TIDMABC
RNS Number : 5466Y
ABCAM Plc
06 March 2017
ABCAM PLC
Interim Results delivering double digit sales growth
- Revenue growth of 30.4% (10.0% constant currency)(1) continued to exceed market growth
- Maintain guidance of 9-11% constant currency revenue growth for full year
Cambridge, UK: Abcam plc (AIM: ABC), a global leader in the
supply of life science research tools announces its interim results
for the six-month period ended 31 December 2016(*) .
Financial highlights
-- Total revenue growth of 30.4% on a reported basis to
GBP102.5m (H1 2016: GBP78.6m) and 10.0% on a constant currency
basis
-- Catalogue revenue growth of 31.2% on a reported basis to
GBP95.6m (H1 2016: GBP72.9m) and 10.7% on a constant currency
basis
o RabMAb(R) revenues grew by 50.0% to GBP19.2m on a reported
basis and by 26.6% on a constant currency basis
o Non-primary antibody revenues grew by 37.1% to GBP19.5m on a
reported basis and by 15.6% on a constant currency basis
-- Reported gross margin of 69.7% following the reclassification
of certain expenses from operating expenses to gross margin. On a
like-for-like basis, gross margin was 70.7% (H1 2016: 69.3%)
-- EBITDA margin of 34.5% (H1 2016: 32.5%) and 35.1% (H1 2016: 34.5%) on an adjusted basis(2)
-- Reported operating margin of 27.6% (H1 2016: 26.8%) and
adjusted(3) operating margin of 31.2% (H1 2016: 30.7%). Profit
before tax (PBT) on a reported basis was GBP25.1m (H1 2016:
GBP20.9m) and GBP32.1m (H1 2016: GBP24.3m) on an adjusted
basis(4)
-- Reported diluted earnings per share (EPS) increased by 16.3%
to 9.72 pence (H1 2016: 8.36 pence). Adjusted(5) diluted EPS
increased by 33.4% to 12.86 pence (H1 2016: 9.64 pence)
-- Interim dividend increased by 20.0% to 2.825 pence (2016: 2.354 pence)
Operational highlights
-- Leading industry discussions to develop industry quality
standards; established new standards for quality through knockout
validation and other techniques
-- Used the Firefly platform to expand the kits/assays range by
introducing 93 validated antibody pairs and validated a range of
these pairs in multiplex immunoassays
-- Further expanded our addressable market in custom products
and licensing by providing 'Abcam Inside' for multiple diagnostic
development partners, building on the success we established with
PD-L1 last year
-- Accelerated AxioMx technology milestone payments in
recognition of technical success that the team demonstrated with
the unique antibody development capabilities at AxioMx
-- Completed the detailed design phase of the global ERP system,
broadened the scope and moved into the build and deployment phases
of the project
-- Completed recruitment of the Executive Leadership Team with
the addition of leaders in information technology and the newly
formed manufacturing and supply chain organisation
-- Planning permission granted and lease agreed for a new
purpose-built facility for Abcam's global HQ at the expanding
Biomedical Campus in Cambridge, UK, with expected occupancy in FY
2019
Commenting on the interim results, Alan Hirzel, Abcam's Chief
Executive Officer, said:
"We are pleased to have delivered double-digit sales growth and
our profit goals in the first half. These results arise from the
quality products and service our team offers researchers globally.
Collectively, they are making it possible for Abcam to become the
most influential life science company for researchers worldwide. We
continue to invest in our teams, our systems and our facilities to
allow us to grow; and, as we look to the traditionally stronger
second half of this financial year, we remain confident in our
long-term strategy and the progress we are making in achieving our
annual goals."
1. Constant currency is calculated by applying prior period's
actual exchange rates to this period's results.
2. Excluding acquisition and integration costs, the change in
fair value of contingent consideration and the initial incremental
costs associated with the investment in systems and processes.
3. Excluding acquisition costs, the change in fair value of
contingent consideration, amortisation of acquisition-related
intangible assets, acquisition integration costs and the initial
incremental costs associated with the investment in systems and
processes.
4. Excluding acquisition costs, the change in fair value of
contingent consideration, unwinding of discount factor on
contingent consideration and fees, amortisation of
acquisition-related intangible assets, acquisition integration
costs and the initial incremental costs associated with the
investment in systems and processes.
5. Excluding acquisition and integration costs, the initial
incremental costs of system and process improvements, unwinding of
discount factor on contingent consideration and fees, the change in
fair value of contingent consideration, amortisation of
acquisition-related intangible assets and the tax effect of
adjusting items.
See Notes 7 and 13 for detailed reconciliations between reported
and adjusted measures.
*This announcement, including any information included or
incorporated by reference in this announcement, may contain
forward-looking statements (including words such as 'believe',
'expect', 'estimate', 'intend', 'anticipate' and words of similar
meaning) which are based upon current expectations and assumptions
regarding anticipated developments and other factors affecting the
Abcam Group. All statements other than statements of historical
facts may be forward-looking statements and should not be treated
as guarantees of future performance. These forward-looking
statements involve risks and uncertainties, many of which are
beyond the control of the Abcam Group, and there are important
factors that could cause actual results to differ materially from
those expressed or implied by these forward-looking statements.
These forward-looking statements speak only as at the date of this
announcement and accordingly undue reliance should not be placed on
such statements. The Abcam Group does not assume any obligation to,
and does not intend to, revise or update these forward-looking
statements, except as required pursuant to applicable law.
For further information please contact:
Abcam + 44 (0) 1223 696 000
Alan Hirzel, Chief Executive Officer
Gavin Wood, Chief Financial Officer
Julia Wilson, Investor Relations
J.P. Morgan Cazenove - Nominated Advisor & Corporate Broker + 44 (0) 20 7742 4000
James Mitford / Chris Cargill
FTI Consulting + 44 (0) 20 3727 1000
Ben Atwell / Brett Pollard / Natalie Garland-Collins
Notes for editors:
About Abcam plc
As an innovator in reagents and tools, Abcam's purpose is to
serve life science researchers globally to achieve their mission,
faster. Providing the research and clinical communities with tools
and scientific support, the Company offers highly validated
biological binders and assays to address important targets in
critical biological pathways.
