15% Reported Revenue Growth & 8% Constant Exchange
Rate Revenue Growth: Demand for Abcam In-house Products
Continues
CAMBRIDGE, England and WALTHAM, Mass. , March 20,
2023 /PRNewswire/ -- Abcam plc (Nasdaq: ABCM)
('Abcam', the 'Group' or the 'Company'), a global leader in the
supply of life science research tools, today announces its results
for the year ended 31 December 2022
(the 'period').
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SUMMARY
PERFORMANCE
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Year-End 31 December
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2022
£m
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2021
£m
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Revenue
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361.7
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315.4
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Gross profit margin,
%
Adjusted gross
profit margin, %
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74.8%
75.5%
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71.2%
72.2%
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Operating profit
margin, %
Adjusted operating
profit margin, %
Diluted (loss) /
earnings per share ('EPS') (£)
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(2.8%)
21.1%
(0.037)
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2.3%
19.2%
0.019
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Adjusted diluted
earnings per share ('EPS') (£)
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0.249
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0.206
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Return on Capital
Employed ('ROCE'), %
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8.9 %
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7.6 %
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FULL YEAR FINANCIAL HIGHLIGHTS[1]
- Reported revenue growth of 15%; constant exchange rate ('CER')
revenue growth of 8%
- In-house revenues, including BioVision and Custom, Products &
Licensing, recorded 26% reported revenue growth and 18% CER
revenue growth
- Reported gross profit margin of 74.8%: Adjusted gross profit
margin of 75.5%, an increase of 330 basis points from 72.2%, driven
by the contribution of in-house revenues, including BioVision and
Custom, Products & Licensing
- Operating loss of £10.1 million impacted by £18.3 million
impairment charge on asset held for sale; adjusted operating profit
increased 26% to £76.3m, resulting in a 190 basis points increase
of adjusted operating profit margin to 21.1%
- Diluted loss per share of (£0.037) impacted by impairment
charge on asset held for sale; adjusted diluted earnings per share
increased 21% to £0.249
- Return on capital employed increased to 8.9%, a 130-basis point
improvement, favourably impacted by efficient capital utilization
and higher adjusted operating profits
[1] These 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 reconciled
to the most directly comparable measure prepared in accordance with
IFRS in note 3 to the financial statements.
BUSINESS HIGHLIGHTS
- In-house revenues, including BioVision and Custom, Products
& Licensing, represent 67% of total sales, an increase of 600
basis points
- Academic & Biopharmaceutical customers experienced
double-digit percent reported revenue growth, Academic grew
mid-single digits and Biopharmaceutical grew double-digit percent
on a CER basis
- 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 a total of more than 2,100
- To support future growth, we've implemented an Oracle Cloud ERP
system, and expanded sites in Waltham, Singapore, and Amsterdam
- Expanded Life Science Industry experience within the Board of
Directors with the appointment of Luba
Greenwood, as Non-Executive Director
- Cancellation of admission to trading on AIM completed and sole
Nasdaq listing as of 14 December
2022
FY23 OUTLOOK
The Company anticipates reported revenues of approximately £420
million to £440 million, representing 15% to 20% constant exchange
rate revenue growth, combined with lower operating expense growth,
resulting in adjusted operating profit margin expansion.
FY2024 GOAL
The Company is reiterating its 2024 revenue goals of £450m-£525m
with adjusted operating profit margins of greater than
30%.
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. In the last
ten years, our business has grown revenue at double digit rates
because of the trust the market has in our team, our innovation,
and our brand. As we look ahead, we can be confident that we
have and continue to build a sustainable and profitable growth
company. I am grateful to everyone at Abcam for their ongoing
efforts through this exciting period. I also thank our customers
and partners bringing Abcam into their labs and giving us all the
opportunity to demonstrate our company's role in making progress
happen together."
Analyst and investor meeting and webcast:
Abcam will host a conference call and webcast for analysts and
investors today at 12:00 GMT/
08:00 EDT. For details, and to
register, please visit
corporate.abcam.com/investors/reports-presentations
A recording of the webcast will be made available on Abcam's
website, corporate.abcam.com/investors
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
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+ 44 (0) 1223 696
000
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Alan Hirzel, Chief
Executive Officer
Michael Baldock, Chief
Financial Officer
Tommy Thomas, Vice
President, Investor Relations
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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
antibodies, assays, and other research tools 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.
Abcam's worldwide customer base of approximately one million
life science researchers' uses Abcam's antibodies, reagents,
biomarkers, and assays. By actively listening to and collaborating
with these researchers, the Company continuously advances its
portfolio to address their needs. A transparent program of customer
reviews and datasheets, combined with industry-leading validation
initiatives, gives researchers increased confidence in their
results.
Founded in 1998 and headquartered in Cambridge, UK, the Company
has served customers in more than 130 countries. Abcam's American
Depositary Shares (ADSs) trade on the Nasdaq Global Select Market
(Nasdaq: ABCM).
For more information, please
visit www.abcam.com or www.abcamplc.com
Forward-Looking Statements
This announcement contains forward-looking statements
within the meaning of the Private Securities Litigation Reform Act
of 1995. In some cases, you can identify forward-looking statements
by the following words: "may," "might," "will," "could," "would,"
"should," "expect," "plan," "anticipate," "intend," "seek,"
"believe," "estimate," "predict," "potential," "continue,"
"contemplate," "possible" or the negative of these terms or other
comparable terminology, although not all forward-looking statements
contain these words. They are not historical facts, nor are they
guarantees of future performance. 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
regarding Abcam's portfolio and ambitions, and our future
results of operations and financial position such as our outlook
for FY2023 and performance goals for FY2024 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:
challenges in implementing our strategies for revenue growth
in light of competitive challenges; the development of new products
or the enhancement of existing products, and the need to adapt to
significant technological changes or respond to the introduction of
new products by competitors to remain competitive; our customers
discontinuing or spending less on research, development, production
or other scientific endeavors; 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; the ongoing COVID 19 pandemic, including variants,
continues to affect our business, including impacts on our
operations and supply chains; 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; our products failing to satisfy applicable quality
criteria, specifications and performance standards; failing to
maintain and enhance our brand and reputation; ability to react to
unfavorable geopolitical or economic changes that affect life
science funding; failing to deliver on transformational growth
projects; our dependence upon management and highly skilled
employees and our ability to attract and retain these highly
skilled employees; and as a foreign private issuer, we are exempt
from a number of rules under the U.S. securities laws and Nasdaq
corporate governance rules and are permitted to file less
information with the SEC than U.S. companies, which may limit the
information available to holders of our American Depositary Shares
("ADS"); and the other important factors discussed under the
caption "Risk Factors" in Abcam's Annual Report on Form
20-F for the year ended December 31,
2022 ("Annual Report") with the U.S. Securities
and Exchange Commission ("SEC") on March 20,
2023, which is available on the SEC website at www.sec.gov,
as such factors may be updated from time to time
in Abcam's subsequent 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.
