TIDMABC
RNS Number : 1253Z
ABCAM PLC
12 September 2022
ABCAM PLC
Interim results for the six-month period ended 30 June 2022
20% constant exchange rate revenue growth in H1: Demand for
Abcam In-house Products Increases
12 September 2022, Cambridge, UK - Abcam plc (Nasdaq: ABCM; AIM:
ABC) ('Abcam', the 'Group' or the 'Company') , a global leader in
the supply of life science research tools, today announces its
interim results for the six-month period ended 30 June 2022 (the
'period').
FINANCIAL PERFORMANCE
Six months ended
----------------------------
GBPm, unless stated otherwise 30 June 2022 30 June 2021
---------------------------------- ------------- -------------
Revenue 185.2 150.2
Reported gross profit margin, % 74.1% 71.4%
Adjusted gross profit margin*, % 75.6% 71.4%
---------------------------------- ------------- -------------
Reported operating profit 9.3 10.3
Adjusted operating profit** 42.6 26.5
Adjusted operating profit, % 23.0% 17.6%
---------------------------------- ------------- -------------
Net (debt) / cash*** (9.8) 219.9
---------------------------------- ------------- -------------
* Excludes the amortisation of the fair value of assets relating
to the inventory acquired in connection with the acquisition of
BioVision.
** Adjusted figures exclude systems and process improvement
costs, acquisition costs, amortisation of fair value adjustments,
integration and reorganisation costs, amortisation of acquisition
intangibles, share-based payments and employer tax contributions
thereon, and the tax effect of adjusting items. Such excluded items
are described as "adjusting items." Further information on these
items is shown in note 4 to the consolidated interim financial
statements. Share-based payments have been included in adjusting
items from the period ended 30 June 2022; the prior period has been
re-presented to be in line with the current period.
*** Net (debt) / cash comprises cash and cash equivalents less
borrowings.
FINANCIAL HIGHLIGHTS(1)
-- 20% constant exchange rate ('CER') revenue growth (23%
reported revenue growth), driven by in-house product sales and the
inclusion of BioVision
-- Adjusted gross margin increased 420 basis points aided by
in-house product mix, including the accretive impact from the
inclusion of BioVision
-- Adjusted operating cost increases were primarily driven by
higher selling, general & administrative expenses for
personnel, IT expenses for our digital strategy, and the inclusion
of BioVision. Adjusted operating profit margin expanded 540 bps to
23% driven by favourable product mix and operating leverage.
Reported operating profit decreased by GBP1.0m to GBP9.3m (H1 2021:
GBP10.3m)
-- Adjusted diluted earnings per share were 14.0p up 97% (H1 2021: 7.1p)
-- In-house new product development and sales experienced gains.
Total in-house revenue (including CP&L and BioVision) now
represents 67% of total revenue (H1 2021: 58%)
-- The Company's net debt position is a result of the BioVision
acquisition but improved as compared to 31 December 2021
(GBP24.1m)
STRATEGIC & OPERATIONAL HIGHLIGHTS(1)
-- Academic and Research customers returned to their labs,
although China continued to be impacted by COVID lockdowns
-- Pharmaceutical customers continue their efforts to understand disease-specific biomarkers
-- BioVision integration activities on track
-- Consistent key performance indicators(2)
o Product satisfaction rates H1 2022 99.0% (H1 2021: 98.8%)
o Customer transactional Net Promoter Score ('tNPS') H1 2022 +55
(H1 2021: +58)
-- Ongoing digital and physical infrastructure investments
including Waltham expansion, and new Singapore office
-- Installation of High Throughput Cell-Engineering Platform for edited cell lines
-- H1 2022 New Product Development of over 1,800 products
-- Recognised as the company with most CiteAb awards
-- Following a positive shareholder response, Board to seek
General Meeting before the end of the year to approve the
cancellation of its listing on AIM
Commenting on the performance, Alan Hirzel, Abcam's Chief
Executive Officer, said:
"I am proud of our team's effort to support our global customers
and the results those efforts generated in our first half of 2022.