Already a pioneer in data sharing and ecommerce in the life
sciences, Abcam's ambition is to be the most influential company in
life sciences by helping advance global understanding of biology
and causes of disease, which, in turn, will drive new treatments
and improved health. Two-thirds of the world's 750,000 life science
researchers use Abcam's affinity binders, reagents, biomarkers and
assays and the Company's products are mentioned in over 20,000 of
the 56,000 peer-reviewed papers published each year in the life
sciences
By actively listening to and collaborating with researchers, the
Company continuously advances its portfolio to address their needs.
A transparent programme of customer reviews and datasheets,
combined with an industry-leading validation initiative, gives
researchers increased confidence in their results.
Abcam's twelve locations are in the world's leading life science
research hubs, enabling local services and multi-language support.
Founded in 1998 and headquartered in Cambridge, UK, the Company
sells to more than 100 countries. Abcam was admitted to AIM in 2005
(AIM: ABC).
To find out more, please visit www.abcam.com and
www.abcamplc.com.
Interim management report
Performance in the period
On a constant currency basis (in which we assume exchange rates
remain unchanged from H1 2016), Abcam delivered Catalogue revenue
growth of 10.7% and 10.0% growth in total revenues when compared to
the same period last year. Overall reported revenues increased by
30.4% in H1 2017.
For catalogue products, all geographic areas and main product
categories are performing at levels above underlying market growth
rates, with China continuing to be our fastest growing major
market. Custom product and licensing revenues are in line with our
expectations, with strong underlying growth in development and
licensing programmes, with strategic customers offsetting the first
stages of an expected decline in royalty income. As expected,
royalty income will be lower in H2 as certain patents expire. We
anticipate custom products and licensing revenue to return to
growth in FY 2018.
Reported revenue
------------------------------ ------------------ ------------ ---------
H1 H1
2017 2016
------------------------------
GBP000 GBP000 Constant
Increase currency
in reported growth
revenue rate
------------------------------ --------- ------- ------------ ---------
Geographic split
The Americas 40,058 30,967 29.4% 8.5%
EMEA 26,776 21,841 22.6% 6.4%
Japan 7,987 5,432 47.0% 5.9%
China 13,518 9,293 45.5% 29.5%
Rest of Asia Pacific 7,286 5,334 36.6% 13.2%
------------------------------ --------- ------- ------------ ---------
Catalogue revenue 95,625 72,867 31.2% 10.7%
Other revenue* 6,885 5,758 19.6% 0.5%
------------------------------ --------- ------- ------------ ---------
Total reported revenue 102,510 78,625 30.4% 10.0%
------------------------------ --------- ------- ------------ ---------
Product split
Core primary antibodies 56,920 45,839 24.2% 4.8%
RabMAb(R) primary antibodies 19,160 12,773 50.0% 26.6%
Non-primary antibody products 19,545 14,255 37.1% 15.6%
------------------------------ --------- ------- ------------ ---------
Catalogue revenue 95,625 72,867 31.2% 10.7%
------------------------------ --------- ------- ------------ ---------
*Includes royalty income, custom products and licensing
revenue.
The Group benefited from the significant weakening of Sterling
against the major currencies in which we operate (principally USD,
Euro, Yen and RMB) following the UK's vote to leave the European
Union on 23 June 2016.
Reported gross margins were 69.7%. This is following the
reclassification of certain inbound expenses, which we believe are
better included in gross margin due to their nature, but which had
historically been included in operating expenses. On a
like-for-like basis, gross margin was 70.7% (H1 2016: 69.3%). This
increase in gross margin was driven by foreign exchange and a
favourable product mix in H1 2017.
EBITDA was GBP35.5m (H1 2016: GBP25.6m). Adjusted EBITDA was
GBP35.9m (H1 2016: GBP27.1m), giving an adjusted EBITDA margin of
35.1% (H1 2016: 34.5%). Note 13 gives a detailed reconciliation
between operating profit, EBITDA and adjusted EBITDA.
PBT on a reported basis was GBP25.1m (H1 2016: GBP20.9m).
Adjusted PBT was GBP32.1m (H1 2016: GBP24.3m), giving an adjusted
PBT margin of 31.4% (H1 2016: 30.8%). Please refer to note 13 for a
detailed reconciliation between reported and adjusted PBT.
Diluted EPS was 9.72 pence per share (H1 2016: 8.36 pence).
Adjusted diluted EPS increased by 33.4% to 12.86 pence per share
(H1 2016: 9.64 pence). Please refer to note 7 for a detailed
reconciliation between reported and adjusted EPS.
Cash generated from operations increased to GBP40.0m (H1 2016:
GBP26.0m), with a 38% increase in pre-working capital inflow
combined with a decrease in working capital. Reduced cash absorbed
in receivables and expended in payables during H1 2017 provided
GBP5.9m additional inflow versus H1 2016 due to good cash
collection from a stronger year-end receivable position, coupled
with one-off inflows from royalty receipts, landlord reimbursement
for building improvements and a large custom service deposit.
Despite increases in capital expenditure in the period (GBP10.6m
spend; H1 2016: GBP6.9m), mainly from GBP5.2m spend relating to the
investment in new systems and processes, and GBP2.1m improvement in
laboratory facilities and equipment across the Group, combined with
further outflows of GBP7.4m (H1 2016: GBPnil) for contingent
consideration payments and GBP13.3m (H1 2016: GBP12.0m) for the
final dividend for FY 2016, closing cash still increased in the
period to end at GBP76.4m.
Dividend
An interim dividend of 2.825 pence per share will be paid on 13
April 2017 to shareholders whose names are on the register at close
of business on 17 March 2017. The associated ex-dividend date will
be 16 March 2017.
Business commentary
Abcam's ongoing focus is to become the most influential life
science company for researchers worldwide and the double-digit
growth we have seen over recent years is testament to the
successful execution of our strategy.
We are a global leader in the sale of research antibodies and,
through in-house development, as well as through acquisitions and
partnerships, we continue to provide scientists with the latest
tools and technologies to advance their research. Alongside that,
we have built up a reputation for providing comprehensive and open
data, fast delivery, excellent customer service and expert
technical support. We are always looking to improve customer
experience in finding, buying and using our products and we
continue to invest in big data and predictive analytics that enable
us to serve customer needs better.
Over the past few years we have seen strong growth from the
primary antibody part of our business, which continues to outpace
market growth rates, largely driven by RabMAb(R) product revenue.
China continues to be our fastest growing major market where we
have been successful in growing both our non-primary as well as
core primary businesses.