Use of Non-IFRS Financial Measures
To supplement our audited financial results prepared in
accordance with International Financial Reporting Standards
("IFRS") we present Adjusted Operating Profit, Adjusted Operating
Profit Margin, Return on Capital Employed ("ROCE"), Adjusted
Diluted Earnings per Share, Total Constant Exchange Rate Revenue
("CER revenue"), Adjusted Selling, General and Administrative
expenses, Adjusted Research & Development expenses, and Free
Cash Flow, which are financial measures not prepared in accordance
with IFRS ("non-IFRS financial measures"). We believe that the
presentation of these non-IFRS financial measures provide useful
information about our operating results and enhances the overall
understanding of our past financial performance and future
prospects, allowing for greater transparency with respect to key
measures used by management in its financial and operational
decision making. These non-IFRS financial measures are
supplemental in nature as they include and/or exclude certain items
not included and/or excluded in the most directly comparable IFRS
financial measures and should not be considered in isolation, or as
a substitute for, financial measures prepared in accordance with
IFRS. Further, other companies may calculate these non-IFRS
financial measures differently than we do, which may limit the
usefulness of those measures for comparative purposes.
Management believes that the presentation of (a) Adjusted
Operating Profit, Adjusted Operating Profit Margin, ROCE, and
Adjusted Diluted Earnings per Share, provide useful information to
investors and others as management regularly reviews these measures
as important indicators of our operating performance and makes
decisions based on them, (b) CER revenue provides useful
information to investors and others as management regularly reviews
this measure to identify period-on-period or year-on-year
performance of the business and makes decisions based on it, and
(c) Adjusted Selling, General and Administrative expenses and
Adjusted Research & Development expenses provide useful
information to investors and others as management regularly reviews
these measures to identify period-on-period or year-on-year
performance of the business and makes decisions based on it, and
(d) Free Cash Flow provides useful information to investors and
others because management regularly reviews this measure as an
important indicator of how much cash is generated by business
operations, excluding capital related items, and provides an
indication of the amount of cash available for discretionary
investing or financing after removing capital related items, and
makes decisions based on it. Please see "Non-IFRS Financial
Measures" for a reconciliation of non-IFRS financial measures to
their most directly comparable IFRS financial measures.
We define:
- Adjusted Operating Profit as profit for the period / year
before taking account of finance income, finance costs, tax,
exceptional items, share-based payments, and amortization of
acquisition intangibles. Exceptional items consist of certain cash
and non-cash items that we believe are not reflective of the normal
course of our business; and we identify and determine items to be
exceptional based on their nature and incidence or by or by their
significance ("exceptional items"). As a result, the composition of
exceptional items may vary from period to period / year to
year.
- Adjusted Operating Profit Margin as adjusted operating
profit calculated as a percentage of revenue.
- ROCE as Adjusted Operating Profit divided by capital
employed, defined as total assets less current liabilities.
- Adjusted Diluted Earnings per Share as Adjusted Profit for
the year divided by the weighted average number of ordinary shares
for the purposes of diluted earnings per share. Adjusted Profit for
the year used in this calculation is defined as profit for the year
plus adjusting items (impairment of intangible assets, system and
process improvement costs, acquisition costs, integration and
reorganization costs, net of tax effects). Adjusted Diluted
Earnings per Share is calculated with an adjustment to the weighted
average number of shares outstanding to assume conversion of all
potentially dilutive ordinary shares.
- Adjusted Selling, General and Administrative expenses as
reported selling, general and administrative expenses for the year
before taking account of exceptional items, share-based payments,
and amortization of acquisition intangibles.
- Adjusted Research & Development expenses as reported
research and development expenses for the year before taking
account of exceptional items, share-based payments, and
amortization of acquisition intangibles.
- CER as our total revenue growth from one fiscal period /
year to the next on a constant exchange rate basis.
- Free Cash Flow as net cash inflow 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.
Management is unable to present quantitative reconciliations of
Adjusted Operating Profit, Adjusted Operating Profit Margin, and
CER revenue to their respective most directly comparable IFRS
financial measures of Operating Profit, Operating Profit Margin and
Reported Revenue on a forward-looking basis, because items that
impact these IFRS financial measures are not within our control
and/or cannot be reasonably predicted. Such information may have a
significant, and potentially unpredictable, impact on our future
financial results.
Year-end management report
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 three years 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, continued to increase as customers continued to
focus on their research, enabling greater productivity.
Whilst the global pandemic once again impacted revenues – we
estimate that overall lab activity is now approaching pre-COVID
levels in the Americas and EMEA, our largest geographical markets
representing nearly 70% of total sales.
In the year ended 31 December
2022, demand for our products continued but revenue growth
was interrupted by the implementation of an Oracle Cloud ERP system
and COVID-19 headwinds in China. The combination of these
factors impacted revenues by approximately £30 million on a
reported basis resulting in total revenues increasing 8% CER (15%
reported) to £361.7 million. On a reported basis, we incurred a net
loss of £8.5 million impacted by £18.3 million impairment charge on
an asset held for sale; and diluted EPS declined to -£3.7p. On an
adjusted basis, adjusted operating profit increased 26%, to £76.3
million (2021: £60.4m), and adjusted diluted EPS increased 21% to
24.9p (2021: 20.6p).
Despite the recent disruptions, the opportunities for growth in
our markets remain, and we are committed to our customers and their
long-term success thereby driving our future growth. As we near
completion of our five-year strategic plan, we thank our
approximately 1,800 employees for their ongoing commitment in the
delivery of our plans – they are fundamental to the Group's future
success.
We continue to have a strong balance sheet (net debt of £30.6
million), and we are focused on investments in attractive organic
and inorganic growth opportunities, as they arise.
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
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Year ended 31
December
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Reported
revenues
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Change in
reported
revenues
%
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CER
growth
%
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2022
£m
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2021
£m
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Catalogue revenue –
regional split
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Americas
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147.2
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114.8
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28 %
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16 %
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EMEA
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87.1
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82.3
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6 %
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6 %
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China
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60.3
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57.2
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5 %
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(2 %)
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Japan
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17.4
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18.7
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(7 %)
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0 %
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Rest of Asia
Pacific
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27.8
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23.4
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19 %
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9 %
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Catalogue
revenue
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339.8
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296.4
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15 %
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8 %
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CP&L
revenue1
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21.9
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19.0
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15 %
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5 %
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Total reported
revenue
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361.7
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315.4
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15 %
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8 %
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Total revenue –
product type
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In-house
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243.9
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193.1
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26 %
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18 %
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Third
party
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117.8
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122.3
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(4 %)
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(9 %)
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Total reported
revenue
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361.7
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315.4
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15 %
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8 %
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REVENUE
We recorded revenue of £361.7 million for the year ended 31
December 2022 (2021: £315.4 m). Revenue grew 8% on a CER basis
and reported revenues grew by 15%. During the year, two
factors impacted revenue growth. First, the implementation of the
new Oracle Cloud ERP system disrupted revenues in September and
October. Second, China revenues
were impacted by COVID-19 controls and outbreaks. Based on the
differences between forecasts and actual results, we estimate the
aggregate impact to sales was approximately £30m. We estimate this
headwind negatively impacted revenue growth by approximately 10% on
a reported and 9% on our CER growth rates."
