching a new high-throughput 1,536
well-plate product and adding several new biopharma customers;
-
post period end announced the acquisition of BioVision, a leading
innovator of biochemical and cell-based assays and major supplier
to Abcam; and
-
expanded operational capacity for new product development with the
opening of the Waltham, MA facility in July 2021.
Developing biopharma, diagnostic and platform partnerships
(‘Abcam Inside’)
Across the translational research, drug
discovery and clinical markets, our goal is to be a leading
discovery partner to organisations looking to access high quality
antibodies and antibody expertise for commercial use. Recent
progress includes:
-
continued business development and generation of customer interest,
benefiting from the investments made in innovation capabilities,
business development and commercial teams over the last several
years;
-
executed over 90 outbound commercial agreements (2020: 56) with new
and existing partners, including the initiation of approximately 30
new service, commercial supply agreements and/or licenses; and
-
commercialised hundreds of additional recombinant RabMAb clones
through co-development programs on third-party platforms or as
diagnostic tools under these agreements, bringing the total to over
800 (2020: 479), with almost 2,000 more undergoing evaluation by
partners.
Building organisational
scalability
The Group continues to focus on building
scalability into its operational infrastructure including its
manufacturing and logistics footprint, IT backbone and digital
capabilities to support its long-term growth plans and realise
operational efficiencies. Progress includes:
-
delivered planned developments of the Group’s global footprint,
despite disruptions caused by COVID-19, including:
-
opened major new c.100,000 sq. ft facility in Waltham,
Massachusetts in July 2021, more than doubling previous site
footprint, and a new site in Freemont, California;
-
completed expansion of the Group’s operations in Hangzhou and
opened a new, larger facility in Shanghai, China; and
-
progressed work on the next wave of enhancements, covering Eugene,
Oregon and Asia-Pacific
-
began roll-out of the final stages of Oracle ERP project, covering
manufacturing and supply chain. Successfully implemented initial
phases, with completion currently on track by the end of calendar
2022; and
-
continued to automate manual systems across customer operations,
procurement, and finance to improve customer support levels and
generate efficiencies.
Sustainable
development and increasing positive impact
During the year the
Group reviewed the impact of its business operations and
established commitments, metrics and targets aligned to the
following four areas believed to be most important to sustaining
value creation: Products; People; Partners and Planet. Further
detail is available in our 2020 Impact Report published on our
corporate website (corporate.abcam.com/sustainability). Progress
against the initial metrics identified for each area are shown
below:
Sustainability Performance Measure |
Area |
2021 |
2020 |
Customer tNPS (12-month rolling) |
Products |
+58 |
+56 |
In-house product revenue as %
of total catalogue revenue |
Products |
54% |
47% |
Product
satisfaction rate (12-month rolling) |
Products |
98.9% |
98.7% |
Employee tNPS (12-month rolling to December)* |
People |
from 2022* |
Days
lost to Health & Safety incidents |
People |
4 |
2 |
No. of antibodies validated for use on third-party platforms or in
diagnostics |
Partners |
843 |
459 |
Third
party suppliers signed up to Abcam’s Code of Conduct |
Partners |
100.0% |
98.3% |
Carbon intensity (Scope 1, 2 & 3, Global), TCO2e / £m |
Planet |
TBC** |
21.2 |
Waste
to landfill, Tonnes |
Planet |
TBC** |
77.5 |
* Monthly survey data
was launched in April 2020. The Group will report on the first
complete year (12-month average to December 2021) in March 2022.
The measure has remained consistent from April 2020 to date.** 2021
data collection and analysis ongoing – to be published in the
interim impact report later in 2021
Together with the
positive developments on products and partnerships outlined in the
section above, the Group has made further progress on its people
strategy during the year, including increasing the amount of
training and support provided to employees, furthering the Group’s
involvement in the UK apprentice scheme and working to foster a
more inclusive environment. A new Diversity & Inclusion
strategy was launched during the year, including the establishment
of multiple Employee Resource Groups, together with an enhanced
family leave policy, and the introduction of diversity and
inclusion targets that are tied to senior management
compensation.
These and other
initiatives ensure that we are building an exceptional workplace
for our teams. Despite the challenges brought by the pandemic,
monthly employee engagement scores remain close to all-time highs
and we were delighted to be recognised by Glassdoor earlier this
year as the 3rd best place to work in the UK in 2020, as voted for
by employees.
Whilst our carbon
footprint is modest on a relative basis, we recognise that every
person and organisation on the planet must take action to address
the climate crisis. The Group continues to progress its carbon
reporting and management in support of our commitment to reduce our
environmental impact. The Group’s SECR Scope 3 emissions were
analysed during the year and have now been incorporated into our
carbon intensity measure for 2020. Emissions reporting for the last
12 months is currently underway and will be published in the
Group’s interim impact report, to be published later in 2021.
Looking
forward
We are achieving good
momentum across the business as market activity continues to
recover. Investments we have made, and that we continue to make,
are enabling the business to sustain growth and we remain committed
to generating revenue of £425 – 500m for the year ending 31
December 2024 (calculated at the average exchange rates for the 12
months ended June 2021).
In the more immediate
term, uncertainty around the COVID-19 pandemic remains, yet
laboratory activity and demand have continued to gradually recover
and trading performance year to date is in line with the Board's
expectations, with mid-teens CER revenue growth in July and
August.
The business’ cash
generation and financial position continue to provide a foundation
from which to pursue opportunities, including innovation,
acquisitions and partnerships. We will continue to invest in our
business to enable Abcam to provide innovative, trusted, and
improved solutions for our customers. While the rate of investment
is expected to moderate from recent levels as we pass the peak for
this 2019-2024 strategy implementation, we have a continuing
appetite to invest in growing Abcam sustainably for the long
term.
Supported by a clear
purpose and strategy, and thanks to the efforts of all our
employees and partners, we believe that Abcam is well positioned to
continue delivering long-term value for our shareholders.