We have a history of growing through M&A as well as
organically and we have seen good progress from our most recent
acquisitions. Over the period, we have successfully transitioned
the Firefly platform from miRNA detection to a biomarker analysis
platform to detect changes in protein and miRNA levels. We have
also launched our first multiplex immunoassay products and now have
100 analyte kits available to detect mouse and human targets. In
addition, we have completed a number of milestones relating to
R&D and intellectual property with our AxioMx objectives and
continue to add products to the catalogue. In recognition of the
technical progress, in November 2016 we accelerated the AxioMx
technology milestone payments resulting in a saving of $4.5m from
the maximum amounts payable under these milestones.
Beyond our expertise in the development and sale of research
antibodies, we have strong capabilities in custom products,
specifically custom antibodies and licensing of these antibodies
into diagnostic applications, and in the treatment of disease. We
are building on the success we have seen with the PD-L1 RabMAb(R)
product (clone 28-8) that has now been approved as a diagnostic and
is available on our catalogue where it has become one of the most
cited antibodies of its type.
We have materially strengthened our commercial and development
teams to support our custom product development capabilities. This
has allowed us to initiate multiple development agreements with
leading biopharmaceutical companies to support their clinical
programmes. In addition, we have established a number of supply
agreements with instrument partners to ensure that Abcam's
differentiated content is available to scientists across the
broadest range of innovative platforms. We are confident that our
efforts in this area will open up multiple and sustainable revenue
streams for the Company.
Abcam is a rapidly growing organisation and it is important that
we have the infrastructure to support this growth, both from a
systems and processes perspective. Key to this is the
implementation of a global ERP system. After an extensive selection
process, both of the platform and of an implementation partner, we
selected Oracle Fusion as the core cloud-based ERP software
provider. The detailed design phase of the project was completed
during the period and we have moved into the build and deployment
phases of the programme, with a phased approach to the roll-out of
the system. We expect to complete the project in calendar year 2017
and for it to be fully embedded in 2018.
As we have moved through the design phase and into the build
phase, we have chosen to adopt additional functionality,
particularly a warehouse management system (WMS), as well as
increasing testing, training and change management activities to
provide further assurance on the quality of our ERP system at go
live. We now expect that the cost of the project will be in the
region of GBP35m to GBP37m, split between CAPEX of GBP22m to GBP24m
and OPEX of GBP13m. We believe the ERP investment will give
multiple advantages, including allowing us to scale the business
without increasing the headcount by as much as would otherwise be
the case; improving consumer interaction and conversion; better
information for decision making; and a significant improvement in
integrating and delivering value from any future strategic
acquisitions or investments.
We have committed to the lease of our global headquarters on the
Cambridge Biomedical Campus following the grant of planning
permission. This will allow us to combine our three existing
Cambridge-based facilities into a single state-of-the-art building.
We expect occupancy in FY 2019. The total build cost will be in the
region of GBP46.3m with Abcam contributing approximately GBP16m.
Additionally, professional fees, laboratory and office design
costs, and office fit out costs will be in the region of GBP8m.
Attracting and retaining the best talent is crucial to the
success of our business and over the period we have completed the
hiring of our Executive Leadership Team with the appointments of a
Senior Vice President, Information Technology, and a Senior Vice
President, Global Manufacturing and Supply Chain, and we are
confident that we have the right team in place to drive the
business and take advantage of the growth opportunities that we
see. As our business grows we have continued our investments to
improve the engagement of our people. This has included launching
new communication channels, new learning and development offerings
and better recruitment tools.
As well as growing organically, we continue to explore M&A
opportunities where we think we can add products and solutions for
our customers.
Strategy
We are on track to meet or exceed all of our strategic key
performance indicators (KPIs), with the exception of our
non-primary antibodies revenue growth target. This exception was
due to large volume orders in the previous period that did not
repeat in H1 2017. Despite this, we are confident that we will
achieve the Group's total revenue targets for the full year. We now
expect growth of non-primary antibodies for the full year to be in
the range of 15-20%. This lower than projected growth will be
offset by higher growth in our RabMAb(R) product range, which we
now expect to be in the range of 23-27% for the full year.
FY 2016 H1 2017 FY 2017 FY 2017
Strategic KPIs performance result original target revised target
------------------------------------------------------------ ------------ ------- ---------------- ---------------
Growth in constant currency revenue from RabMAb(R) primary
antibody range 29.5% 26.6% 18-22% 23-27%
Growth in constant currency revenue from non-primary
antibody products 30.3% 15.6% 20-25% 15-20%
Net promoter score (NPS) 26.0% 24.0% 24-30% 24-30%
------------------------------------------------------------ ------------ ------- ---------------- ---------------
Outlook
We have delivered a good overall financial performance in the
first six months of the year and are on track to deliver against
our full year guidance of constant currency revenue growth in the
range of 9-11%. We believe we are well placed to continue to gain
market share from our leadership position in research antibodies,
continue to grow in China, as well as in new territories where we
are exploring opportunities to sell direct to our customers.
We have a strong balance sheet which enables Abcam to capitalise
fully on the further opportunities available to it, including
M&A, and we will continue to invest in R&D, information
technology and our infrastructure to provide innovative, trusted
and improved solutions.
We believe that Abcam is well positioned to continue to deliver
long-term value for all of our stakeholders as we look to drive
growth in our current markets, as well as explore opportunities in
new markets, as we execute our strategy to double the scale of the
Company.
Murray Hennessy
Chairman
Alan Hirzel
Chief Executive Officer
3 March 2017
Responsibility statement
We confirm to the best of our knowledge:
-- the condensed set of financial statements has been prepared
in accordance with IAS 34 Interim Financial Reporting;
-- the Interim Management Report includes 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 six months of the
financial year and their impact on the condensed set of financial
statements and a description of the principal risks and
uncertainties for the remaining six months of the year; and
-- the Interim Management Report includes a fair review of the
information required by DTR 4.2.8R, being related party
transactions that have taken place in the first six months of the
current financial year 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 Group's 2015/16 Annual Report except for the following
changes:
As previously announced, Gavin Wood joined the Company as
CFO-elect on 18 July 2016 and replaced Jeff Iliffe as CFO and
Executive Director on 12 September 2016. Jeff stepped down from the
Board on the same day. Additionally, also as previously announced,
and highlighted on page 27 of the Annual Report, Jim Warwick
retired from Abcam and stepped down from the Board on 31 December
2016. Anthony Martin and Michael Ross did not seek re-election as
Non-Executive Directors at the AGM in November 2016, and left the
Board on 31 October 2016.