Catalogue revenues: £339.8 million (2021: £296.4m), grew
approximately 8% CER and 15% on a reported basis, including
BioVision.
Catalogue revenue growth by region is as
follows:
- Americas +16% CER / +28% Reported
- Excluding Distributors, Americas sales were driven by high-teens
digit CER in Biopharma, and high-single digit CER in
Academia. Excluding the estimated headwinds on revenues in
2022, Americas grew over 20% CER.
- EMEA +6% CER / +6% Reported
- Excluding Distributors, EMEA sales were driven by high-teens
digit CER in Biopharma, and low-single digit CER growth in
Academia. Excluding the estimated headwinds on revenues in
2022, EMEA grew low teens CER.
- China (-2%) CER / +5%
Reported
- Excluding the estimated headwinds on revenues in 2022,
China grew mid-teens digit
CER.
- Rest of Asia Pacific including
Japan +5% CER / +7% Reported
- Excluding Japan which experienced flat growth (on a CER basis),
rest of Asia-Pacific grew
high-single digit CER
From a served end markets basis, total catalogue sales are as
follows:
- Academia +4% CER / +11% Reported
- Biopharma +10% CER / +18% Reported
- Distributors +12% CER / +18% Reported
Custom, Products & Licenses revenues: £21.9 million (2021:
£19.0m), grew approximately 5% CER and 15% on a reported basis:
GROSS MARGIN
Reported gross profit margin of 74.8%. Adjusted gross margin
increased by 330 basis points, to 75.5%, in the year ended
31 December 2022, reflecting both a
favourable movement in product mix towards high margin in-house
products, and the positive impact of the BioVision acquisition.
OPERATING COSTS
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Year ended 31
December
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Reported
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Adjusted
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2022
£m
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2021
£m
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2022
£m
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2021
£m
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Selling, general &
administrative expenses ('SG&A')
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224.5
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189.7
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176.3
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150.6
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Research &
development expenses ('R&D')
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56.1
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27.8
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20.6
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16.7
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Total operating
costs and expenses
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280.6
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217.5
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196.9
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167.3
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Selling, general and administrative
expenses
Reported selling, general and administrative expenses of £224.5
million. Adjusted selling, general and administrative expenses
increased by £25.7 million, to £176.3 million for
the year ended 31 December 2022 compared to
£150.6 million for the year ended 31 December 2021. The
overall increase was due to an increase in salaries, IT systems and
licenses, higher travel costs off a lower prior period, increased
headcount for in-house teams and the inclusion of BioVision.
Research and development expenses
Reported research and development expenses of £56.1 million.
Adjusted research and development expenses increased by
£3.9 million, to £20.6 million, for the year ended 31
December 2022 compared to £16.7 million for the year
ended 31 December 2021. The overall increase was due to
increases in salary, and related costs in connection with the
BioVision acquisition.
On a reported basis, total reported costs were £280.6 million
(2021 £217.5m) reflect the adjusting items noted
below.
ADJUSTING ITEMS
Total reported expenses include the following adjusting
items:
- £6.6 million relating to the Oracle Cloud ERP project (2021:
£7.0m)
- £15.7 million from acquisition, integration, and reorganisation
charges (2021: £13.0m)
- £16.9 million relating to the amortisation of acquired
intangibles (2021: £9.1m)
- £18.3 million related to impairment charge for asset held for
sale (2021: £nil)
- £26.2 million in charges for share-based payments (2021:
£20.0m)
- £2.7 million relation to the amortization of fair value
adjustments (2021: £3.1m)
NET PROFIT
Adjusted net profit was £57.7 million (2021: £47.2m) driven by
revenue growth, favourable product mix enabling gross margin
expansion offsetting operational and innovation investments in the
business. Reported net loss was £8.5 million (2021: £4.4m Net
Profit).
CASH
As of 31 December 2022, we had cash and cash equivalents of
£89.0 million with drawings of £119.6 million as at the
year ended 31 December 2022 resulting in a net debt position
of £30.6 million. We assess our liquidity, in part, through
an analysis of our working capital together with our other sources
of liquidity. As of 31 December 2022, our working capital
balance, which is comprised of inventories, trade and other
receivables and trade and other payables, was £84.2 million,
an increase of £34.5 million from £49.7 million for the
year ended 31 December 2021. The increase in working
capital during the year ended 31 December
2022, was impacted by: (i) the implementation of the new
Oracle Cloud ERP system that disrupted revenues in the second half
of the year ended 31 December 2022
(predominantly September and October), and (ii) the impact the
COVID-19 pandemic in China, and
the related preventative and precautionary measures, had on our
business. Specifically, the increases in inventory and accounts
receivables were driven by our inability to ship and invoice
product sales and collect cash on a timely basis.
LOOKING AHEAD
We continue to experience good order demand across the business
as market activity has largely resumed in most major geographies.
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 £450 million – £525 million 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 in China arising from COVID-19 remains, yet
research and commercial laboratory activity and demand have
continued to recover and trading performance year to date is in
line with the Board's expectations for January and February 2023.
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 Hirzel
Chief Executive Officer
Michael S Baldock
Chief Financial Officer
20 March 2023
Forward-Looking Statements
This 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 regarding Abcam's portfolio and ambitions, and our
future results of operations and financial position such as our
guidance for FY2023 and performance goals for FY2024 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:
potential changes from unaudited management accounts, which are
provisional and subject to review, to our audited financial
statements; regional or global health pandemic, including the novel
coronavirus ("COVID-19"), which has adversely affected elements of
our business, and 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 or 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 such businesses or assets;
risks that our customers discontinue or spend less on research,
development, production or other scientific endeavors with us;
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; failing to successfully increase access to the U.S.
capital markets, which we anticipated would provide greater
liquidity potential than AIM; any significant interruptions in our
operations; risks that 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 risks that we are
unable to attract and retain these highly skilled employees; and
the other important factors discussed under the caption "Risk
Factors" in Abcam's Annual Report on Form 20-F filed with
the U.S. Securities and Exchange Commission ("SEC") on 20 March 2023, which is available on the SEC
website at www.sec.gov, as such factors may be updated from time to
time in Abcam's subsequent 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.