Alan HirzelChief Executive
Officer
Michael S
BaldockChief Financial Officer
13 September 2021
Forward
Looking Statements
This report contains
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. Any express or implied
statements contained in this announcement that are not statements
of historical fact may be deemed to be forward-looking statements,
including, without limitation statements of targets, plans,
objectives or goals for future operations, including those related
to Abcam’s products, product research, product development, product
introductions and sales forecasts; statements containing
projections of or targets for revenues, costs, income (or loss),
earnings per share, capital expenditures, dividends, capital
structure, net financials and other financial measures; statements
regarding future economic and financial performance; statements
regarding the scheduling and holding of general meetings and AGMs;
statements regarding the assumptions underlying or relating to such
statements; statements about Abcam's portfolio and ambitions, as
well as statements that include the words “expect,” “intend,”
“plan,” “believe,” “project,” “forecast,” “estimate,” “may,”
“should,” “anticipate” and similar statements of a future or
forward-looking nature. Forward-looking statements are neither
promises nor guarantees, but involve known and unknown risks
and uncertainties that could cause actual results to differ
materially from those projected, including, without limitation: a
regional or global health pandemic, including the novel coronavirus
(“COVID-19”), which has adversely affected elements of our
business, could severely affect our business, including due to
impacts on our operations and supply chains; challenges in
implementing our strategies for revenue growth in light of
competitive challenges; developing new products and enhancing
existing products, adapting to significant technological change and
responding to the introduction of new products by competitors to
remain competitive; failing to successfully identify or integrate
acquired businesses or assets into our operations or fully
recognize the anticipated benefits of businesses or assets that we
acquire; if our customers discontinue or spend less on research,
development, production or other scientific endeavours; failing to
successfully use, access and maintain information systems and
implement new systems to handle our changing needs; cyber security
risks and any failure to maintain the confidentiality, integrity
and availability of our computer hardware, software and internet
applications and related tools and functions; failing to
successfully manage our current and potential future growth; any
significant interruptions in our operations; if our products fail
to satisfy applicable quality criteria, specifications and
performance standards; failing to maintain our brand and
reputation; our dependence upon management and highly skilled
employees and our ability to attract and retain these highly
skilled employees; and the important factors discussed under the
caption “Risk Factors” in Abcam's prospectus pursuant to Rule
424(b) filed with the U.S. Securities and Exchange Commission
(“SEC”) on 22 October 2020, which is on file with the SEC and is
available on the SEC website at www.sec.gov, as such factors may be
updated from time to time in Abcam's other filings with the SEC.
Any forward-looking statements contained in this announcement speak
only as of the date hereof and accordingly undue reliance should
not be placed on such statements. Abcam disclaims any obligation or
undertaking to update or revise any forward-looking statements
contained in this announcement, whether as a result of new
information, future events or otherwise, other than to the extent
required by applicable law.
Responsibility statementWe confirm to the best
of our knowledge:
- the interim
financial statements have been prepared in accordance with IAS
34;
- the Financial and
Operational highlights, Interim Management Report and Interim
Financial statements include a fair review of the information
required by the Financial Statements Disclosure and Transparency
Rules (DTR) 4.2.7R, being an indication of important events that
have occurred during the first twelve months of the financial
period and a description of the principal risks and uncertainties
for the remaining six months of the period; and
- the Financial and
Operational highlights and Interim Management Report include a fair
review of the information required by DTR 4.2.8R, being related
party transactions that have taken place in the first twelve months
of the current financial period and that have materially affected
the financial position or performance of the entity during the
period and also any changes in the related party transactions
described in the last Annual Report that could do so.
At the date of this statement, the
Directors are those listed in the Annual Report and Accounts 2020
except for the following changes.
|
|
Appointed |
Resigned |
Louise Patten |
|
|
19 May 2021 |
Bessie Lee |
|
28 January 2021 |
|
Mark Capone |
|
28 January 2021 |
|
Sally
W. Crawford |
|
13 August 2021 |
|
By order of the Board
Alan
HirzelChief Executive Officer
Michael S
BaldockChief Financial Officer
13 September 2021
Independent review report to Abcam
plcReport on the condensed consolidated interim
financial statements
Our conclusionWe have reviewed
Abcam plc’s condensed consolidated interim financial statements
(the “interim financial statements”) in the interim report of Abcam
plc for the six and twelve month periods ended
30 June 2021 (the “periods”).
Based on our review,
nothing has come to our attention that causes us to believe that
the interim financial statements are not prepared, in all material
respects, in accordance with International Accounting Standard 34,
‘Interim Financial Reporting’, as adopted by the European Union and
the AIM Rules for Companies.
What we have reviewedThe
interim financial statements comprise:
- the consolidated balance sheet as at
30 June 2021;
- the consolidated income statements and consolidated statements
of comprehensive income for the six and twelve month periods then
ended;
- the consolidated cash flow statement for the twelve month
period then ended;
- the consolidated statement of changes in equity for the twelve
month period then ended; and
- the explanatory notes to the interim financial statements.
The interim financial
statements included in the interim report of Abcam plc have been
prepared in accordance with International Accounting Standard 34,
‘Interim Financial Reporting’, as adopted by the European Union and
the AIM Rules for Companies.
As disclosed in note 2
to the interim financial statements, the financial reporting
framework that has been applied in the preparation of the full
annual financial statements of the group is applicable law and
International Financial Reporting Standards (IFRSs) as adopted by
the European Union.
Responsibilities for the interim financial statements
and the review
Our responsibilities and those of the
directorsThe interim report, including the interim
financial statements, is the responsibility of, and has been
approved by the directors. The directors are responsible for
preparing the interim report in accordance with the AIM Rules for
Companies which require that the financial information must be
presented and prepared in a form consistent with that which will be
adopted in the company’s annual financial statements.
Our responsibility is
to express a conclusion on the interim financial statements in the
interim report based on our review. This report, including the
conclusion, has been prepared for and only for the company for the
purpose of complying with the AIM Rules for Companies and for no
other purpose. We do not, in giving this conclusion, accept or
assume responsibility for any other purpose or to any other person
to whom this report is shown or into whose hands it may come save
where expressly agreed by our prior consent in writing.
What a review of interim financial
statements involvesWe conducted our review in accordance
with International Standard on Review Engagements (UK and Ireland)
2410, ‘Review of Interim Financial Information Performed by the
Independent Auditor of the Entity’ issued by the Auditing Practices
Board for use in the United Kingdom. A review of interim financial
information consists of making enquiries, primarily of persons
responsible for financial and accounting matters, and applying
analytical and other review procedures.
A review is
substantially less in scope than an audit conducted in accordance
with International Standards on Auditing (UK) and, consequently,
does not enable us to obtain assurance that we would become aware
of all significant matters that might be identified in an audit.
Accordingly, we do not express an audit opinion.
We have read the other
information contained in the interim report and considered whether
it contains any apparent misstatements or material inconsistencies
with the information in the interim financial statements.