By order of the Board
Alan Hirzel
Chief Executive Officer
Gavin Wood
Chief Financial Officer
3 March 2017
Independent review report to Abcam plc
Report on the condensed consolidated interim financial
information
Our conclusion
We have reviewed Abcam plc's condensed consolidated interim
financial information (the "interim financial statements") in the
interim report of Abcam plc for the six month period ended 31
December 2016. 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 reviewed
The interim financial statements comprise:
-- the condensed consolidated balance sheet as at 31 December 2016;
-- the condensed consolidated income statement and condensed
consolidated statement of comprehensive income for the period then
ended;
-- the condensed consolidated cash flow statement for the period then ended;
-- the condensed consolidated statement of changes in equity for the period then ended; and
-- the explanatory notes to the interim financial statements.
The interim financial statements included in the interim report
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 Directors
The 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 involves
We 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
Ireland) 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 LLP
Chartered Accountants
Cambridge
3 March 2017
a) The maintenance and integrity of the Abcam plc website is the
responsibility of the Directors; the work carried out by the
auditor does not involve consideration of these matters and,
accordingly, the auditor accepts no responsibility for any changes
that may have occurred to the interim financial statements since
they were initially presented on the website.
b) Legislation in the United Kingdom governing the preparation
and dissemination of financial statements may differ from
legislation in other jurisdictions
Condensed consolidated income statement
For the six months ended 31 December 2016
(Unaudited) (Unaudited)
six months six months
ended ended
31 Dec 31 Dec
2016 2015
Notes GBP000 GBP000
---------------------------------------------------------------- ------ ------------ ------------
Revenue 102,510 78,625
Cost of sales (31,021) (24,172)
---------------------------------------------------------------- ------ ------------ ------------
Gross profit 71,489 54,453
Administration and management expenses (33,419) (26,671)
Research and development expenses (9,816) (6,740)
---------------------------------------------------------------- ------ ------------ ------------
Operating profit 28,254 21,042
Finance income 5 144 99
Finance costs (3,308) (246)
---------------------------------------------------------------- ------ ------------ ------------
Profit before tax 25,090 20,895
Tax 6 (5,277) (3,986)
---------------------------------------------------------------- ------ ------------ ------------
Profit for the period attributable to the owners of the parent 19,813 16,909
---------------------------------------------------------------- ------ ------------ ------------
Earnings per share
Basic 7 9.80p 8.43p
Diluted 7 9.72p 8.36p
---------------------------------------------------------------- ------ ------------ ------------
Condensed consolidated statement of comprehensive income
For the six months ended 31 December 2016
(Unaudited) (Unaudited)
six months six months
ended ended
31 Dec 31 Dec
2016 2015
GBP000 GBP000
------------------------------------------------------------------------------------------ ------------ ------------
Profit for the period 19,813 16,909
------------------------------------------------------------------------------------------ ------------ ------------
Other comprehensive gains/(losses) that may be reclassified to profit or loss in
subsequent
years
Movements on cash flow hedges 4,186 (3,635)
Movement on net investment hedge (1,028) -
Exchange differences on translation of foreign operations 14,736 6,990
Tax relating to components of other comprehensive income (801) 727
------------------------------------------------------------------------------------------ ------------ ------------
Other comprehensive income for the period 17,093 4,082
------------------------------------------------------------------------------------------ ------------ ------------
Total comprehensive income for the period 36,906 20,991
------------------------------------------------------------------------------------------ ------------ ------------
Condensed consolidated balance sheet
At 31 December 2016
(Unaudited) (Audited) (Unaudited)
as at as at as at
31 Dec 30 Jun 31 Dec
2016 2016 2015
Notes GBP000 GBP000 GBP000
------------------------------------------------------- ------ ------------ ---------- ------------
Non-current assets
Goodwill 8 121,036 112,462 103,592
Intangible assets 8 75,528 70,208 64,608
Property, plant and equipment 8 21,125 17,623 15,035
Deferred tax asset 10,976 9,615 4,123
Derivative financial instruments 11 230 - -
------------------------------------------------------- ------ ------------ ---------- ------------
228,895 209,908 187,358
------------------------------------------------------- ------ ------------ ---------- ------------
Current assets
Inventories 21,070 19,675 18,885
Trade and other receivables 25,633 28,504 19,835
Cash and cash equivalents 76,429 68,919 54,758
Term deposits - 1,748 1,696
Derivative financial instruments 11 408 11 543
Deferred tax asset - - 976
Available-for-sale asset 11 862 797 718
------------------------------------------------------- ------ ------------ ---------- ------------
124,402 119,654 97,411
------------------------------------------------------- ------ ------------ ---------- ------------
Total assets 353,297 329,562 284,769
------------------------------------------------------- ------ ------------ ---------- ------------
Current liabilities
Trade and other payables (21,987) (20,078) (15,909)
Current tax liabilities (3,176) (1,958) (5,147)
Contingent consideration and fees 11 (3,953) (1,990) -
Derivative financial instruments 11 (6,785) (9,267) (1,693)
------------------------------------------------------- ------ ------------ ---------- ------------
(35,901) (33,293) (22,749)
------------------------------------------------------- ------ ------------ ---------- ------------
Net current assets 88,501 86,361 74,662
------------------------------------------------------- ------ ------------ ---------- ------------
Non-current liabilities
Deferred tax liability (26,045) (22,938) (21,674)
Contingent consideration and fees 11 - (10,910) (10,841)
Derivative financial instruments 11 (74) (1,231) (301)
------------------------------------------------------- ------ ------------ ---------- ------------
(26,119) (35,079) (32,816)
------------------------------------------------------- ------ ------------ ---------- ------------
Total liabilities (62,020) (68,372) (55,565)
------------------------------------------------------- ------ ------------ ---------- ------------
Net assets 291,277 261,190 229,204
------------------------------------------------------- ------ ------------ ---------- ------------
Equity
Share capital 9 407 405 405
Share premium account 23,072 21,549 20,678
Merger reserve 66,397 61,560 61,560
Own shares (3,927) (3,231) (3,231)
Translation reserve 37,311 23,857 5,582
Hedging reserve (3,681) (7,066) (1,150)
Retained earnings 171,698 164,116 145,360
------------------------------------------------------- ------ ------------ ---------- ------------