Consolidated income
statement
|
For the year ended 31
December 2022
|
|
|
|
Year ended 31 December 2022
|
Year ended 31
December 2021
|
|
Note
|
Adjusted
£m
|
Adjusting
items
£m
|
Total
£m
|
Adjusted
£m
|
Adjusting
items
£m
|
Total
£m
|
Revenue
|
2
|
361.7
|
—
|
361.7
|
315.4
|
—
|
315.4
|
Cost of
sales
|
|
(88.5)
|
(2.7)
|
(91.2)
|
(87.7)
|
(3.1)
|
(90.8)
|
Gross profit
|
|
273.2
|
(2.7)
|
270.5
|
227.7
|
(3.1)
|
224.6
|
Selling, general and
administrative expenses
|
|
(176.3)
|
(48.2)
|
(224.5)
|
(150.6)
|
(39.1)
|
(189.7)
|
Research and
development expenses
|
|
(20.6)
|
(35.5)
|
(56.1)
|
(16.7)
|
(11.1)
|
(27.8)
|
Operating profit / (loss)
|
|
76.3
|
(86.4)
|
(10.1)
|
60.4
|
(53.3)
|
7.1
|
Finance
income
|
|
0.4
|
—
|
0.4
|
0.3
|
—
|
0.3
|
Finance
costs
|
|
(5.9)
|
—
|
(5.9)
|
(2.7)
|
—
|
(2.7)
|
Profit / (loss) before tax
|
|
70.8
|
(86.4)
|
(15.6)
|
58.0
|
(53.3)
|
4.7
|
Tax
|
5
|
(13.1)
|
20.2
|
7.1
|
(10.8)
|
10.5
|
(0.3)
|
Profit / (loss) for the period / year
attributable
to equity shareholders of the parent
|
|
57.7
|
(66.2)
|
(8.5)
|
47.2
|
(42.8)
|
4.4
|
|
|
|
|
|
|
|
|
Earnings per share
|
|
|
|
|
|
|
|
Basic
|
6
|
25.2p
|
|
(3.7)p
|
20.8p
|
|
1.9p
|
Diluted
|
6
|
24.9p
|
|
(3.7)p
|
20.6p
|
|
1.9p
|
|
|
|
|
|
|
|
|
|
Adjusted figures exclude impairment of intangible assets and
assets held for sale, systems and process improvement costs,
acquisition costs, amortisation of fair value adjustments,
integration and reorganisation costs, amortisation of acquisition
intangibles, share-based payment charges and the tax effect of
adjusting items. Such excluded items are described as 'adjusting
items'. Further information on these items is shown in note
3.
Consolidated statement
of comprehensive income
|
For the year ended 31 December
2022
|
|
|
Year ended
31 December
2022
£m
|
Year ended
31 December
2021
£m
|
(Loss) / profit for the
year attributable to equity shareholders of the parent
|
(8.5)
|
4.4
|
|
|
|
Items that may be reclassified to the income
statement in subsequent years
|
|
|
Movement on cash flow
hedges
|
(0.4)
|
(0.1)
|
Exchange differences on
translation of foreign operations
|
58.6
|
5.7
|
Tax relating to
components of other comprehensive income / (expense)
|
(1.3)
|
0.1
|
Items that will not
be reclassified to the income statement in subsequent
years
|
|
|
Movement in fair value
of investments
|
(0.4)
|
(0.1)
|
Tax relating to
components of other comprehensive expense
|
—
|
0.4
|
Other comprehensive income for the
year
|
56.5
|
6.0
|
|
|
|
Total comprehensive income for the
year
|
48.0
|
10.4
|
Consolidated balance
sheet
|
As at 31 December
2022
|
|
|
|
|
As
at
31
December
2022
£m
|
As at
31 December
2021*
£m
|
Non-current assets
|
|
|
|
|
Goodwill
|
|
|
398.3
|
363.5
|
Intangible
assets
|
|
|
227.9
|
234.2
|
Property, plant and
equipment
|
|
|
80.5
|
73.5
|
Right-of-use
assets
|
|
|
79.2
|
88.2
|
Investments
|
|
|
3.2
|
3.5
|
Deferred tax
asset
|
|
|
12.1
|
13.2
|
|
|
|
801.2
|
776.1
|
Current assets
|
|
|
|
|
Inventories
|
|
|
68.0
|
58.2
|
Trade and other
receivables
|
|
|
84.0
|
60.5
|
Current tax
receivable
|
|
|
13.9
|
10.5
|
Derivative financial
instruments
|
|
|
0.5
|
0.5
|
Cash and cash
equivalents
|
|
|
89.0
|
95.1
|
|
|
|
255.4
|
224.8
|
Total assets
|
|
|
1,056.6
|
1,000.9
|
Current liabilities
|
|
|
|
|
Trade and other
payables
|
|
|
(67.8)
|
(69.0)
|
Derivative financial
instruments
|
|
|
(0.8)
|
(0.2)
|
Lease
liabilities
|
|
|
(8.5)
|
(9.2)
|
Borrowings
|
|
|
(119.6)
|
(119.2)
|
Current tax
liabilities
|
|
|
(5.1)
|
(4.4)
|
|
|
|
(201.8)
|
(202.0)
|
Net current assets
|
|
|
53.6
|
22.8
|
Non-current liabilities
|
|
|
|
|
Deferred tax
liability
|
|
|
(32.1)
|
(41.5)
|
Lease
liabilities
|
|
|
(95.8)
|
(101.3)
|
|
|
|
(127.9)
|
(142.8)
|
Total liabilities
|
|
|
(329.7)
|
(344.8)
|
Net assets
|
|
|
726.9
|
656.1
|
|
|
|
|
|
Equity
|
|
|
|
|
Share
capital
|
|
|
0.5
|
0.5
|
Share premium
account
|
|
|
269.4
|
268.3
|
Merger
reserve
|
|
|
68.6
|
68.6
|
Own shares
|
|
|
(1.9)
|
(2.2)
|
Translation
reserve
|
|
|
89.7
|
31.1
|
Hedging
reserve
|
|
|
(0.1)
|
0.2
|
Retained
earnings
|
|
|
300.7
|
289.6
|
Total equity attributable to the equity shareholders
of the parent
|
|
|
726.9
|
656.1
|
* See note 8 for details related to the measurement period
adjustment to the accounting for the acquisition of BioVision.