PricewaterhouseCoopers LLPChartered
AccountantsCambridge13 September 2021
Consolidated income statementFor the twelve month period
ended 30 June 2021
|
|
Twelve months ended 30 June 2021(unaudited) |
Year ended 30 June 2020(audited) |
|
Note |
Adjusted*£m |
Adjustingitems*£m |
Total£m |
Adjusted*£m |
Adjustingitems*£m |
Total£m |
Revenue |
|
297.7 |
— |
297.7 |
260.0 |
— |
260.0 |
Cost of sales |
|
(85.9) |
— |
(85.9) |
(79.8) |
— |
(79.8) |
Gross profit |
|
211.8 |
— |
211.8 |
180.2 |
— |
180.2 |
Selling, general and
administrative expenses |
|
(147.4) |
(11.4) |
(158.8) |
(118.3) |
(13.1) |
(131.4) |
Research and development expenses |
|
(18.6) |
(6.2) |
(24.8) |
(17.4) |
(20.9) |
(38.3) |
Operating profit |
|
45.8 |
(17.6) |
28.2 |
44.5 |
(34.0) |
10.5 |
Finance income |
|
0.4 |
— |
0.4 |
0.7 |
— |
0.7 |
Finance costs |
|
(3.2) |
— |
(3.2) |
(2.8) |
— |
(2.8) |
Profit before tax |
|
43.0 |
(17.6) |
25.4 |
42.4 |
(34.0) |
8.4 |
Tax |
5 |
(12.5) |
3.3 |
(9.2) |
(7.7) |
11.8 |
4.1 |
Profit for the period attributable to equity shareholders
of the parent |
|
30.5 |
(14.3) |
16.2 |
34.7 |
(22.2) |
12.5 |
|
|
|
|
|
|
|
|
Earnings per
share |
|
|
|
|
|
|
|
Basic |
6 |
13.7p |
|
7.3p |
16.7p |
|
6.0p |
Diluted |
6 |
13.5p |
|
7.2p |
16.6p |
|
6.0p |
Consolidated income statementFor the six month period
ended 30 June 2021
|
|
Six months ended 30 June 2021(unaudited) |
Six months ended 30 June 2020(unaudited) |
|
Note |
Adjusted*£m |
Adjustingitems*£m |
Total£m |
Adjusted*£m |
Adjustingitems*£m |
Total£m |
Revenue |
|
150.2 |
— |
150.2 |
121.8 |
— |
121.8 |
Cost of sales |
|
(43.0) |
— |
(43.0) |
(37.9) |
— |
(37.9) |
Gross profit |
|
107.2 |
— |
107.2 |
83.9 |
— |
83.9 |
Selling, general and
administrative expenses |
|
(79.3) |
(6.5) |
(85.8) |
(62.2) |
(8.5) |
(70.7) |
Research and development expenses |
|
(8.1) |
(3.0) |
(11.1) |
(10.6) |
(18.7) |
(29.3) |
Operating profit / (loss) |
|
19.8 |
(9.5) |
10.3 |
11.1 |
(27.2) |
(16.1) |
Finance income |
|
0.2 |
— |
0.2 |
0.2 |
— |
0.2 |
Finance costs |
|
(1.3) |
— |
(1.3) |
(1.7) |
— |
(1.7) |
Profit / (loss) before tax |
|
18.7 |
(9.5) |
9.2 |
9.6 |
(27.2) |
(17.6) |
Tax |
5 |
(7.8) |
1.5 |
(6.3) |
(1.9) |
5.9 |
4.0 |
Profit / (loss) for the period attributable to equity
shareholders of the parent |
|
10.9 |
(8.0) |
2.9 |
7.7 |
(21.3) |
(13.6) |
|
|
|
|
|
|
|
|
Earnings per
share |
|
|
|
|
|
|
|
Basic |
6 |
4.8p |
|
1.3p |
3.7p |
|
(6.5p) |
Diluted |
6 |
4.8p |
|
1.3p |
3.6p |
|
(6.5p) |
* Adjusted figures exclude impairment
of intangible assets, system and process improvement costs,
acquisition costs, integration and reorganisation costs,
amortisation of acquisition related intangible assets, the tax
effect of adjusting items and certain individually significant tax
items. Such excluded items are described as “adjusting items”.
Further information on these items is shown in note 4.
Consolidated statement of comprehensive
incomeFor the period ended 30 June
2021
|
Twelve monthsended30 June
2021(unaudited)£m |
Yearended30 June 2020(audited)£m |
Six monthsended30 June
2021(unaudited)£m |
Six monthsended30 June 2020(unaudited)£m |
Profit / (loss) for the period attributable to equity
shareholders of the parent |
16.2 |
12.5 |
2.9 |
(13.6) |
|
|
|
|
|
Items that may be
reclassified to the income statement in subsequent
periods |
|
|
|
|
Movement on cash flow
hedges |
1.1 |
0.7 |
— |
(2.6) |
Exchange differences on
translation of foreign operations |
(22.9) |
9.6 |
(5.4) |
17.5 |
Movement in fair value of
investment |
(3.2) |
4.0 |
(0.1) |
3.8 |
Tax
relating to components of other comprehensive income |
0.6 |
(1.5) |
— |
(0.9) |
Other comprehensive (expense) / income for the
period |
(24.4) |
12.8 |
(5.5) |
17.8 |
|
|
|
|
|
Total comprehensive (expense) / income for the
period |
(8.2) |
25.3 |
(2.6) |
4.2 |
Consolidated balance sheetAs at 30 June
2021
|
Note |
As at30 June
2021(unaudited)£m |
As at30 June 2020(audited)£m |
Non-current assets |
|
|
|
Goodwill |
|
181.0 |
192.8 |
Intangible assets |
|
155.2 |
154.4 |
Property, plant and
equipment |
|
66.2 |
43.3 |
Right-of-use assets |
|
93.8 |
121.4 |
Investments |
10 |
3.5 |
7.0 |
Deferred tax asset |
|
5.1 |
13.7 |
|
|
504.8 |
532.6 |
Current assets |
|
|
|
Inventories |
|
45.9 |
40.7 |
Trade and other
receivables |
|
46.4 |
44.4 |
Current tax receivable |
|
6.9 |
6.4 |
Derivative financial
instruments |
10 |
0.6 |
— |
Cash and cash equivalents |
|
219.9 |
187.3 |
|
|
319.7 |
278.8 |
Total assets |
|
824.5 |
811.4 |
Current liabilities |
|
|
|
Trade and other payables |
|
(57.1) |
(43.8) |
Derivative financial
instruments |
10 |
(0.1) |
(1.2) |
Borrowings |
10 |
— |
(106.4) |
Lease liabilities |
|
(8.1) |
(7.3) |
Current tax liabilities |
|
(1.6) |
(0.9) |
|
|
(66.9) |
(159.6) |
Net current assets |
|
252.8 |
119.2 |
Non-current liabilities |
|
|
|
Deferred tax liability |
|
(20.5) |
(28.7) |
Lease liabilities |
|
(102.4) |
(120.5) |
|
|
(122.9) |
(149.2) |
Total liabilities |
|
(189.8) |
(308.8) |
Net assets |
|
634.7 |
502.6 |
|
|
|
|
Equity |
|
|
|
Share capital |
|
0.5 |
0.4 |
Share premium account |
|
265.5 |
138.2 |
Merger reserve |
|
68.6 |
68.6 |
Own shares |
|
(2.3) |
(2.5) |
Translation reserve |
|
20.0 |
42.9 |
Hedging reserve |
|
0.2 |
(0.7) |
Retained earnings |
|
282.2 |
255.7 |
Total equity attributable to the equity shareholders of the
parent |
|
634.7 |
502.6 |
Approved by the Board of directors and
authorised for issue on 13 September 2021.