Total equity attributable to the owners of the parent 291,277 261,190 229,204
------------------------------------------------------- ------ ------------ ---------- ------------
Condensed consolidated statement of changes in equity
For the six months ended 31 December 2016
Share
Share premium Merger Own Translation Hedging Retained
capital account reserve shares reserve(1) reserve(2) earnings(3) Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
--------------------- --------- --------- --------- -------- ------------ ------------ ------------- ---------
At 1 July 2016 405 21,549 61,560 (3,231) 23,857 (7,066) 164,116 261,190
--------------------- --------- --------- --------- -------- ------------ ------------ ------------- ---------
Profit for the
period - - - - - - 19,813 19,813
Other comprehensive
income - - - - 13,454 3,385 254 17,093
--------------------- --------- --------- --------- -------- ------------ ------------ ------------- ---------
Total comprehensive
income for the
period - - - - 13,454 3,385 20,067 36,906
--------------------- --------- --------- --------- -------- ------------ ------------ ------------- ---------
Issue of share
capital 2 1,523 4,837 (921) - - - 5,441
Own shares disposed
of on release of
shares - - - 225 - - (225) -
Credit to equity for
share-based
payments - - - - - - 1,056 1,056
Payment of dividends - - - - - - (13,316) (13,316)
--------------------- --------- --------- --------- -------- ------------ ------------ ------------- ---------
Transactions with
owners, recognised
directly in equity 2 1,523 4,837 (696) - - (12,485) (6,819)
--------------------- --------- --------- --------- -------- ------------ ------------ ------------- ---------
At 31 December 2016
(unaudited) 407 23,072 66,397 (3,927) 37,311 (3,681) 171,698 291,277
--------------------- --------- --------- --------- -------- ------------ ------------ ------------- ---------
For the six months ended 31 December 2015
Share
Share premium Merger Own Translation Hedging Retained
capital account reserve shares reserve(1) reserve(2) earnings(3) Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
--------------------- --------- --------- --------- -------- ------------ ------------ ------------- ---------
At 1 July 2015 402 19,522 56,513 (2,812) (1,266) 1,758 139,987 214,104
--------------------- --------- --------- --------- -------- ------------ ------------ ------------- ---------
Profit for the
period - - - - - - 16,909 16,909
Other comprehensive
income - - - - 6,848 (2,908) 142 4,082
--------------------- --------- --------- --------- -------- ------------ ------------ ------------- ---------
Total comprehensive
income for the
period - - - - 6,848 (2,908) 17,051 20,991
--------------------- --------- --------- --------- -------- ------------ ------------ ------------- ---------
Issue of share
capital 3 1,156 5,047 (547) - - - 5,659
Own shares disposed
of on release of
shares - - - 128 - - (128) -
Credit to equity for
share-based
payments - - - - - - 425 425
Payment of dividends - - - - - - (11,975) (11,975)
--------------------- --------- --------- --------- -------- ------------ ------------ ------------- ---------
Transactions with
owners, recognised
directly in equity 3 1,156 5,047 (419) - - (11,678) (5,891)
--------------------- --------- --------- --------- -------- ------------ ------------ ------------- ---------
At 31 December 2015
(unaudited) 405 20,678 61,560 (3,231) 5,582 (1,150) 145,360 229,204
--------------------- --------- --------- --------- -------- ------------ ------------ ------------- ---------
1 Exchange differences on translation of overseas operations and
net investment hedge instrument.
2 Gains and losses recognised on cash flow hedges and related deferred tax.
3 The share-based payment reserve and related tax reserve, which
were previously shown separately, have been combined within
retained earnings for presentational purposes.
Condensed consolidated cash flow statement
For the six months ended 31 December 2016
(Unaudited) (Unaudited)
six months six months
ended ended
31 Dec 31 Dec
2016 2015
Notes GBP000 GBP000
---------------------------------------------------------------------- ------ ------------ ------------
Profit before tax 25,090 20,895
Finance income (144) (99)
Finance costs 3,308 246
---------------------------------------------------------------------- ------ ------------ ------------
Operating profit for the period 28,254 21,042
Adjustments for:
Depreciation of property, plant and equipment 2,374 1,761
Amortisation of intangible assets 4,825 2,780
Financial instruments at fair value through profit or loss (80) (569)
Research and development expenditure credit (255) -
Share-based payments charge 1,404 1,105
Contingent consideration change in fair value (1,004) -
Unrealised currency translation losses/(gains) 335 (220)
---------------------------------------------------------------------- ------ ------------ ------------
Operating cash flows before movements in working capital 35,853 25,899
(Increase)/decrease in inventories (748) 1,151
Decrease in receivables 3,706 746
Increase/(decrease) in payables 1,141 (1,842)
---------------------------------------------------------------------- ------ ------------ ------------
Cash generated by operations 39,952 25,954
Income taxes paid (4,584) (5,225)
Net cash inflow from operating activities 35,368 20,729
---------------------------------------------------------------------- ------ ------------ ------------
Investing activities
Investment income 139 97
Purchase of property, plant and equipment (5,341) (3,974)
Purchase of intangible assets (5,246) (2,972)
Acquisition of subsidiary, net of cash and cash equivalents acquired 11 (7,350) (6,258)
Decrease in term deposits 1,827 -
---------------------------------------------------------------------- ------ ------------ ------------
Net cash outflow from investing activities (15,971) (13,107)
---------------------------------------------------------------------- ------ ------------ ------------
Financing activities
Dividends paid 10 (13,316) (11,975)
Proceeds on issue of shares 602 1,158
Purchase of own shares - (228)
---------------------------------------------------------------------- ------ ------------ ------------
Net cash outflow from financing activities (12,714) (11,045)
---------------------------------------------------------------------- ------ ------------ ------------
Net increase/(decrease) in cash and cash equivalents 6,683 (3,423)
Cash and cash equivalents at beginning of period 68,919 57,059
Effect of foreign exchange rates 827 1,122
---------------------------------------------------------------------- ------ ------------ ------------
Cash and cash equivalents at end of period 76,429 54,758
---------------------------------------------------------------------- ------ ------------ ------------
Notes to the interim financial information
For the six months ended 31 December 2016
1. General information
This condensed consolidated interim financial information does
not comprise statutory accounts within the meaning of section 434
of the Companies Act 2006. Statutory accounts for the year ended 30
June 2016 were approved by the Board of Directors on 9 September
2016 and have been delivered to the Registrar of Companies. The
audit report on those accounts 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.