Approved by the Board of directors and authorised for issue on
20 March 2023.
Consolidated statement
of changes in equity
|
For the year ended 31 December
2022
|
|
|
Share
capital
£m
|
Share
premium
account
£m
|
Merger
reserve
£m
|
Own
shares
£m
|
Translation
reserve
£m
|
Hedging
reserve
£m
|
Retained
earnings
£m
|
Total
£m
|
Balance as 1 January 2021
|
0.5
|
265.1
|
68.6
|
(2.4)
|
25.4
|
0.2
|
271.7
|
629.1
|
Profit for the
year
|
—
|
—
|
—
|
—
|
—
|
—
|
4.4
|
4.4
|
Other comprehensive
income
|
—
|
—
|
—
|
—
|
5.7
|
—
|
0.3
|
6.0
|
Total comprehensive income
|
—
|
—
|
—
|
—
|
5.7
|
—
|
4.7
|
10.4
|
Issue of ordinary
shares
|
—
|
3.2
|
—
|
—
|
—
|
—
|
—
|
3.2
|
Own shares disposed of
on exercise of share options
|
—
|
—
|
—
|
0.2
|
—
|
—
|
(0.2)
|
—
|
Share-based payments
inclusive of deferred tax
|
—
|
—
|
—
|
—
|
—
|
—
|
13.4
|
13.4
|
Balance as at 31 December 2021
|
0.5
|
268.3
|
68.6
|
(2.2)
|
31.1
|
0.2
|
289.6
|
656.1
|
Loss for the
year
|
—
|
—
|
—
|
—
|
—
|
—
|
(8.5)
|
(8.5)
|
Other comprehensive
income / (expense)
|
—
|
—
|
—
|
—
|
58.6
|
(0.3)
|
(1.8)
|
56.5
|
Total comprehensive income /
(expense)
|
—
|
—
|
—
|
—
|
58.6
|
(0.3)
|
(10.3)
|
48.0
|
Issue of ordinary
shares
|
—
|
1.1
|
—
|
—
|
—
|
—
|
—
|
1.1
|
Own shares disposed of
on exercise of share options
|
—
|
—
|
—
|
0.3
|
—
|
—
|
(0.3)
|
—
|
Share-based payments
inclusive of deferred tax
|
—
|
—
|
—
|
—
|
—
|
—
|
21.9
|
21.9
|
Purchase of own
shares
|
—
|
—
|
—
|
—
|
—
|
—
|
(0.2)
|
(0.2)
|
Balance as at 31 December 2022
|
0.5
|
269.4
|
68.6
|
(1.9)
|
89.7
|
(0.1)
|
300.7
|
726.9
|
|
|
|
|
|
|
|
|
|
|
Consolidated cash flow
statement
|
For the year ended 31 December
2022
|
|
|
|
Note
|
Year ended
31 December
2022
£m
|
Year ended
31 December
2021
£m
|
Cash generated from operations
|
|
7
|
36.0
|
72.2
|
Net income taxes
paid
|
|
|
(7.3)
|
(9.3)
|
Net cash inflow from operating
activities
|
(i)
|
|
28.7
|
62.9
|
Investing activities
|
|
|
|
|
Investment
income
|
|
|
0.4
|
0.3
|
Purchase of property,
plant and equipment
|
(i)
|
|
(16.8)
|
(34.5)
|
Purchase of intangible
assets
|
(i)
|
|
(24.5)
|
(25.3)
|
Transfer of cash from
escrow in respect of future capital expenditure
|
(i)
|
|
0.3
|
—
|
Purchase of
investments
|
|
|
—
|
(0.1)
|
Reimbursement of
leasehold improvement costs
|
(i)
|
|
—
|
13.2
|
Net cash inflow /
(outflow) arising from acquisitions
|
|
8
|
16.2
|
(245.1)
|
Net cash outflow from investing
activities
|
|
|
(24.4)
|
(291.5)
|
Financing activities
|
|
|
|
|
Principal element of
lease obligations
|
(i)
|
|
(11.3)
|
(8.8)
|
Interest element of
lease obligations
|
(i)
|
|
(2.1)
|
(1.5)
|
Interest
paid
|
|
|
(3.0)
|
(0.7)
|
Proceeds on issue of
shares, net of issue costs
|
|
|
1.1
|
3.2
|
Facility arrangement
fees
|
|
|
—
|
(0.8)
|
Utilisation of
revolving credit facility
|
|
|
—
|
120.0
|
Purchase of own
shares
|
|
|
(0.2)
|
—
|
Net cash (outflow) / inflow from financing
activities
|
|
|
(15.5)
|
111.4
|
|
|
|
|
|
Net decrease in cash and cash
equivalents
|
|
|
(11.2)
|
(117.2)
|
|
|
|
|
|
Cash and cash
equivalents at beginning of year
|
|
|
95.1
|
211.9
|
Effect of foreign
exchange rates
|
|
|
5.1
|
0.4
|
Cash and cash equivalents at end of
year
|
|
|
89.0
|
95.1
|
|
|
|
|
|
Free cash flow
|
(i)
|
|
(25.7)
|
6.0
|
(i) Free cash flow 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 consolidated financial statements
For the year ended 31 December
2022
1. Presentation of the financial statements
a) Basis of preparation
The financial information, which comprises the consolidated
income statement, consolidated statement of comprehensive income,
consolidated balance sheet, consolidated statement of changes in
equity, consolidated cash flow statement and extracts from the
notes to the financial statements for the year ended 31 December 2022 has been prepared in accordance
with International Accounting Standards, in conformity with the
Companies Act 2006. The financial statements incorporate the
results of the Company and the entities under its control (together
the 'Group').
The preliminary financial information has been presented in
Sterling and on the historical cost basis, except for the
revaluation of certain financial instruments.
The financial information does not constitute statutory accounts
within the meaning of Sections 434 to 436 of the Companies Act
2006, but are derived from those accounts. Statutory accounts
for 18 month period ended 31 December
2021 have been filed with the Registrar of Companies and
those for the financial year ended 31
December 2022 were approved by the Board of Directors on
20 March 2023 and will be delivered
in due course. The auditor has reported on those accounts, their
report was unqualified and did not contain statements under Section
498 (2) or (3) of the Companies Act 2006.
b) Adjusted performance measures
Adjusted 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 year to year. 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 3.
c) Going concern
The Group meets its day-to-day working capital requirements from
the cash surpluses generated as a result of normal trading. In
considering going concern, the Directors have reviewed the Group's
forecasts and projections, taking account of reasonably possible
changes in trading performance. These show that the Group should be
able to operate within the limits of its available resources.
On 7 March 2023, the Group replaced its existing RCF which
was due to expire on January 31 2024.
The new RCF has a term of 4 years, with the option to extend for
one further year, for an amount of £300m and with no accordion
option. The amount of £120m drawn down on the previous RCF was
rolled forward into the new facility.
Accordingly, the directors have a reasonable expectation that
the Group has adequate resources to continue in operation for the
foreseeable future and at least one year from the date of approval
of the financial statements. For this reason, they continue to
adopt the going concern basis in preparing its consolidated
financial statements.
2. Operating segments
Products and services from which reportable segments derive
their revenues
The 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, 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.
The Group has no individual product or customer which
contributes more than 10% of its revenues.