We achieved 20% constant exchange rate revenue growth, 23% reported
revenue growth, driven by our multi-year dedication to increasing
in-house innovation at Abcam. These investments in innovation and
in our broader strategy, have sustained growth and expanded gross
margin in the period. As we move into the next phase of our
five-year strategic plan, we are moderating investment levels and
working toward higher operating leverage and adjusted operating
margin expansion. Looking ahead, we are confident in our growth
trajectory and committed to delivering our CY2022 guidance and
CY2024 goals."
CY2022 GUIDANCE
For the full year ending December 2022, we currently estimate
total revenue to increase approximately 20% CER including the
impact from the acquisition of BioVision, with organic CER growth
of mid-teens. We expect the contribution from the sale of higher
margin in-house products and the full year effect of BioVision to
contribute to a continuing increase in adjusted operating
margins.
SHARE TRADING, LIQUIDITY AND LISTING
Having consulted shareholders on its proposal to cancel the
admission of the Company's ordinary shares to trading on AIM,
leaving it with a listing solely on NASDAQ, and having received
positive responses from all consulted, in the coming weeks the
Board will issue a circular to convene an extraordinary general
meeting to seek shareholder approval for the cancellation of the
admission of the Company's shares to trading on AIM.
The circular will contain full details of the proposal, what
action shareholders will be required to take and information on the
impact of those holding ordinary shares.
Analyst and investor meeting and webcast :
Abcam will host a conference call and webcast for analysts and
investors today at 13:00 BST/ 08:00 EDT. For details, and to
register, please visit
corporate.abcam.com/investors/reports-presentations
For further details please contact FTI Consulting at
abcam@fticonsulting.com
A recording of the webcast will be made available on Abcam's
website, corporate.abcam.com /investors
Notes:
1. Throughout this report, 'H1 2021' and 'H1 2022' refer to the
six month periods ended 30 June 2021 and 30 June 2022,
respectively.
2. Key performance indicators are based on a rolling 12-month average.
The information communicated in this announcement contains
inside information for the purposes of Article 7 of the Market
Abuse Regulation (EU) No. 596/2014.
For further information please contact:
Abcam + 44 (0) 1223 696 000
Alan Hirzel, Chief Executive Officer
Michael Baldock, Chief Financial Officer
Tommy J. Thomas, CPA, Vice President, Investor Relations
Numis - Nominated Advisor & Joint Corporate Broker + 44 (0) 20 7260 1000
Freddie Barnfield / Duncan Monteith
Morgan Stanley - Joint Corporate Broker + 44 (0) 20 7425 8000
Tom Perry / Luka Kezic
FTI Consulting + 44 (0) 20 3727 1000
Ben Atwell / Julia Bradshaw / Lydia Jenkins
This announcement shall not constitute an offer to sell or
solicitation of an offer to buy any securities.
This announcement is not an offer of securities for sale in the
United States, and the securities referred to herein may not be
offered or sold in the United States absent registration except
pursuant to an exemption from, or in a transaction not subject to,
the registration requirements of the U.S. Securities Act of 1933,
as amended. Any public offering of such securities to be made in
the United States will be made by means of a prospectus that may be
obtained from the issuer, which would contain detailed information
about the company and management, as well as financial
statements.
Forward Looking 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 of targets, plans, objectives or goals for future
operations, including those related to Abcam's products, product
research, product development, product introductions and sales
forecasts; statements containing projections of or targets for
revenues, costs, income (or loss), earnings per share, capital
expenditures, dividends, capital structure, net financials and
other financial measures; statements regarding future economic and
financial performance ; statements regarding the scheduling and
holding of general meetings and AGMs; statements regarding the
assumptions underlying or relating to such statements; statements
about Abcam's portfolio and ambitions, as well as statements that
include the words "expect," "intend," "plan," "believe," "project,"
"forecast," "estimate," "may," "should," "anticipate" and similar
statements of a future or forward-looking nature. Forward-looking
statements are neither promises nor guarantees, but involve known
and unknown risks and uncertainties that could cause actual results
to differ materially from those projected, including, without
limitation: a regional or global health pandemic, including the
novel coronavirus ("COVID-19"), which has adversely affected
elements of our business, could severely affect our business,
including due to impacts on our operations and supply chains;
challenges in implementing our strategies
for revenue growth in light of competitive challenges;
developing new products and enhancing existing products, adapting
to significant technological change and responding to the
introduction of new products by competitors to remain competitive;
failing to successfully identify or integrate acquired businesses
or assets into our operations or fully recognise the anticipated
benefits of businesses or assets that we acquire; if our customers
discontinue or spend less on research, development, production or
other scientific endeavours; failing to successfully use, access
and maintain information systems and implement new systems to
handle our changing needs; cyber security risks and any failure to
maintain the confidentiality, integrity and availability of our
computer hardware, software and internet applications and related
tools and functions; failing to successfully manage our current and
potential future growth; any significant interruptions in our
operations; if our products fail to satisfy applicable quality
criteria, specifications and performance standards; failing to
maintain our brand and reputation; our dependence upon management
and highly skilled employees and our ability to attract and retain
these highly skilled employees; and the important factors discussed
under the caption "Risk Factors" in Abcam's prospectus pursuant to
Rule 424(b) filed with the U.S. Securities and Exchange Commission
("SEC") on 22 October 2020, which is on file with the SEC and is
available on the SEC website at www.sec.gov , as such factors may
be updated from time to time in Abcam's other filings with the SEC.