This consolidated interim financial information has been
reviewed, not audited.
2. Basis of preparation
The annual financial statements of Abcam plc (the 'Group') are
prepared in accordance with International Financial Reporting
Standards (IFRS) and IFRS Interpretations Committee (IFRS IC)
interpretations as adopted by the European Union and the Companies
Act 2006 applicable to companies reporting under IFRS. The
condensed set of financial statements included in this interim
financial report has been prepared in accordance with IAS 34
Interim Financial Reporting as adopted by the European Union.
a. Accounting policies
The accounting policies, estimates and judgements adopted in the
preparation of the condensed consolidated interim financial
information are consistent with those followed in the preparation
of the Group's financial statements for the year ended 30 June
2016, except for the following estimations:
Provision for bad or doubtful debts
A review of historic debtor default undertaken during the period
showed a low trend of actual write-offs, thereby resulting in a
revision of the expected collectability of the Group's debtor
portfolio. Consequently, GBP700k of the provision has been released
to the income statement in the period.
Presentation of goods-in processing costs
Goods-in processing costs relate to costs incurred in receiving,
resizing, and storing bought-in product. These costs have
previously been shown as operating expenses but, as the costs are
only incurred in relation to selling product, management has
concluded that it is more appropriate to include the costs in gross
margin as a cost of sales to give a more accurate representation of
the true cost of product sales. This has led to GBP970k being
reclassified from operating expenses to cost of sales, a reduction
in gross margin of 1.0%. The comparative costs for the period to 31
December 2015 were GBP846k, representing a gross margin reduction
of 1.1%. The prior period income statement has not been restated on
the grounds of immateriality.
Tax
Taxes on income in the interim periods are accrued using the tax
rate that would be applicable to the expected total annual
profit.
New accounting standards and interpretations
There are no new standards and interpretations adopted by the EU
in the period which would have a material financial impact on, or
disclosure requirement for, the Group's interim report.
The following standards and interpretations were in issue but
are not yet effective, and therefore have not been applied in this
interim report:
IFRS 9 - Financial Instruments (effective for reporting periods
commencing on or after 1 January 2018).
IFRS 15 - Revenue (effective for reporting periods commencing on
or after 1 January 2018).
IFRS 16 - Leases (effective for reporting periods commencing on
or after 1 January 2019).
The Directors are still assessing the impact of the adoption of
these Standards.
b. Going concern
The Group's forecasts and projections, taking account of
reasonably possible changes in trading performance, support the
conclusion that there is a reasonable expectation that the Company
and the Group have adequate resources to continue in operational
existence for 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.
3. Risks and uncertainties
Like every business, the Group faces risks in the undertaking of
its day-to-day operations and in pursuit of its longer-term
objectives. An outline of the key risks and uncertainties faced by
the Group was described on pages 15 to 19 of the 2016 Annual Report
and Accounts. Information on financial risk management was also
given on pages 86 to 90 of the Annual Report, a copy of which is
available on the Company's website, www.abcamplc.com. 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, these remain as:
Risk area Key risks
--------------------------- -----------------------------------------------------------------------------------------
Strategic Increased competition, rapidly evolving technological development and consumer needs,
securing
value-add acquisition, and investment opportunities
Commercial Inadequate integration or leverage of acquired businesses, reputational risk and
availability
of research funding
Legal/regulatory/financial Non-compliance with regulation or sudden changes to import/export regulations and
significant
exchange rate movements
Operational Business growth is constrained by not having appropriate people, resources and
infrastructure,
cyber security risks including loss of data and website inaccessibility; and loss of
output
from manufacturing or logistics facilities
--------------------------- -----------------------------------------------------------------------------------------
4. Operating segments
The Group has only one reportable segment, which is 'sales of
antibodies and related products'. There has been no change in the
basis of segmentation or the basis of measurement of segment profit
or loss since the last annual financial statements. The Group's
revenue and assets for its one reportable segment can be determined
by reference to the Group's income statement and balance sheet.
The Group has no individual product or customer which comprises
more than 10% of its revenues. Sales of antibodies and related
products are traditionally more heavily weighted towards the second
half of the year.
5. Finance income and costs
(Unaudited) (Unaudited)
six months six months
ended ended
31 Dec 31 Dec
2016 2015
GBP000 GBP000
------------------------------------------------------------ ----------- -----------
Unwinding of discount on contingent consideration (note 11) (3,308) (246)
Finance costs (3,308) (246)
Interest income on cash and term deposits 144 99
Finance income 144 99
------------------------------------------------------------ ----------- -----------
Net finance costs (3,164) (147)
------------------------------------------------------------ ----------- -----------
6. Income tax
The major components of the income tax expense in the income
statement are as follows:
(Unaudited) (Unaudited)
six months six months
ended ended
31 Dec 31 Dec
2016 2015
GBP000 GBP000
-------------- ------------ ------------
Current tax 5,880 4,171
Deferred tax (603) (185)
-------------- ------------ ------------
5,277 3,986
-------------- ------------ ------------
Corporation tax for the six-month period is reported at 21.0%
(six months ended 31 December 2015: 19.1%; year ended 30 June 2016:
17.6%). After removing one-off items, tax is charged at 19.7% on
reported profits, representing management's best estimate of the
average annual effective tax rate expected for the full year,
applied to the pre-tax income of the six-month period.
Tax rates quoted above are the Group's reported tax rates. The
adjusted tax rate is 18.4% (six months ended 31 December 2015:
19.7%; year ended 30 June 2016: 16%). After removing one-off items,
adjusted tax is charged at 20.75% on adjusted profit before tax,
representing management's best estimate of the average annual
effective tax rate expected for the full year, applied to the
adjusted profit of the six-month period.