Consolidated statement of changes in
equityTwelve months ended 30 June 2021
(unaudited)
|
Sharecapital£m |
Sharepremiumaccount£m |
Mergerreserve£m |
Ownshares£m |
TranslationReserve£m |
Hedgingreserve£m |
RetainedEarnings£m |
Total £m |
Balance as at 1 July 2020 |
0.4 |
138.2 |
68.6 |
(2.5) |
42.9 |
(0.7) |
255.7 |
502.6 |
Profit for the period |
— |
— |
— |
— |
— |
— |
16.2 |
16.2 |
Other
comprehensive (expense) / income |
— |
— |
— |
— |
(22.9) |
0.9 |
(2.4) |
(24.4) |
Total comprehensive expense / income for the
period |
— |
— |
— |
— |
(22.9) |
0.9 |
13.8 |
(8.2) |
Issue of ordinary shares, net of share issue costs |
0.1 |
127.3 |
— |
0.2 |
— |
— |
(0.2) |
127.4 |
Share-based payments inclusive
of deferred tax |
— |
— |
— |
— |
— |
— |
13.0 |
13.0 |
Purchase of own shares |
— |
— |
— |
— |
— |
— |
(0.1) |
(0.1) |
Balance as at 30 June 2021 |
0.5 |
265.5 |
68.6 |
(2.3) |
20.0 |
0.2 |
282.2 |
634.7 |
Year ended 30 June 2020 (audited)
|
Sharecapital£m |
Sharepremiumaccount£m |
Mergerreserve£m |
Ownshares£m |
Translationreserve£m |
Hedgingreserve£m |
Retainedearnings£m |
Total£m |
Balance as at 1 July 2019 |
0.4 |
27.0 |
68.1 |
(2.8) |
33.3 |
(1.3) |
258.6 |
383.3 |
Profit for the period |
— |
— |
— |
— |
— |
— |
12.5 |
12.5 |
Other
comprehensive income |
— |
— |
— |
— |
9.6 |
0.6 |
2.6 |
12.8 |
Total comprehensive income for the period |
— |
— |
— |
— |
9.6 |
0.6 |
15.1 |
25.3 |
Issue of ordinary shares |
— |
111.2 |
0.5 |
0.3 |
— |
— |
(0.3) |
111.7 |
Share-based payments inclusive
of deferred tax |
— |
— |
— |
— |
— |
— |
7.4 |
7.4 |
Purchase of own shares |
— |
— |
— |
— |
— |
— |
(0.1) |
(0.1) |
Equity
dividends |
— |
— |
— |
— |
— |
— |
(25.0) |
(25.0) |
Balance as at 30 June 2020 |
0.4 |
138.2 |
68.6 |
(2.5) |
42.9 |
(0.7) |
255.7 |
502.6 |
Consolidated cash flow statementFor the
period ended 30 June 2021
|
|
Note |
Twelve monthsended30 June
2021(unaudited)£m |
Yearended30 June 2020(audited)£m |
Cash generated from
operations |
|
8 |
77.0 |
65.4 |
Net
income taxes paid |
|
|
(5.1) |
(2.4) |
Net cash inflow from operating activities |
* |
|
71.9 |
63.0 |
Investing activities |
|
|
|
|
Investment income |
|
|
0.4 |
0.7 |
Purchase of property, plant
and equipment |
* |
|
(31.5) |
(12.7) |
Purchase of intangible
assets |
* |
|
(25.7) |
(23.0) |
Transfer of cash from / (to)
escrow in respect of future capital expenditure |
* |
|
0.4 |
(0.6) |
Reimbursement of leasehold
improvement costs |
* |
|
10.7 |
— |
Purchase of investments |
|
|
(0.1) |
(2.2) |
Net cash outflow arising from
acquisitions |
|
|
— |
(110.3) |
Net cash outflow from investing activities |
|
|
(45.8) |
(148.1) |
Financing activities |
|
|
|
|
Dividends paid |
|
9 |
— |
(25.0) |
Principal element of lease
obligations |
* |
|
(8.5) |
(6.8) |
Interest element of lease
obligations |
* |
|
(1.2) |
(0.9) |
Interest paid |
|
|
(0.9) |
(0.8) |
Proceeds on issue of shares,
net of issue costs |
|
|
127.4 |
111.2 |
Utilisation of revolving
credit facility |
|
|
— |
127.0 |
Repayment of revolving credit
facility |
|
10 |
(107.0) |
(20.0) |
Facility arrangement fees |
|
|
(0.8) |
— |
Purchase of own shares |
|
|
(0.1) |
(0.1) |
Net cash inflow from financing activities |
|
|
8.9 |
184.6 |
|
|
|
|
|
Net increase cash and cash equivalents |
|
|
35.0 |
99.5 |
|
|
|
|
|
Cash and cash equivalents at
beginning of period |
|
|
187.3 |
87.1 |
Effect
of foreign exchange rates |
|
|
(2.4) |
0.7 |
Cash and cash equivalents at end of period |
(i) |
|
219.9 |
187.3 |
|
|
|
|
|
Free cash flow |
(ii) |
|
16.1 |
19.0 |
(i) Within cash and cash
equivalents is £1.6m (30 June 2020: £0.9m) of cash relating to
employee contributions to the Group’s share scheme ‘AbShare’, which
is reserved for the purpose of purchasing shares upon vesting.
(ii) Free cash flow
comprises those items marked * and comprises net cash generated
from operating activities less net capital expenditure, transfer of
cash from/(to) escrow in respect of future capital expenditure, and
the principal and interest elements of lease obligations.
Notes to the interim financial
statementsFor the period ended 30 June
2021
1. General
informationThese condensed consolidated interim financial
statements for the twelve and six month periods ended 30 June 2021
are unaudited and do not comprise statutory accounts within the
meaning of section 434 of the Companies Act 2006, but have been
reviewed by the auditor. The financial information for the year
ended 30 June 2020 does not constitute the Company’s statutory
accounts for that period, but has been extracted from those
accounts, which were approved by the Board of Directors on 12
September 2020 and have been delivered to the Registrar of
Companies. The auditor has reported on those accounts, their
opinion was unqualified, did not draw attention to any matters by
way of emphasis and did not contain any statement under section
498(2) or (3) of the Companies Act 2006.
2. Basis of
preparationOn 2 June 2021, the Group announced that it was
extending its current period from 30 June to 31 December. The
financial statements are therefore for the six and the twelve month
periods ended 30 June 2021. This is the second interim financial
reporting period for the 18 month period to 31 December 2021.
The condensed interim financial
statements for the twelve and six month periods ended 30 June 2021
included in this interim financial report have been prepared in
accordance with IAS 34 ‘Interim Financial Reporting’ as adopted by
the European Union and the AIM Rules for Companies, and have been
prepared on a going concern basis as described further below.
a. Accounting policiesThe accounting policies
adopted in the preparation of the condensed consolidated interim
financial statements are those as set out in the Group’s financial
statements for the year ended 30 June 2020. In addition, tax on
income in the interim period is calculated as described in note
5.