Any forward-looking statements contained in this announcement speak
only as of the date hereof and accordingly undue reliance should
not be placed on such statements. Abcam disclaims any obligation or
undertaking to update or revise any forward-looking statements
contained in this announcement, whether as a result of new
information, future events or otherwise, other than to the extent
required by applicable law.
Interim management report
Introduction
We are pleased with the steady progress of our business over the
past six months despite ongoing difficulties from COVID-19 related
lockdowns in China. As the pandemic continues to present isolated
challenges, we have focused on meeting the needs of our customers
driven by 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 invest in our technologies, people, capabilities, and
customer needs, we can extend our market leadership, sustain
durable growth, and become an increasingly influential partner
within our industry.
Demand for our products, and particularly Abcam's in-house
developed products, increased during the period. Whilst the global
pandemic situation continues to be fluid - and the risk of further
outbreaks and new variants remains - we estimate that overall lab
activity is now approaching pre-COVID levels in most of our
markets.
Having reached the halfway point in our 2024 Vision strategy, we
remain on track to achieve our guided revenues, adjusted operating
profit margin, and return on capital employed. As the multi-year
period of growth investments moderates, we expect to achieve
operating efficiencies resulting in adjusted operating profit
margin expansion consistent with the Board's expectations. We are
proud of our colleagues and teams around the world who have shown
audacity, agility, and dedication in the delivery of our plans -
they are fundamental to the Group's future success.
Underpinning our continued progress is our balance sheet and
financial position, which enables us to invest in attractive
organic and inorganic growth opportunities to accelerate Abcam's
strategic execution and focus on in-house innovation and products.
We continue to be pleased with the integration of BioVision, a
leading innovator of biochemical and cell-based assays.
Looking forward, with our expanding capabilities, financial
position and market opportunities for growth, the Company is
well-positioned to sustain long-term value creation.
Financial review
Six months ended 30 June
------------------------------------------------
Reported revenues
--------------------
Change
in reported
2022 2021 revenues CER growth
GBPm GBPm % %
------------------------------ --------- ---------
Catalogue revenue - regional split
Americas 74.6 53.5 39% 31%
EMEA 46.0 41.4 11% 13%
China* 30.3 25.7 18% 11%
Japan 10.0 9.8 2% 9%
Rest of Asia Pacific 13.7 10.9 26% 20%
--------- --------- ------------- -----------
Catalogue revenue 174.6 141.3 24% 20%
--------- --------- ------------- -----------
CP&L revenue (1) 10.6 8.9 19% 13%
--------- --------- ------------- -----------
Total reported revenue 185.2 150.2 23% 20%
--------- --------- ------------- -----------
Total revenue - product type
In-house 123.6 87.1 42% (2) 37%
Third party 61.6 63.1 (2%) (2) (5%)
--------- --------- ------------- -----------
Total reported revenue 185.2 150.2 23% 20%
--------- --------- ------------- -----------
* Revenues for Hong Kong have been reclassified from Rest of
Asia to China for the period ended 30 June 2022. The value
attributable to Hong Kong for the six months ended 30 June 2022 is
GBP0.8m (30 June 2021: GBP0.7m). The comparatives presented for the
six months ended 30 June 2021 have not been updated for this change
due to immateriality.