Geographical information
Revenues are attributed to regions based primarily on customers'
location. The Group's revenue from external customers and
information about its non-current segment assets (excluding
deferred tax) is set out below:
|
Revenue
|
Non-current
assets
|
|
Year ended
31 December
2022
£m
|
Year ended
31 December
2021
£m
|
As at
31 December
2022
£m
|
As at
31 December
2021
£m
|
The Americas
|
162.5
|
130.4
|
483.7
|
464.3
|
EMEA
|
90.1
|
84.3
|
237.0
|
231.8
|
China
|
62.9
|
58.2
|
8.0
|
8.6
|
Japan
|
17.9
|
18.7
|
0.4
|
0.2
|
Rest of Asia
Pacific
|
28.3
|
23.8
|
60.0
|
59.3
|
|
361.7
|
315.4
|
789.1
|
764.2
|
Revenue by type is shown below:
|
Year ended
31 December
2022
£m
|
Year ended
31 December
2021
£m
|
Catalogue
revenue
|
339.8
|
296.4
|
|
|
|
Custom products and
services
|
6.8
|
5.7
|
IVD
|
6.1
|
6.3
|
Custom products and
licensing
|
9.0
|
7.0
|
|
21.9
|
19.0
|
|
|
|
Total reported
revenue
|
361.7
|
315.4
|
3. Adjusted performance measures
A reconciliation of the Group's adjusted performance measures to
the reported IFRS measures is presented below:
|
Year ended 31 December 2022
|
Year ended 31 December
2021
|
|
Adjusted
£m
|
Adjusting
items
£m
|
Total
£m
|
Adjusted
£m
|
Adjusting
items
£m
|
Total
£m
|
|
|
|
|
|
|
|
Cost of
sales
|
(88.5)
|
(2.7)
|
(91.2)
|
(87.7)
|
(3.1)
|
(90.8)
|
Gross
profit
|
273.2
|
(2.7)
|
270.5
|
227.7
|
(3.1)
|
224.6
|
Selling, general and
administrative expenses
|
(176.3)
|
(48.2)
|
(224.5)
|
(150.6)
|
(39.1)
|
(189.7)
|
Research and
development expenses
|
(20.6)
|
(35.5)
|
(56.1)
|
(16.7)
|
(11.1)
|
(27.8)
|
Operating
profit
|
76.3
|
(86.4)
|
(10.1)
|
60.4
|
(53.3)
|
7.1
|
Finance
income
|
0.4
|
—
|
0.4
|
0.3
|
—
|
0.3
|
Finance
costs
|
(5.9)
|
—
|
(5.9)
|
(2.7)
|
—
|
(2.7)
|
Profit / (loss)
before tax
|
70.8
|
(86.4)
|
(15.6)
|
58.0
|
(53.3)
|
4.7
|
Tax
|
(13.1)
|
20.2
|
7.1
|
(10.8)
|
10.5
|
(0.3)
|
Profit / (loss) for
the year attributable to equity shareholders
|
57.7
|
(66.2)
|
(8.5)
|
47.2
|
(42.8)
|
4.4
|
Notes to the consolidated financial statements
For the year ended 31 December
2022
Analysis of adjusting items:
|
|
Year ended
31 December
2022
£m
|
Year ended
31 December
2021
£m
|
Amortisation of
fair value adjustments
|
(i)
|
(2.7)
|
(3.1)
|
Affecting gross
profit
|
|
(2.7)
|
(3.1)
|
|
|
|
|
Impairment of
intangible assets and asset held
for sale
|
(ii)
|
(18.3)
|
(1.1)
|
System and
process improvement costs
|
(iii)
|
(6.6)
|
(7.0)
|
Acquisition
costs
|
(iv)
|
—
|
(8.3)
|
Integration and
reorganisation costs
|
(v)
|
(15.7)
|
(4.7)
|
Amortisation of
acquisition intangibles
|
(vi)
|
(16.9)
|
(9.1)
|
Share-based
payment charges
|
(vii)
|
(26.2)
|
(20.0)
|
Affecting operating
profit and profit before tax
|
|
(86.4)
|
(53.3)
|
|
|
|
|
Tax effect of
adjusting items
|
|
20.2
|
10.5
|
Affecting
tax
|
|
20.2
|
10.5
|
|
|
|
|
Total adjusting
items
|
|
(66.2)
|
(42.8)
|
(i) Comprises amortisation of fair value adjustments
relating to the acquisition of BioVision, Inc as detailed in note
8. Following the acquisition, the Group recognised a fair value
uplift of £5.8m ($7.7m) to inventory
carried on the Group's balance sheet. This adjustment is being
amortised over 4 months from November
2021. Such costs are included within cost of sales.
(ii) During the year ended 31 December
2022, the assets relating to Firefly BioWorks multiplex and
assay technology were actively marketed, along with other assets
relating to this technology and product range. Accordingly, these
assets were classified as held for sale on the Group's balance
sheet, which included an allocation of goodwill (£1.6m). The group
was not successful in locating a buyer and a decision was made by
the directors, in the second half of 2022, to discontinue the
group's investment in these products and technology. As such an
impairment charge of £18.3m has been recognised within R&D
expenses within the income statement, with the carrying amount of
the assets classified as held for sale written down to £nil.
Further, associated deferred tax liabilities of £4.1m and other
liabilities of £0.2m were also released to the income statement, as
well as other costs associated with this decision of £0.2m. Details
can be found in note 4. The impairment charge is included within
research and development expenses.
During the year ended 31 December
2021 this charge comprises an impairment of internally
developed technology assets relating to AxioMx, following an
assessment of the work performed and costs capitalised to date.
Following the review, it was concluded that as a result of changes
in the scope and nature of the project to which the costs related,
and the corresponding usability of historical work performed, £1.1m
of internally developed technology assets were impaired. The
impairment charge is included within research and development
expenses.
(iii) Comprises costs of the strategic ERP implementation which
do not qualify for capitalisation and, for the year ended
31 December 2022, impairment charges
of £0.7m (year ended 31 December
2021: £2.1m), as a result of a software asset developed as
part of the ERP project that was no longer required. Such costs are
included within selling, general and administrative expenses.
(iv) Year ended 31 December 2021:
Comprises legal and other professional fees associated with the
acquisition of BioVision and other aborted acquisitions. Such costs
are included within selling, general and administrative
expenses.
(v) Year ended 31 December 2022:
Integration and reorganisation costs relate to the integration of
the acquired BioVision business as described in note 8 of £8.6m,
the accelerated depreciation of a property lease that is no longer
in use of £2.9m and de-listing and other set-up costs associated
with having a sole listing on Nasdaq of £4.2m. £0.1m of integration
and reorganisation costs are included within research and
development expenses and the remaining £15.6m is included within
selling, general and administrative expenses.
Year ended 31 December 2021:
Integration and reorganisation costs relate to the integration of
the acquired BioVision business a(comprising mainly legal and
professional fees) of £1.0m and reorganisation costs in the US and
Asia Pacific, relating to the
ongoing reorganisation of the Group's property portfolio of
£3.0m
(vi) Amortisation of £14.5m (year ended 31 December 2021: £6.8m) is included within
research and development expenses, with the remaining £2.4m (year
ended 31 December 2021: £2.3m)
included within selling, general and administrative expenses.