New accounting standards and interpretationsThere have not been
any new standards or interpretations adopted in the period which
would have a material financial impact on, or disclosure
requirement for, the Group’s interim report.b. Going
concernThe directors have prepared the interim financial
statements on a going concern basis. In considering going concern,
the directors have considered the Group’s forecasts and
projections, taking account of reasonably possible changes in
trading performance, including the possible effects of COVID-19.
These show that the Group is expected to operate within the limits
of its available resources.
Accordingly, the directors have a
reasonable expectation that the Group has adequate resources to
continue in operation for the foreseeable future and a period of
not less than twelve months from the date of this report.
Accordingly, the going concern basis has been adopted in preparing
the interim financial report.
c. Adjusted performance measuresAdjusted
performance measures are used by the Directors and management to
monitor business performance internally and exclude certain cash
and non-cash items which they believe are not reflective of the
normal day-to-day operating activities of the Group. The Directors
believe that disclosing such non-IFRS measures enables a reader to
isolate and evaluate the impact of such items on results and allows
for a fuller understanding of performance from period to period.
Adjusted performance measures may not be directly comparable with
other similarly titled measures used by other companies. A detailed
reconciliation between reported and adjusted measures is presented
in note 4.
d. Adjustment to the results for the six months ended 31
December 2020Subsequent to the issue of the Group’s
unaudited interim results for the six months ended 31 December
2020, management reviewed and identified that certain accrued
liabilities reflected on the Group’s balance sheet as at 31
December 2020 should be amended. Accordingly, management has
restated its consolidated financial statements as of and for the
six months ended 31 December 2020. As a consequence, the results
presented for the twelve months ended 30 June 2021 include restated
balances for the six months ended 31 December 2020.
Notes to the interim financial statements
(continued)For the period ended 30 June
2021
2. Basis of preparation
(continued)d. Adjustment to the results for the
six months ended 31 December 2020 (continued)The following
table summarises the impact of the adjustment to results for the
six months ended 31 December 2020:
|
As previously reported£’m |
Adjustment£’m |
As restated£’m |
|
|
|
|
Selling, general and
administrative expenses |
(75.4) |
2.4 |
(73.0) |
Adjusting items |
4.9 |
— |
4.9 |
Adjusted selling, general and administrative expenses |
(70.5) |
2.4 |
(68.1) |
|
|
|
|
Operating
profit |
15.5 |
2.4 |
17.9 |
Adjusting items |
8.1 |
— |
8.1 |
Adjusted operating profit |
23.6 |
2.4 |
26.0 |
|
|
|
|
Profit before
tax |
13.8 |
2.4 |
16.2 |
Adjusting items |
8.1 |
— |
8.1 |
Adjusted profit before tax |
21.9 |
2.4 |
24.3 |
|
|
|
|
Tax |
(2.1) |
(0.8) |
(2.9) |
Adjusting items |
(1.8) |
— |
(1.8) |
Adjusted tax |
(3.9) |
(0.8) |
(4.7) |
|
|
|
|
Profit for the
period |
11.7 |
1.6 |
13.3 |
Adjusting items |
6.3 |
— |
6.3 |
Adjusted profit for the period |
18.0 |
1.6 |
19.6 |
|
|
|
|
Total comprehensive expense |
(7.2) |
1.6 |
(5.6) |
|
|
|
|
Earnings per
share |
|
|
|
Basic |
5.3p |
0.8p |
6.1p |
Diluted |
5.3p |
0.7p |
6.0p |
|
|
|
|
Adjusted earnings per share |
|
|
|
Basic |
8.2p |
0.7p |
8.9p |
Diluted |
8.1p |
0.7p |
8.8p |
The adjustment resulted in a £3.1m
decrease to Trade and Other Payables; £0.5m decrease to Inventory;
£0.2m decrease to Property, Plant and Equipment and £0.8m decrease
to Tax Receivable compared to the balances previously reported for
31 December 2020. The balance sheet as at 31 December 2020 is not
presented within these interim financial statements.
Notes to the interim financial statements
(continued)For the period ended 30 June
2021
3. Operating
segmentsThe Directors consider that there is only one core
business activity and there are no separately identifiable business
segments which are engaged in providing individual products or
services or a group of related products and services which are
subject to separate risks and returns. 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 Operating Segments,
which is ‘sales of antibodies and related products’. The Group’s
revenue and assets for this one reportable segment can be
determined by reference to the Group’s income statement and balance
sheet.
Geographical
information
Revenues are attributed to regions
based primarily on customers’ location. The Group’s revenue from
external customers is set out below:
|
|
Twelve monthsended 30 June
2021(unaudited)£’m |
Year ended 30 June 2020(audited)£’m |
Six monthsended 30 June
2021(unaudited)£’m |
Six monthsended 30 June 2020(unaudited)£’m |
The
Americas |
|
119.8 |
112.4 |
61.2 |
52.7 |
EMEA |
(i) |
82.6 |
69.3 |
42.4 |
34.4 |
China |
|
53.2 |
39.5 |
25.8 |
15.7 |
Japan |
|
19.6 |
18.8 |
9.7 |
9.4 |
Rest of Asia |
(i) |
22.5 |
20.0 |
11.1 |
9.6 |
|
|
297.7 |
260.0 |
150.2 |
121.8 |
(i) Revenues for the sub-region of
Central Asia have been reclassified from EMEA to Rest of Asia for
the period ended 30 June 2021. This is to better align our
reporting to sales performance and geographical location. The value
attributable to Central Asia for the twelve months ended 30 June
2021 is £1.4m (year ended 30 June 2020: £1.5m). The value
attributable to Central Asia for the six months ended 30 June 2021
is £0.8m (six months ended 30 June 2020: £0.7m). The comparatives
presented have not been updated for this change.