REVENUE
Revenue of GBP185.2 million (H1 2021: GBP150.2m) represents
approximately 20% CER growth over the prior period. Regionally,
growth was driven in the Americas with broad customer strength. In
the current period, BioVision's sales (previously reported as
third-party sales) have been treated as in-house from the date of
acquisition, resulting in 37% CER revenue growth. Product revenue
growth continues to be driven by growth in antibodies, assays,
proteins, and cell engineering sales.
GROSS MARGIN
Adjusted gross profit of GBP140.0 million (H1 2021: GBP107.2m)
equates to adjusted gross margin of 75.6% (H1 2021: 71.4%).
Adjusted gross margin expansion was benefitted from favourable
product mix from in-house products , including the accretive impact
of BioVision . Reported gross profit of GBP137.3 million (H1 2021:
GBP107.2m) equates to reported gross margin of 74.1% (H1 2021:
71.4%). Adjusted gross profit differs from reported gross profit by
GBP2.7 million impacted by the amortisation of the fair value of
assets relating to the inventory acquired in connection with the
acquisition of BioVision.
OPERATING COSTS
Six months ended 30 June
-------------------------------
Reported Adjusted
--------------- --------------
2022 2021 2022 2021
GBPm GBPm GBPm GBPm
----------------------------------------------------- ------- ------ ------ ------
Selling, general & administrative expenses ('SG&A') 108.9 85.8 87.3 72.7
Research & development expenses ('R&D') 19.1 11.1 10.1 8.0
----------------------------------------------------- ------- ------ ------ ------
Total operating costs and expenses 128.0 96.9 97.4 80.7
----------------------------------------------------- ------- ------ ------ ------
Adjusted operating costs of GBP97.4 million (H1 2021: GBP80.7m)
represents approximately 21% growth over the prior period.
Excluding BioVision, underlying growth was approximately 17%
primarily driven by higher selling, general and administrative
expenses reflecting increased investments in personnel as we build
out our in-house supply chain & logistics, and manufacturing
capabilities, as well as planned investments made during the period
in our platform to support the Company's growth. On a reported
basis, total reported costs were GBP128.0 million (H1 2021:
GBP96.9m) increased by GBP31.1 million or 32% reflecting the
adjusting items noted below.
ADJUSTING ITEMS
Total reported expenses include the following adjusting
items:
-- GBP2.6 million relating to the Oracle Cloud ERP project (H1 2021: GBP2.0m)
-- GBP6.0 million from acquisition, integration, and reorganisation charges (H1 2021: GBP3.5m)
-- GBP9.0 million relating to the amortisation of acquired intangibles (H1 2021: GBP4.0m)
-- GBP13.0 million in charges for share-based payments (H1 2021: GBP6.7m)
Note 4 in the notes to the interim financial statements provides
further detail on adjusting items and a reconciliation between
reported and adjusted profit measures.
NET PROFIT
Adjusted net profit was GBP32.2 million (H1 2021: GBP16.2m)
driven by revenue growth, favourable product mix enabling gross
margin expansion and modest cost growth. Reported net profit was
GBP5.8 million (H1 2021 GBP2.9m).
CASH
Cash of GBP109.6 million (period ended 31 December 2021:
GBP95.1m) increased by GBP14.5 million. The reported change is
driven by operating activities impacted by ongoing investments in
working capital and reduced by moderating investing, and financing
activities. The Company has outstanding borrowings net of fees of
GBP119.4 million, resulting from our acquisition of BioVision,
resulting in net debt of GBP9.8 million.
Notes:
1. Custom Products & Licensing (CP&L) revenue comprises
custom service revenue, revenue from the supply of IVD products and
royalty and licence income.
2. Sales from our acquisition of BioVision have been treated as
in-house from the date of acquisition impacting comparability.
Looking forward
We are achieving good momentum across the business as market
activity continues to recover. Investments we have made, and that
we continue to make, are enabling the business to sustain growth
and we remain committed to generating reven ue of GBP450 - 525m for
the year ending 31 December 2024 (calculated at the average
exchange rates for the 12 months ended June 2021).
In the more immediate term, uncertainty around the COVID-19
pandemic remains, yet laboratory activity and demand continue to
recover in most regions and trading performance year to date, in
spite of headwinds in China, is in line with the Board's
expectations.