7. Earnings per share
The calculation of basic and diluted EPS is based upon the
following data:
(Unaudited) (Unaudited)
six months six months
ended ended
31 Dec 31 Dec
2016 2015
GBP000 GBP000
------------------------------------------------------------------------------------------ ------------ ------------
Earnings
Earnings for the purposes of basic and diluted EPS, being net profit attributable to
equity
holders of the parent 19,813 16,909
------------------------------------------------------------------------------------------ ------------ ------------
Number of shares
Weighted average number of ordinary shares for the purposes of basic EPS 202,199,940 200,653,747
Effect of dilutive potential ordinary shares:
- Share options 1,582,995 1,661,880
------------------------------------------------------------------------------------------ ------------ ------------
Weighted average number of ordinary shares for the purposes of diluted EPS 203,782,935 202,315,627
------------------------------------------------------------------------------------------ ------------ ------------
Basic EPS is calculated by dividing the earnings attributable to
ordinary owners of the parent by the weighted average number of
shares in issue during the year, excluding ordinary shares
purchased or issued by the Company and held by Equiniti Share Plan
Trustees Limited.
Diluted EPS is calculated by adjusting the weighted average
number of ordinary shares outstanding to assume conversion of all
dilutive potential ordinary shares that have been granted to
employees as share options. The number of potentially dilutive
share options is derived from the number of 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.
Adjusted earnings per share
The calculation of adjusted EPS is based on earnings of:
(Unaudited) (Unaudited)
six months six months
ended ended
31 Dec 31 Dec
2016 2015
GBP000 GBP000
---------------------------------------------------------------------------- ------------ ------------
Net profit attributable to equity holders of the parent - profit after tax 19,813 16,909
---------------------------------------------------------------------------- ------------ ------------
Acquisition costs (64) 373
Integration costs (34) 203
System and process improvement costs 1,891 939
Unwinding of discount factor on contingent consideration and fees 3,308 246
Amortisation of acquisition-related intangible assets 2,954 1,617
Contingent consideration fair value adjustment (1,004) -
Tax effect of adjusting items (651) (788)
---------------------------------------------------------------------------- ------------ ------------
Adjusted profit after tax 26,213 19,499
---------------------------------------------------------------------------- ------------ ------------
The adjusted EPS information is provided to allow a clear method
for year-on-year comparison. The denominators used are the same as
those detailed above for both basic and diluted EPS.
(Unaudited) (Unaudited)
six months six months
ended ended
31 Dec 31 Dec
2016 2015
GBP000 GBP000
---------------------- ------------ ------------
Basic EPS 9.80p 8.43p
Diluted EPS 9.72p 8.36p
Adjusted basic EPS 12.96p 9.72p
Adjusted diluted EPS 12.86p 9.64p
---------------------- ------------ ------------
8. Goodwill, intangible assets and property, plant and
equipment
a) Goodwill
The movement in goodwill is foreign exchange retranslation of
goodwill denominated in foreign currencies.
b) Intangible assets
Intangible assets consists of GBP63.4m acquired assets and
GBP12.1m internally generated assets (30 June 2016: GBP61.4m and
GBP8.8m respectively).
GBP5.2m of software costs were capitalised in the period in
relation to the Group's system and process improvement project.
Amortisation totalled GBP4.8m, offset by a GBP4.9m gain in value
from foreign exchange retranslation of assets denominated in
foreign currencies.
c) Property, plant and equipment
The closing net book value was GBP21.1m (30 June 2016:
GBP17.6m). GBP5.3m of additions were recorded in the period which
included GBP1.1m lab equipment and fit out costs, GBP2.1m
capitalised Hybridoma costs, GBP1.6m spent on the Branford and new
head office sites, and other additions of GBP0.5m. Depreciation
charge for the period was GBP2.4m and foreign exchange translation
gains on assets held in foreign currency subsidiaries was
GBP0.6m.
9. Share capital
Share capital as at 31 December 2016 amounted to GBP407,173.
During the period, the Group issued 280,963 shares as a result of
the exercise of share options, 109,516 for the free share element
of the SIP scheme and a further 594,545 in relation to the
settlement of contingent consideration following the successful
completion of certain milestones. This increased the number of
shares in issue from 202,601,452 to 203,586,476.
10. Dividends
(Unaudited) (Unaudited)
six months six months
ended ended
31 Dec 31 Dec
2016 2015
GBP000 GBP000
------------------------------------------------------------------------------------------ ------------ ------------
Amounts recognised as distributions to the owners of the parent in the period:
Final dividend for the year ended 30 June 2016 of 6.556 pence (2015: 5.92 pence) per
share 13,316 11,975
Total distributions to owners of the parent in the period 13,316 11,975
------------------------------------------------------------------------------------------ ------------ ------------
Proposed interim dividend for the year ended 30 June 2017 of 2.825 pence (2016: 2.354
pence)
per share 5,752 4,754
------------------------------------------------------------------------------------------ ------------ ------------
The interim dividend of 2.825 pence per share was approved by
the Board on 3 March 2017 and has not been recognised as a
liability as at 31 December 2016. It will be recognised in equity
attributable to owners of the parent in the year ended 30 June
2017.
11. Financial instruments and risk management
The 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; they should be read in conjunction
with the Group's financial statements as at 30 June 2016. There
have been no changes to the risk management policies since the year
ended 30 June 2016.
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.
Level Level Level Total
1 2 3 GBP000
31 December 2016 GBP000 GBP000 GBP000
-------------------------- --------- -------- -------- ---------
Assets
Derivative financial
instruments - 638 - 638
Available-for-sale
asset - - 862 862
-------------------------- --------- -------- -------- ---------
Total assets - 638 862 1,500
-------------------------- --------- -------- -------- ---------
Liabilities
Derivative financial
instruments - (6,859) - (6,859)
Contingent consideration
and fees - - (3,953) (3,953)
-------------------------- --------- -------- -------- ---------
Total liabilities - (6,859) (3,953) (10,812)
-------------------------- --------- -------- -------- ---------
Level Level Level Total
1 2 3 GBP000
30 June 2016 GBP000 GBP000 GBP000
-------------------------- --------- --------- --------- ---------
Assets
Derivative financial
instruments - 11 - 11
Available-for-sale
asset - - 797 797
-------------------------- --------- --------- --------- ---------
Total assets - 11 797 808
-------------------------- --------- --------- --------- ---------
Liabilities
Derivative financial
instruments - (10,498) - (10,498)
Contingent consideration
and fees - - (12,900) (12,900)
-------------------------- --------- --------- --------- ---------
Total liabilities - (10,498) (12,900) (23,398)
-------------------------- --------- --------- --------- ---------
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 Yuan in excess of payments
in these currencies and has hedging arrangements in place to reduce
its exposure to currency fluctuations.