Revenue by type is shown below:
|
Twelve monthsended 30 June
2021(unaudited)£’m |
Year ended 30 June 2020(audited)£’m |
Six monthsended 30 June
2021(unaudited)£’m |
Six monthsended 30 June 2020(unaudited)£’m |
Catalogue revenue |
280.3 |
243.1 |
141.3 |
112.5 |
|
|
|
|
|
Custom products and
services |
5.1 |
6.3 |
2.4 |
3.0 |
IVD |
5.7 |
4.7 |
3.1 |
3.3 |
Royalties and licenses |
6.6 |
5.9 |
3.4 |
3.0 |
Custom products and licensing |
17.4 |
16.9 |
8.9 |
9.3 |
Total reported revenue |
297.7 |
260.0 |
150.2 |
121.8 |
Notes to the interim financial statements
(continued)For the period ended 30 June
2021
4. Adjusted performance
measuresA reconciliation of the Group’s adjusted
performance measures to reported IFRS measures is presented
below:
|
Twelve months ended 30 June 2021(unaudited) |
Year ended 30 June 2020 (audited) |
|
Adjusted£m |
Adjusting items£m |
Total£m |
Adjusted£m |
Adjusting items£m |
Total£m |
EBITDA |
71.9 |
(8.3) |
63.6 |
65.7 |
(10.4) |
55.3 |
Depreciation and amortisation |
(26.1) |
(9.3) |
(35.4) |
(21.2) |
(23.6) |
(44.8) |
Operating profit |
45.8 |
(17.6) |
28.2 |
44.5 |
(34.0) |
10.5 |
Finance income |
0.4 |
— |
0.4 |
0.7 |
— |
0.7 |
Finance costs |
(3.2) |
— |
(3.2) |
(2.8) |
— |
(2.8) |
Profit before tax |
43.0 |
(17.6) |
25.4 |
42.4 |
(34.0) |
8.4 |
Tax |
(12.5) |
3.3 |
(9.2) |
(7.7) |
11.8 |
4.1 |
Profit for the period/year |
30.5 |
(14.3) |
16.2 |
34.7 |
(22.2) |
12.5 |
|
Six months ended 30 June 2021(unaudited) |
Six months ended 30 June 2020(unaudited) |
|
Adjusted£m |
Adjusting items£m |
Total£m |
Adjusted£m |
Adjusting items£m |
Total£m |
EBITDA |
34.9 |
(5.2) |
29.7 |
22.5 |
(7.0) |
15.5 |
Depreciation and amortisation |
(15.1) |
(4.3) |
(19.4) |
(11.4) |
(20.2) |
(31.6) |
Operating profit |
19.8 |
(9.5) |
10.3 |
11.1 |
(27.2) |
(16.1) |
Finance income |
0.2 |
— |
0.2 |
0.2 |
— |
0.2 |
Finance costs |
(1.3) |
— |
(1.3) |
(1.7) |
— |
(1.7) |
Profit before tax |
18.7 |
(9.5) |
9.2 |
9.6 |
(27.2) |
(17.6) |
Tax |
(7.8) |
1.5 |
(6.3) |
(1.9) |
5.9 |
4.0 |
Profit for the period |
10.9 |
(8.0) |
2.9 |
7.7 |
(21.3) |
(13.6) |
An analysis of adjusting items is
presented below:
|
|
Twelve monthsended 30 June
2021(unaudited) £m |
Year ended 30 June 2020(audited) £m |
Six monthsended 30 June
2021(unaudited)£m |
Six monthsended 30 June 2020(unaudited) £m |
Affecting
EBITDA |
|
|
|
|
|
System and process improvement costs |
(i) |
(3.8) |
(4.3) |
(2.0) |
(2.2) |
Acquisition costs |
(ii) |
(1.0) |
(4.1) |
(1.0) |
(2.8) |
Integration and reorganisation costs |
(iii) |
(3.5) |
(2.0) |
(2.2) |
(2.0) |
|
|
(8.3) |
(10.4) |
(5.2) |
(7.0) |
|
|
|
|
|
|
Affecting depreciation
and amortisation |
|
|
|
|
|
Impairment of
intangible assets |
(iv) |
— |
(14.9) |
— |
(14.9) |
Integration and reorganisation costs |
(iii) |
(0.9) |
(0.1) |
(0.3) |
(0.1) |
Amortisation of acquisition related intangible assets |
(v) |
(8.4) |
(8.6) |
(4.0) |
(5.2) |
|
|
(9.3) |
(23.6) |
(4.3) |
(20.2) |
|
|
|
|
|
|
Affecting operating profit and profit before
tax |
|
(17.6) |
(34.0) |
(9.5) |
(27.2) |
|
|
|
|
|
|
Affecting
tax |
|
|
|
|
|
Tax effect of adjusting items |
|
3.3 |
7.2 |
1.5 |
6.0 |
Credit arising
from patent box claims |
(vi) |
— |
4.6 |
— |
(0.1) |
Affecting tax |
|
3.3 |
11.8 |
1.5 |
5.9 |
|
|
|
|
|
|
Total adjusting items after tax |
|
(14.3) |
(22.2) |
(8.0) |
(21.3) |
Notes to the interim financial statements (continued)For
the period ended 30 June 2021
4. Adjusted performance
measures (continued)(i) Comprises costs of the ERP
implementation which do not qualify for capitalisation. Such costs
are included within selling, general and administrative
expenses.(ii) Comprises legal and other professional fees
associated with the acquisition of the Expedeon business (for the
year and six months ended 30 June 2020) and the proposed
acquisition of BioVision Inc. Such costs are included within
selling, general and administrative expenses.(iii) Twelve and six
months ended 30 June 2021: Integration and reorganisation costs
largely relate to the reorganisation and property related costs in
respect of the alignment of the Group’s operating structure and
geographic footprint to its strategic goals. Year and six months
ended 30 June 2020: Integration and reorganisation costs relate
partly to the integration of Expedeon (comprising mainly retention
and severance costs as well as employee backfill costs for those
involved in the integration). These costs are included in selling,
general and administrative expenses.(iv) Comprises the full
impairment of the acquisition intangible in respect of AxioMx in
Vitro monoclonal antibody production technology (AxioMx acquired
technology) and subsequent post acquisition expenditure
capitalised. This arose following an appraisal of the ability to
utilise at scale this technology whereby although technical
feasibility remained valid, the challenges to realise material
commercial returns resulted in the conclusion not to pursue further
active development and substantive utilisation of this technology.
The impairment charge is included within research and development
expenses.(v) For the twelve month period to 30 June 2021, £6.2m
(2020: £6.0m) of amortisation of acquisition intangibles is
included in research and development expenses, with the remaining
£2.2m (2020: £2.6m) included in selling, general and administrative
expenses. For the six month period to 30 June 2021, £3.0m (2020:
£4.2m) of amortisation is included in research and development
expenses, with the remaining £1.0m (2020: £1.0m) included in
selling, general and administrative expenses.(vi) Comprises a
one-off credit for historical periods for the benefit from the
lower tax rate applied to profits on income from patented products
under HMRC’s ‘patent box’ regime following successful registration
of patents during the period.
Notes to the interim financial statements (continued)For
the period ended 30 June 2021
5. Income taxThe
major components of the income tax expense / (credit) in the income
statement are as follows:
|
Twelve monthsended30 June
2021(unaudited)£m |
Yearended30 June 2020(audited)£m |
Six monthsended30 June
2021(unaudited)£m |
Six monthsended30 June 2020(unaudited)£m |
Current tax |
|
|
|
|
Current income tax charge |
7.1 |
4.8 |
3.1 |
4.8 |
Adjustment in respect of prior
years |
0.4 |
(0.9) |
0.4 |
(0.9) |
|
7.5 |
3.9 |
3.5 |
3.9 |
|
|
|
|
|
Deferred
tax |
|
|
|
|
Origination and reversal of
temporary differences |
(2.1) |
(9.1) |
(1.0) |
(9.0) |
Adjustment in respect of prior
years |
0.3 |
0.9 |
0.3 |
0.9 |
Effect of tax rate change |
3.5 |
0.2 |
3.5 |
0.2 |
|
1.7 |
(8.0) |
2.8 |
(7.9) |
|
|
|
|
|
Total income tax charge / (credit) |
9.2 |
(4.1) |
6.3 |
(4.0) |
|
|
|
|
|
Adjusted income tax charge* |
12.5 |
7.7 |
7.8 |
1.9 |
* Adjusted income tax charge excludes the tax effects of
adjusting items as set out in note 4.