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 moderating 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
12 September 2022
Forward Looking Statements
This report contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995.
Any express or implied statements contained in this announcement
that are not statements of historical fact may be deemed to be
forward-looking statements, including, without limitation
statements of targets, plans, objectives or goals for future
operations, including those related to Abcam's products, product
research, product development, product introductions and sales
forecasts; statements containing projections of or targets for
revenues, costs, income (or loss), earnings per share, capital
expenditures, dividends, capital structure, net financials and
other financial measures; statements regarding future economic and
financial performance ; statements regarding the scheduling and
holding of general meetings and AGMs; statements regarding the
assumptions underlying or relating to such statements; statements
about Abcam's portfolio and ambitions, as well as statements that
include the words "expect," "intend," "plan," "believe," "project,"
"forecast," "estimate," "may," "should," "anticipate" and similar
statements of a future or forward-looking nature. Forward-looking
statements are neither promises nor guarantees, but involve known
and unknown risks and uncertainties that could cause actual results
to differ materially from those projected, including, without
limitation: a regional or global health pandemic, including the
novel coronavirus ("COVID-19"), which has adversely affected
elements of our business, could severely affect our business,
including due to impacts on our operations and supply chains;
challenges in implementing our strategies for revenue growth in
light of competitive challenges; developing new products and
enhancing existing products, adapting to significant technological
change and responding to the introduction of new products by
competitors to remain competitive; failing to successfully identify
or integrate acquired businesses or assets into our operations or
fully recognise the anticipated benefits of businesses or assets
that we acquire; if our customers discontinue or spend less on
research, development, production or other scientific endeavours;
failing to successfully use, access and maintain information
systems and implement new systems to handle our changing needs;
cyber security risks and any failure to maintain the
confidentiality, integrity and availability of our computer
hardware, software and internet applications and related tools and
functions; failing to successfully manage our current and potential
future growth; any significant interruptions in our operations; if
our products fail to satisfy applicable quality criteria,
specifications and performance standards; failing to maintain our
brand and reputation; our dependence upon management and highly
skilled employees and our ability to attract and retain these
highly skilled employees; and the important factors discussed under
the caption "Risk Factors" in Abcam's prospectus pursuant to Rule
424(b) filed with the U.S. Securities and Exchange Commission
("SEC") on 22 October 2020, which is on file with the SEC and is
available on the SEC website at www.sec.gov , as such factors may
be updated from time to time in Abcam's other filings with the SEC.
Any forward-looking statements contained in this announcement speak
only as of the date hereof and accordingly undue reliance should
not be placed on such statements. Abcam disclaims any obligation or
undertaking to update or revise any forward-looking statements
contained in this announcement, whether as a result of new
information, future events or otherwise, other than to the extent
required by applicable law.
Responsibility statement
We confirm to the best of our knowledge:
-- the interim financial statements have been prepared in accordance with IAS 34;
-- the Financial and Operational highlights, Interim Management
Report and Interim Financial statements include a fair review of
the information required by the Financial Statements Disclosure and
Transparency Rules (DTR) 4.2.7R, being an indication of important
events that have occurred during the first six months of the
financial period and a description of the principal risks and
uncertainties for the remaining six months of the period; and
-- the Financial and Operational highlights and Interim
Management Report include a fair review of the information required
by DTR 4.2.8R, being related party transactions that have taken
place in the first six months of the current financial period and
that have materially affected the financial position or performance
of the entity during the period and also any changes in the related
party transactions described in the last Annual Report that could
do so.
At the date of this statement, the Directors are those listed in
the Annual Report and Accounts 2021 and there were no further
changes.
By order of the Board
Alan Hirzel
Chief Executive Officer
Michael S Baldock
Chief Financial Officer
12 September 2022
Independent review report to Abcam plc
Report on the condensed consolidated interim financial
statements
Our conclusion
We have reviewed Abcam plc's condensed consolidated interim
financial statements (the "interim financial statements") in the
interim report of Abcam plc for the 6 month period ended 30 June
2022 (the "period").
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 UK adopted
International Accounting Standard 34, 'Interim Financial Reporting'
and the AIM Rules for Companies.