The following table details the forward exchange contracts
outstanding as at the period end:
US Dollars Euros Japanese Chinese
Yen Yuan
--------------- ------------------
Sell Average Sell Average Sell Average Sell Average
Maturing in $000 rate EUR000 rate Yen000 rate Yen000 rate
--------------- ------- -------- -------- -------- ---------- -------- -------- --------
Period ending
30 June 2017 16,820 1.46 20,688 1.31 972,553 163.02 28,497 8.76
Year ending
30 June 2018 21,053 1.31 26,075 1.19 1,131,799 140.09 - -
--------------- ------- -------- -------- -------- ---------- -------- -------- --------
The Group's Level 3 financial instruments consist of:
-- A US Dollar-denominated equity investment admitted to the
Taiwan Emerging Stock Board (TESB) stated at original cost less any
provision for impairment. There has been no further progress toward
full Taiwanese Stock Exchange listing in the period and therefore
no change in measurement basis. The movement in value in the period
is due to currency translation.
-- Contingent consideration and fees payable recognised as part
of the AxioMx acquisition in November 2015. The fair value is
calculated based on management's best estimate of the likelihood
and timing of achievement of specific patent and research and
development milestones. The movement in the fair value in the
period is shown below:
GBP000
-------------------------------- ---------
At 1 July 2016 12,900
Unwind of discount(1) 3,308
Settlement of consideration(2) (12,279)
Change in fair value(3) (1,004)
Exchange differences 1,028
-------------------------------- ---------
At 31 December 2016 3,953
-------------------------------- ---------
1 Includes GBP2.7m accelerated unwind due to early achievement
and settlement of certain milestones and change in estimated timing
of the remaining milestones.
2 Consists of GBP7.4m cash settlement and GBP4.9m equity settlement.
3 Negotiation to settle certain milestones early for commercial
purposes was concluded in the period and the related obligation for
those milestones settled in full at GBP2.4m less than the original
liability estimate. Management has also reassessed the probability
of achievement of the remaining milestones and increased the fair
value of the liability by GBP1.4m. These fair value changes have
been recorded within administration and management expenses.
12. Related party transactions
Directors' transactions
During the six-month period the Group made total sales of
GBP17,586 to companies of which Jonathan Milner is the chairman or
significant investor.
The Group also made a net payment of GBP137,994 to Horizon
Discovery Group Plc, of which Jonathan Milner is a non-executive
director. This payment comprised GBP110,000 for access to knockout
cell lines, GBP32,180 for royalty payments and a receipt of
GBP4,186 for sales of antibodies.
In addition, the Group sold antibodies to 3Scan for GBP914, a
company of which Mara Aspinall is a non-fiduciary advisor.
13. Consolidated adjusted financial measures
Adjusted financial measures are used by management in its review
of the business and exclude certain cash and non-cash items which
management believes are not reflective of the normal course of
business of the Group. Management believe that disclosing such
non-IFRS measures enables a reader to isolate and evaluate the
impact of such items on results and allows for fuller understanding
of performance from year to year.
The calculation of the Group's key adjusted measures are
presented below:
(Unaudited) (Unaudited)
six months six months
ended ended
31 Dec 31 Dec
2016 2015
GBP000 GBP000
------------------------------------------------------------------- ------------ ------------
Profit before tax 25,090 20,895
Unwinding of discount factor on contingent consideration and fees 3,308 246
Contingent consideration - change in fair value (1,004) -
Amortisation of acquisition-related intangible assets 2,954 1,617
System and process improvement costs 1,891 939
Acquisition costs (64) 373
Integration costs (34) 203
------------------------------------------------------------------- ------------ ------------
Adjusted profit before tax 32,141 24,273
------------------------------------------------------------------- ------------ ------------
Adjusted profit before tax margin(1) 31.4% 30.8%
------------------------------------------------------------------- ------------ ------------
1 Adjusted profit before tax margin is adjusted profit before
tax divided by revenue.
(Unaudited) (Unaudited)
six months six months
ended ended
31 Dec 31 Dec
2016 2015
GBP000 GBP000
------------------------------------------------------- ------------ ------------
Operating profit 28,254 21,042
Contingent consideration - change in fair value (1,004) -
Amortisation of acquisition-related intangible assets 2,954 1,617
System and process improvement costs 1,891 939
Acquisition costs (64) 373
Integration costs (34) 203
Adjusted operating profit 31,997 24,174
------------------------------------------------------- ------------ ------------
Operating margin(1) 27.6% 26.8%
Adjusted operating margin(1) 31.2% 30.7%
------------------------------------------------------- ------------ ------------
1 Operating margin is operating profit divided by revenue and
adjusted operating margin is adjusted operating profit divided by
revenue.
(Unaudited) (Unaudited)
six months six months
ended ended
31 Dec 31 Dec
2016 2015
GBP000 GBP000
------------------------------------------------- ------------ ------------
Operating profit 28,254 21,042
Depreciation and amortisation 7,199 4,541
------------------------------------------------- ------------ ------------
EBITDA(1) 35,453 25,583
Contingent consideration - change in fair value (1,004) -
System and process improvement costs 1,582 939
Acquisition costs (64) 373
Integration costs (34) 203
Adjusted EBITDA 35,933 27,098
------------------------------------------------- ------------ ------------
Adjusted EBITDA margin(2) 35.1% 34.5%
------------------------------------------------- ------------ ------------
1 EBITDA is earnings before interest, tax, depreciation and amortisation.
2 Adjusted EBITDA margin is adjusted EBITDA divided by revenue.
14. Post balance sheet events
Subsequent to the period end, the remaining two milestones in
relation to the AxioMx Inc acquisition contingent consideration
were successfully achieved. A total of $5m will be settled before
the year end (60% cash, 40% equity) which will crystallise and
fulfil the remaining contingent consideration obligation under the
acquisition agreement.
In addition, the lease for a new head office building on the
Cambridge Biomedical Campus was agreed to in February 2017
following the grant of planning permission. The 20-year formal
lease agreement will start during the year commencing 1 July 2018.
The signing of the pre-lease has committed the Company to
contributing approximately GBP16m over the next two years to the
build costs.
15. Date of approval of interim financial statements
The interim financial statements cover the period 1 July 2016 to
31 December 2016 and were approved by the Board on 3 March
2017.
Further copies of the interim financial statements are available
from the Company's registered office, 330 Cambridge Science Park,
Milton Road, Cambridge CB4 0FL, and can be accessed on the Abcam
plc investor relations website, www.abcamplc.com.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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