(vii) Comprises share-based payment charges of £23.3m (year
ended 31 December 2021: £17.9m) and
employer's tax contributions of £2.9m (year ended 31 December 2021: £2.1m) thereon for all the
Group's equity- and cash-settled schemes. Charges of £2.6m (year
ended 31 December 2021: £3.1m) are
included in research and development expenses, with the remaining
£23.6m (year ended 31 December 2021:
£16.9m) included within selling, general and administrative
expenses.
Notes to the consolidated financial statements
For the year ended 31 December
2022
4. Impairment of asset held for sale
Assets held for sale and subsequently impaired:
|
|
Impairment
of
assets held
for
sale
£m
|
Impaired assets held
for sale
|
|
|
|
|
|
Goodwill
|
|
1.6
|
Intangible
assets
|
|
15.8
|
Property, plant and
equipment
|
|
0.5
|
Inventories
|
|
0.4
|
Assets
|
|
18.3
|
Trade and other
payables
|
|
(0.2)
|
Deferred tax
liabilities
|
|
(4.1)
|
Liabilities
|
|
(4.3)
|
Impairment charges
impacting operating profit
|
|
18.3
|
Release of other
liabilities
|
|
(0.2)
|
Other costs associated
with discontinued investment
|
|
0.2
|
Expenses recognised
within operating profit
|
|
18.3
|
Release of deferred tax
liabilities
|
|
(4.1)
|
Loss recognised
within the income statement
|
|
14.2
|
During the year ended 31 December
2022, the assets relating to Firefly BioWorks multiplex and
assay technology were actively marketed, along with other assets
relating to this technology and product range, which included an
allocation of goodwill (£1.6m). The criteria for
classification as an Asset Held for Sale under IFRS 5 was met in
May 2022, when active marketing of
these assets had commenced, and these assets were classified as
held for sale on the group's balance sheet.
The group was not successful in locating a buyer and a decision
was made by the directors, in the second half of 2022, to
discontinue the group's investment in these products and
technology. As such an impairment charge of £18.3 m has been
recognised within R&D expenses within the income statement,
with the carrying amount of the assets classified as held for sale
written down to £nil. Further, associated deferred tax liabilities
of £4.1m and other liabilities of £0.2m were also released to the
income statement, as well as other costs associated with this
decision of £0.2m.
5. Taxation
|
|
Year ended
31 December 2022
£m
|
Year ended
31 December
2021
£m
|
Current tax
|
|
5.8
|
8.6
|
Deferred tax
|
|
(12.9)
|
(8.3)
|
Total income tax
(credit) / charge
|
|
(7.1)
|
0.3
|
|
|
|
|
Adjusted income tax
charge
|
(i)
|
13.1
|
10.5
|
(i) Adjusted income tax charge excludes the tax effects of
adjusting items which are set out in note 3.
The Group reported a net tax credit of £7.1m (year ended
31 December 2021: charge of £0.3m).
The net tax charge is reduced due to the credit from the 'patent
box' benefit in the UK, where a lower rate of tax is applied to
profits on patented income. The effective tax rate on adjusted
profits is 23.4% (year ended 31 December
2021: 19.7%).
The UK corporation tax rate for the year was 19.0% (31 December 2021: 19%). Taxation for other
jurisdictions is calculated at the rates prevailing in the
respective jurisdictions.
The Finance Act 2021 increased the UK corporation tax rate to
25% with effect from 1 April 2023.
This 25% rate has been applied in the deferred tax valuations based
on the expected timing of when such assets and liabilities will be
recovered.
Notes to the consolidated financial statements
For the year ended 31 December
2022
6. Earnings per share
The calculation of the basic and diluted EPS, shown below the
income statement, is based on the following data:
|
Year ended
31 December 2022
£m
|
Year ended
31 December
2021
£m
|
Earnings
|
|
|
Profit attributable to equity shareholders of the
parent – adjusted
|
57.7
|
47.2
|
Adjusting items (note
3)
|
(66.2)
|
(42.8)
|
(Loss) / profit attributable to equity shareholders
of the parent – reported
|
(8.5)
|
4.4
|
|
|
|
|
Million
|
Million
|
Number of shares
|
|
|
Weighted average number
of ordinary shares in issue
|
229.0
|
227.1
|
Less ordinary shares
held by Equiniti Share Plan Trustees Limited
|
(0.3)
|
(0.4)
|
Weighted average number of ordinary shares for the
purposes of basic EPS
|
228.7
|
226.7
|
Effect of potentially
dilutive ordinary shares: Share options and awards
|
2.6
|
2.2
|
Weighted average number of ordinary shares for the
purposes of diluted EPS
|
231.3
|
228.9
|
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 year.
Diluted EPS and adjusted EPS are calculated on the same basis as
basic EPS but with a further adjustment to the weighted average
number of 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 year and any
unvested shares which have met, or are expected to meet, the
performance conditions at the end of the year.
|
Year ended
31 December 2022
|
Year ended
31 December
2021
|
Basic EPS
|
(3.7)p
|
1.9p
|
Diluted EPS
|
(3.7)p
|
1.9p
|
Adjusted basic
EPS
|
25.2p
|
20.8p
|
Adjusted diluted
EPS
|
24.9p
|
20.6p
|
7. Notes to the cash flow statement
|
|
Year ended
31 December 2022
£m
|
Year ended
31 December
2021
£m
|
Operating profit for the year
|
|
(10.1)
|
7.1
|
Adjustments
for:
|
|
|
|
Depreciation of
property, plant and equipment
|
|
15.0
|
11.0
|
Depreciation of right
of use assets
|
|
11.5
|
9.1
|
Amortisation of
intangible assets
|
|
26.4
|
20.9
|
Impairment of
intangible assets
|
|
1.0
|
3.8
|
Impairment of asset
held for sale
|
|
18.3
|
—
|
Loss on disposal of
property, plant and equipment
|
|
—
|
0.5
|
Loss on disposal of
right of use asset
|
|
0.6
|
—
|
Derivative financial
instruments at fair value through profit or loss
|
|
0.2
|
—
|
Research and
development expenditure credit
|
|
(2.0)
|
(2.5)
|
Share-based payments
charge
|
|
23.3
|
17.9
|
Unrealised currency
translation losses / (gains)
|
|
(1.3)
|
0.4
|
Operating cash flows before movements in working
capital
|
|
82.9
|
68.2
|
Increase in
inventories
|
|
(7.4)
|
(6.2)
|
(Increase) / decrease
in receivables
|
|
(33.3)
|
4.0
|
(Decrease) / increase
in payables
|
|
(6.2)
|
6.2
|
Cash generated from operations
|
|
36.0
|
72.2
|
|
|
|
|
|
Notes to the consolidated financial statements
For the year ended 31 December
2022
8. Business Combinations
Year ended 31 December
2022
No business combinations were undertaken during the period.
During the 12 month period after the BioVision acquisition was
completed, several measurement period adjustments were identified
for new information obtained about facts and circumstances that
existed as of the acquisition date.