The interim financial statements comprise:
-- the condensed consolidated balance sheet as at 30 June 2022;
-- 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
of Abcam plc have been prepared in accordance with UK adopted
International Accounting Standard 34, 'Interim Financial Reporting'
and the AIM Rules for Companies.
Basis for conclusion
We conducted our review in accordance with International
Standard on Review Engagements (UK) 2410, 'Review of Interim
Financial Information Performed by the Independent Auditor of the
Entity' issued by the Financial Reporting Council for use in the
United Kingdom. A review of interim financial information consists
of making enquiries, primarily of persons responsible for financial
and accounting matters, and applying analytical and other review
procedures.
A review is substantially less in scope than an audit conducted
in accordance with International Standards on Auditing (UK) and,
consequently, does not enable us to obtain assurance that we would
become aware of all significant matters that might be identified in
an audit. Accordingly, we do not express an audit opinion.
We have read the other information contained in the interim
report and considered whether it contains any apparent
misstatements or material inconsistencies with the information in
the interim financial statements.
Conclusions relating to going concern
Based on our review procedures, which are less extensive than
those performed in an audit as described in the Basis for
conclusion section of this report, nothing has come to our
attention to suggest that the directors have inappropriately
adopted the going concern basis of accounting or that the directors
have identified material uncertainties relating to going concern
that are not appropriately disclosed. This conclusion is based on
the review procedures performed in accordance with this ISRE.
However, future events or conditions may cause the group to cease
to continue as a going concern.
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. In preparing the interim report, including
the interim financial statements, the directors are responsible for
assessing the group's ability to continue as a going concern,
disclosing, as applicable, matters related to going concern and
using the going concern basis of accounting unless the directors
either intend to liquidate the group or to cease operations, or
have no realistic alternative but to do so.
Our responsibility is to express a conclusion on the interim
financial statements in the interim report based on our review. Our
conclusion, including our Conclusions relating to going concern, is
based on procedures that are less extensive than audit procedures,
as described in the Basis for conclusion paragraph of this report.
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.
PricewaterhouseCoopers LLP
Chartered Accountants
Cambridge
12 September 2022
Condensed consolidated income statement
For the six month period ended 30 June 2022
Six months ended 30 June 2022 (unaudited) Six months ended 30 June 2021 (unaudited)
-------------------------------------------- ---------------------------------------------
Adjusted Adjusting items Total Adjusted Adjusting items Total
Note GBPm GBPm GBPm GBPm GBPm GBPm
---------------- ----- ------------- ---------------- ----------- ------------- ---------------- ------------
Revenue 185.2 - 185.2 150.2 - 150.2
Cost of sales (45.2) (2.7) (47.9) (43.0) - (43.0)
---------------- ----- ------------- ---------------- ----------- ------------- ---------------- ------------
Gross profit 140.0 (2.7) 137.3 107.2 - 107.2
Selling,
general and
administrative
expenses* (87.3) (21.6) (108.9) (72.7) (13.1) (85.8)
Research and
development
expenses* (10.1) (9.0) (19.1) (8.0) (3.1) (11.1)
---------------- ----- ------------- ---------------- ----------- ------------- ---------------- ------------
Operating
profit 42.6 (33.3) 9.3 26.5 (16.2) 10.3
Finance income 0.1 - 0.1 0.2 - 0.2
Finance costs (2.0) - (2.0) (1.3) - (1.3)
Profit before
tax 40.7 (33.3) 7.4 25.4 (16.2) 9.2
Tax 5 (8.5) 6.9 (1.6) (9.2) 2.9 (6.3)
---------------- ----- ------------- ---------------- ----------- ------------- ---------------- ------------
Profit for the
period
attributable
to equity
shareholders
of the parent 32.2 (26.4) 5.8 16.2 (13.3) 2.9
---------------- ----- ------------- ---------------- ----------- ------------- ---------------- ------------
Earnings per
share
Basic earnings
per share 6 14.1p 2 .5p 7.2p 1.3p
Diluted
earnings per
share 6 14.0p 2 .5p 7.1p 1.3p
---------------- ----- ------------- ---------------- ----------- ------------- ---------------- ------------
* During the period ended 30 June 2022, share-based payment
charges and employer tax contributions thereon have been included
in adjusting items. The prior period has been re-presented to be in
line with the current period.