The Group reported a net tax charge of £9.2m (12 months ended 30
June 2021: credit of £4.1m) primarily due to the requirement to
restate those deferred tax balances which are foreseen to reverse
after 31 March 2023 at the UK Corporation Tax rate of 25% applying
after that date. The change in UK Corporation Tax rates was enacted
on 15 June 2021.
The UK Corporation Tax rate for the twelve months ended 30 June
2021 was 19% (twelve months ended 30 June 2020: 19%). Taxation for
other jurisdictions is calculated at the rate prevailing in the
relevant jurisdictions.
Effective tax rates represent management’s best estimate of the
average annual effective tax rate on reported or adjusted profits
with these rates being applied to the twelve months / six months
results.
The estimated effective rate of tax on
reported profits for the twelve months ending 30 June 2021 is
approximately 36.2% and for the six months ending 30 June 2021 is
approximately 68.5% (twelve months ended 30 June 2020: (48.8%); six
months ended 30 June 2020: 22.7%), representing management’s best
estimate of the average annual effective tax rate on profits
expected for the twelve month period. This effective tax rate
includes the effect of the change in tax rate applying on deferred
tax balances.
The estimate effective rate of tax on
adjusted profits for the twelve months ending 30 June 2021 is
approximately 29.1% and for the six months ending 30 June 2021 is
approximately 41.7% (twelve months ended 30 June 2020 18.2%; six
months ended 30 June 2020 19.8%)
Notes to the interim financial statements (continued)For
the period ended 30 June 2021
6. Earnings per
shareThe calculation of earnings per ordinary share (EPS)
and adjusted earnings per ordinary share (adjusted EPS) are based
on profit after tax, and adjusted profit after tax, respectively,
attributable to owners of the parent and the weighted number of
shares in issue during the period/year.
Adjusted EPS figures have been
calculated based earnings before adjusting items which are
considered significant in nature or value and which are described
in note 4.
|
Twelve monthsended30 June
2021(unaudited)£m |
Year ended30 June 2020(audited)£m |
Six monthsended30 June
2021(unaudited)£m |
Six monthsended30 June 2020(unaudited)£m |
Profit attributable to equity shareholders of the parent -
adjusted |
30.5 |
34.7 |
10.9 |
7.7 |
Adjusting items |
(14.3) |
(22.2) |
(8.0) |
(21.3) |
Profit attributable to equity shareholders of the parent –
total reported |
16.2 |
12.5 |
2.9 |
(13.6) |
|
Million |
Million |
Million |
Million |
Weighted average number of
ordinary shares in issue |
223.3 |
208.0 |
226.7 |
209.9 |
Less ordinary shares held by Equiniti Share Plan Trustees
Limited |
(0.4) |
(0.4) |
(0.4) |
(0.4) |
Weighted average number of ordinary shares for the purposes
of basic EPS |
222.9 |
207.6 |
226.3 |
209.5 |
Effect of potentially dilutive
ordinary shares – share options and awards |
3.1 |
2.0 |
3.1 |
2.1 |
Weighted average number of ordinary shares for the purposes
of diluted EPS |
226.0 |
209.6 |
229.4 |
211.6 |
Basic EPS and adjusted EPS are
calculated by dividing the earnings attributable to the equity
shareholders of the parent by the weighted average number of shares
outstanding during the period/year. Diluted EPS and adjusted
diluted EPS are calculated by adjusting the weighted average number
of ordinary shares outstanding to assume conversion of all
potentially dilutive ordinary shares. Such potentially dilutive
ordinary shares comprise share 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 period and any
unvested shares which have met, or are expected to meet, the
performance conditions at the end of the reporting period.
|
Twelve monthsended30 June
2021(unaudited) |
Yearended30 June 2020(audited) |
Six monthsended30 June
2021(unaudited) |
Six monthsended30 June 2020(unaudited) |
Basic EPS |
7.3p |
6.0p |
1.3p |
(6.5)p |
Diluted EPS |
7.2p |
6.0p |
1.3p |
(6.5)p |
Adjusted basic EPS |
13.7p |
16.7p |
4.8p |
3.7p |
Adjusted diluted EPS |
13.5p |
16.6p |
4.8p |
3.6p |
7. Issue of share
capitalOn 9 April 2020, the Company issued 10,000,000 new
ordinary shares of 0.2 pence each to Durable Capital Partners LP at
an issue price of £11.00 per share, raising £110.0m. Other share
capital issued during the year ended 30 June 2020 arose from the
exercise of share options and the issue of shares to the Equiniti
Share Plan Trustees Limited.
On 26 October 2020, the Group closed
its offering of an aggregate of 10,287,000 American Depositary
Shares ("ADSs") representing 10,287,000 ordinary shares at a price
of $17.50 per ADS, following the Group’s secondary
listing on Nasdaq. The net proceeds from this offering, net of
issue costs of £2.1m, were £126.5m. In addition, £0.9m of proceeds
from the issuance of share options and awards to employees were
received during the period.
Notes to the interim financial statements (continued)For
the period ended 30 June 2021
8. Notes to the cash flow
statement
|
|
Twelve monthsended30 June
2021(unaudited)£m |
Yearended30 June 2020(audited)£m |
Operating profit for the period |
|
28.2 |
10.5 |
Adjustments for: |
|
|
|
Depreciation of property, plant and equipment |
|
8.8 |
7.3 |
Depreciation of right-of-use assets |
|
8.0 |
6.7 |
Amortisation of intangible assets |
|
18.6 |
15.9 |
Impairment of intangible assets |
|
— |
14.9 |
Loss on disposal of property, plant and equipment |
|
0.5 |
— |
Derivative financial instruments at fair value through profit or
loss |
|
(0.6) |
— |
Research and development expenditure credit |
|
(1.4) |
(1.5) |
Share-based payments charge |
|
13.6 |
9.3 |
Unrealised currency translation losses/(gains) |
|
1.6 |
(1.7) |
Operating cash flows before movements in working
capital |
|
77.3 |
61.4 |
Increase in inventories |
|
(6.8) |
(1.1) |
(Increase) / decrease in
receivables |
|
(6.7) |
2.7 |
Increase in payables |
|
13.2 |
2.4 |
Cash generated from operations |
|
77.0 |
65.4 |
9. Dividends
|
Twelve monthsended30 June
2021(unaudited)£m |
Yearended30 June 2020(audited)£m |
Amounts recognised as
distributions to equity shareholders in the period: |
|
|
Final dividend for the year ended 30 June 2019 |
— |
17.7 |
Interim dividend for the year ended 30 June 2020 |
— |
7.3 |
|
— |
25.0 |
Notes to the interim financial statements (continued)For
the period ended 30 June 2021
10. Financial instruments and
risk managementThe Group’s activities expose it to a
variety of financial risks that include currency risk, interest
rate risk, credit risk and liquidity risk.