Following the completion of the acquisition, Abcam successfully
claimed $18m (£13.1m at the exchange
rate on the date of acquisition) from the escrow account
established for the purpose of the BioVision acquisition following
the discovery of previously undisclosed contractual terms with a
significant customer of BioVision. A reduction in consideration of
$18m (£13.1m) has been recognised in
relation to this, as well as a corresponding liability for exiting
this contract (which had been paid during the 12 months ended
31 December 2022). A deferred tax
asset of $3.8m (£2.7m at the exchange
rate on the date of acquisition) which has also been recognised on
the opening balance sheet of BioVision in relation to this
transaction.
In addition to the above, other liabilities totalling
$2.0m (£1.4m at the exchange rate on
the date of acquisition) were identified during the year after the
acquisition was completed. The total adjustment to goodwill was
$1.8m (£1.3m at the exchange rate on
the date of acquisition).
As at 31 December 2021, there was
a claim for a £1.1m adjustment to the consideration, which was
adjustable for certain net working capital balances for which an
estimate had been provided at the acquisition completion date. This
was recognised as a receivable on the Group's consolidated balance
sheet as at 31 December 2021 and the
claim was resolved and the cash for this was received during the 12
months ended 31 December 2022.
Year ended 31 December
2021
On 26 October 2021, Abcam US Group
Holdings Inc., a subsidiary of Abcam Plc, acquired 100% of the
issued share capital of NKY Biotech US, Inc. from Boai NKY Biotech
Co. Ltd for initial total cash consideration of $349.9m (£253.8m) and acquisition expenses of
£7.8m. NKY Biotech US, Inc. has one wholly owned subsidiary,
BioVision, Inc. (collectively 'BioVision'). BioVision is a leading
provider of biochemical and cell-based assays for biological
research. It also develops, produces, and sells a wide portfolio of
other products including recombinant proteins, antibodies, enzymes,
and biochemical compounds.
The acquisition accelerates Abcam's strategic ambitions within
the adjacent biochemical and cellular assay market and aligns with
existing areas of research focus including oncology,
immuno-oncology, neuroscience, and epigenetics.
The fair value of identifiable net assets acquired was as
follows:
|
Provisional Fair
Value
£'m
|
Adjustment
£'m
|
Final Fair
Value
£'m
|
Non-current
assets
|
|
|
|
Intangible
assets
|
80.6
|
—
|
80.6
|
Property, plant and
equipment
|
0.8
|
—
|
0.8
|
Right-of-use
assets
|
1.9
|
—
|
1.9
|
Deferred tax
asset
|
0.3
|
2.7
|
3.0
|
Current
assets
|
|
|
|
Inventory
|
8.1
|
—
|
8.1
|
Trade and other
receivables
|
3.3
|
—
|
3.3
|
Cash and cash
equivalents
|
10.0
|
—
|
10.0
|
Current
liabilities
|
|
|
|
Trade and other
payables
|
(2.3)
|
(14.5)
|
(16.8)
|
Lease
liabilities
|
(1.7)
|
—
|
(1.7)
|
Non-current
liabilities
|
|
|
|
Deferred tax
liabilities
|
(23.6)
|
—
|
(23.6)
|
Lease
liabilities
|
(0.6)
|
—
|
(0.6)
|
Total identifiable
net assets acquired
|
76.8
|
(11.8)
|
65.0
|
Goodwill
|
177.0
|
(1.3)
|
175.7
|
Total
consideration
|
253.8
|
(13.1)
|
240.7
|
|
|
|
|
|
|
|
|
|
|
|
Final Fair
Value
£'m
|
Consideration
|
|
|
|
Total
consideration
|
|
|
240.7
|
Adjustment for
settlement of pre-existing relationship
|
|
|
1.4
|
Consideration paid
in cash
|
|
|
242.1
|
|
|
|
|
|
|
|
Final Fair
Value
£'m
|
Net cash outflow on
acquisition
|
|
|
|
Consideration paid in
cash
|
|
|
242.1
|
Adjustment for
settlement of pre-existing relationship
|
|
|
(1.4)
|
Acquired cash and cash
equivalents
|
|
|
(10.0)
|
Net cash outflow on
acquisition
|
|
|
230.7
|
Foreign exchange
differences between acquisition and payment date
|
|
|
(2.0)
|
Consideration per
cash flow
|
|
|
228.7
|
Prior to acquisition, BioVision was a supplier of products to
Abcam and there was a trading balance of £1.4m outstanding at the
acquisition. As such, the consideration and total identifiable net
assets acquired have been adjusted to reflect this pre-existing
relationship, which was effectively settled upon acquisition.
The goodwill recognised is attributable to the expertise of the
assembled workforce, potential new technology and products and
leveraging Abcam's global channels to market.
11. Alternative performance measures
The Group's performance is assessed using a number of financial
measures which are not defined under IFRS and are therefore
non-GAAP (or alternative) performance measures. These are set out
as follows:
- Constant Exchange Rates ('CER') is a measure which allows
management to identify the relative year-on-year performance of the
business by removing the impact of currency movements which are
outside of management's control.
- Margin percentages (which are calculated by dividing the
relevant profit figure by revenue) for each of the relevant profit
metrics provide management with an insight into relative year on
year performance.
- Adjusted profit measures, as described in note 1(b) to the
financial information, are believed by the Directors to enable a
reader to obtain a fuller understanding of underlying performance
since they exclude items which are not reflective of the normal
course of business. Furthermore, such measures are reflective of
how performance is measured internally including targets against
which compensation is determined. Adjusted profit measures are
derived and reconciled to their reported IFRS equivalent on the
face of the consolidated income statement as well as in note 3 to
the financial information.
The key adjusted profit measure is adjusted operating
profit.
Adjusting items (which are excluded to arrive at adjusted
performance measures) are also described on the face of the income
statement and in note 3 to the financial information.
- Adjusted earnings per share measures are derived from adjusted
profit before tax with the rationale for their use being the same
as for adjusted profit metrics and are reconciled to their IFRS
equivalent in note 6 to the financial information.
- Free cash flow is defined on the face of the consolidated cash
flow statement and provides management with an indication of the
amount of cash available for discretionary investing or financing
after removing capital related items.
Notes to the consolidated financial statements
For the year ended 31 December
2022
12. Post balance sheet events
On 7 March 2023, the Group
replaced its existing RCF which was due to expire on January 31 2024 with a new RCF for an amount of
£300m.
In February 2019, the Group entered into an RCF with a
syndicate of banks for £200m with an additional £100m accordion
option. The Group drew down £120m on the RCF to fund the
BioVision acquisition in October 2021, and the RCF remained
drawn in this amount as of December 31,
2022.
The new RCF has a term of 4 years, with the option to extend for
one further year, for an amount of £300m and with no accordion
option. The amount of £120m drawn down on the previous RCF was
rolled forward into the new facility.
Borrowings under both the existing facility and the new facility
are unsecured but are guaranteed by certain of our material
subsidiary companies.
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SOURCE Abcam PLC