The condensed interim financial
statements do not include all financial risk management information
and disclosures required in the annual financial statements;
accordingly, they should be read in conjunction with the Group’s
financial statements for the year ended 30 June 2020. There have
been no changes to the risk management policies since the year
ended 30 June 2020.
The table below analyses financial
instruments carried at fair value by valuation method. The
different levels have been defined as follows:
- Level 1 fair value measurements are
those derived from quoted prices (unadjusted) in active markets for
identical assets or liabilities;
- Level 2 fair value measurements are
those derived from inputs other than quoted prices included within
Level 1 that are observable for the asset or liability, either
directly (i.e. as prices) or indirectly (i.e. derived from prices);
and
- Level 3 fair value
measurements are those derived from valuation techniques that
include inputs for the asset or liability that are not based on
observable market data (unobservable market inputs).
The following table presents the
Group’s assets and liabilities carried at fair value by valuation
method.
30 June 2021 |
Level 1£m |
Level 2£m |
Level 3£m |
Total£m |
Assets |
|
|
|
|
Derivative financial
instruments |
— |
0.6 |
— |
0.6 |
Investments |
1.3 |
— |
2.2 |
3.5 |
Total assets |
1.3 |
0.6 |
2.2 |
4.1 |
Liabilities |
|
|
|
|
Derivative financial
instruments |
— |
(0.1) |
— |
(0.1) |
Total liabilities |
— |
(0.1) |
— |
(0.1) |
30 June 2020 |
Level 1£m |
Level 2£m |
Level 3£m |
Total£m |
Assets |
|
|
|
|
Derivative financial
instruments |
— |
— |
— |
— |
Investments |
4.8 |
— |
1.9 |
6.7 |
Total assets |
4.8 |
— |
1.9 |
6.7 |
Liabilities |
|
|
|
|
Derivative financial
instruments |
— |
(1.2) |
— |
(1.2) |
Total liabilities |
— |
(1.2) |
— |
(1.2) |
There were no transfers between levels
during the period.
The Group’s Level 2 financial
instruments consist of forward foreign exchange contracts fair
valued using forward exchange rates that are quoted in an active
market.
The Group continues to generate
significant amounts of US Dollars, Euros, Japanese Yen and Chinese
Renminbi in excess of payments in these currencies and has hedging
arrangements in place to reduce its exposure to currency
fluctuations.
Notes to the interim financial statements (continued)For
the period ended 30 June 2021
10. Financial instruments and
risk management (continued)The following table details the
forward exchange contracts outstanding as at the period end:
Maturing in |
US Dollars |
Euros |
Japanese Yen |
Chinese Renminbi |
Sell $m |
Averagerate |
Sell €m |
Averagerate |
Sell ¥m |
Averagerate |
Sell ¥m |
Averagerate |
Period ending 31 December 2021 |
0.4 |
1.34 |
15.0 |
1.13 |
603 |
145.5 |
49.1 |
9.1 |
Year ending 31 December 2022 |
0.1 |
1.39 |
5.4 |
1.15 |
384 |
151.1 |
12.3 |
9.2 |
The Group’s Level 3 financial
instruments consist of unlisted equity shares.
The fair value of the unquoted equity
shares can be determined as management monitors the ongoing
performance of the investment.
BorrowingsOn 23
November 2020, the Group repaid in full the sum of £107.0m which
was drawn under its Revolving Credit Facility (RCF). As at 30 June
2021, the Group did not have any outstanding drawings on its £200m
RCF (with a £100m accordion option) and which expires in January
2024.
11. Capital
commitmentsAs at 30 June 2021, the Group had capital
commitments of £11.4m (30 June 2020: £5.9m) relating to the
acquisition of property, plant and equipment and intangible
assets.
12. Post balance sheet
eventOn 2 August 2021, the Company announced that it had
entered into a definitive agreement to acquire BioVision, Inc., a
wholly owned subsidiary of Boai NKY Medical Holdings Ltd for cash
consideration of $340 million. The acquisition is subject to
review and approval of the Shenzhen Stock Exchange and by a vote of
the shareholders of Boai NKY Medical Holdings Ltd. If approved, the
acquisition is expected to close before the end of the 2021
calendar year.Risks and uncertaintiesThe principal risks and
uncertainties which the Group faces in the undertaking of its
day-to-day operations and in pursuit of its longer-term objectives
are set out in the Annual Report and Accounts 2020 on pages 52 to
57 and in note 4 to the consolidated financial statements.
Information on financial risk management is set out in note 26 to
the consolidated financial statements. A copy of the Annual Report
and Accounts is available on the Group's website
www.abcamplc.com/investors/reports-presentations/.
The principal risks and risk profile of the Group have not
changed over the interim period and are not expected to change over
the next six months.
The principal risks remain as:
Principal risk |
Description and relevance |
1. Competition and customer |
The risk of competitors introducing new technologies, channels or
workarounds, strengthening product offerings and routes to
market. |
2. Acquisitions and integrations |
Risks include overvaluation of targets, failing to identify issues
or risks in due diligence or failing to integrate acquired
operations or technologies effectively in order to realise the
benefits. There is also a risk of failure to identify and acquire
businesses which could bring added value. |
3.
People and resources |
The risk of failure to recruit and develop people at the right rate
to support Abcam’s strategy, failing to maintain an engaged and
motivated workforce or to provide the tools and resources for
employees to do their work effectively. |
4.
Transformation projects |
The risk of failure to deliver on Abcam’s transformational growth
projects, including our ongoing ERP implementation and reinvention
of the digital channel. |
5.
Cyber security and IT infrastructure |
The risk that Abcam fails to operate IT systems, software and
hardware that are sufficiently effective, reliable and robust to
support the business in its operations, or that Abcam’s critical IT
infrastructure is compromised or subject to cyber attack. |
6.
Geopolitical/economic disruption and research funding |
The risk of unfavourable geopolitical or economic changes,
including the risk of a substantial reduction in funding for life
sciences research in one of Abcam’s significant territories |
7.
Business continuity |
The risk that a disruptive event or disaster occurs at a key
facility, impacting our ability to serve customers. |
8.
Laws, regulations, legislation and compliance |
Failure to comply with legislation and regulation in the markets
and countries in which Abcam operates. |
9. Ethical business and CSR |
The risk of not meeting high standards of quality and ethical
business practice. |
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