Adjusted figures exclude system and process improvement costs,
acquisition costs, amortisation of fair value adjustments,
integration and reorganisation costs, amortisation of acquisition
intangible assets, share-based payments and employer tax
contributions thereon, and the tax effect of adjusting items. Such
excluded items are described as "adjusting items". Further
information on these items is shown in note 4.
Condensed consolidated statement of comprehensive income
For the six month period ended 30 June 2022
Six months
Six months ended
ended 30 June 2021
30 June 2022 (unaudited) (unaudited)
GBPm GBPm
-------------------------------------------------------------------- --- --------------------------- --------------
Profit for the period attributable to equity shareholders of the parent 5.8 2.9
------------------------------------------------------------------------- --------------------------- --------------
Items that may be reclassified to the income statement in
subsequent periods
Movement on cash flow hedges (0.7) -
Exchange differences on translation of foreign operations 56.5 (5.4)
Movement in fair value of investments (0.3) (0.1)
Tax relating to components of other comprehensive income 0.2 -
-------------------------------------------------------------------- --- --------------------------- --------------
Other comprehensive income / (expense) for the period 55.7 (5.5)
------------------------------------------------------------------------- --------------------------- --------------
Total comprehensive income / (expense) for the period 61.5 (2.6)
------------------------------------------------------------------------- --------------------------- --------------
Condensed consolidated balance sheet
As at 30 June 2022
As at As at
30 June 31 December As at
2022 2021 30 June 2021 restated*
(unaudited) (audited) (unaudited)
Note GBPm GBPm GBPm
------------------------------------------------ ----- ----------------- --------------- -------------------------
Non-current assets
Goodwill 9 397.9 364.8 181.0
Intangible assets 228.0 234.2 152.5
Property, plant and equipment 78.7 73.5 66.2
Right-of-use assets 87.0 88.2 93.8
Investments 8 3.3 3.5 3.5
Deferred tax asset 12.0 10.4 5.1
806.9 774.6 502.1
------------------------------------------------ ----- ----------------- --------------- -------------------------
Current assets
Inventories 57.5 58.2 45.9
Trade and other receivables 61.6 47.2 46.4
Current tax receivable 10.5 10.5 6.9
Derivative financial instruments 8 0.3 0.5 0.6
Cash and cash equivalents 109.6 95.1 219.9
------------------------------------------------ ----- ----------------- --------------- -------------------------
239.5 211.5 319.7
------------------------------------------------ ----- ----------------- --------------- -------------------------
Assets classified as held for sale 10 18.3 - -
------------------------------------------------ ----- ----------------- --------------- -------------------------
257.8 211.5 319.7
------------------------------------------------ ----- ----------------- --------------- -------------------------
Total assets 1,064.7 986.1 821.8
------------------------------------------------ ----- ----------------- --------------- -------------------------
Current liabilities
Trade and other payables (56.7) (54.2) (57.1)
Derivative financial instruments 8 (0.9) (0.2) (0.1)
Lease liabilities (14.0) (9.2) (8.1)
Borrowings (119.4) (119.2) -
Current tax liabilities (8.9) (4.4) (1.6)
------------------------------------------------ ----- ----------------- --------------- -------------------------
(199.9) (187.2) (66.9)
------------------------------------------------ ----- ----------------- --------------- -------------------------
Liabilities associated with assets classified
as held for sale 10 (3.9) - -
------------------------------------------------ ----- ----------------- --------------- -------------------------
(203.8) (187.2) (66.9)
------------------------------------------------ ----- ----------------- --------------- -------------------------
Net current assets 54.0 24.3 252.8
------------------------------------------------ ----- ----------------- --------------- -------------------------
Non-current liabilities
Deferred tax liability (36.8) (41.5) (20.0)
Lease liabilities (96.5) (101.3) (102.4)
(133.3) (142.8) (122.4)
------------------------------------------------ ----- ----------------- --------------- -------------------------
Total liabilities (337.1) (330.0) (189.3 )
------------------------------------------------ ----- ----------------- --------------- -------------------------
Net assets 727.6 656.1 632.5
------------------------------------------------ ----- ----------------- --------------- -------------------------
Equity
Share capital 0.5 0.5 0.5
Share premium account 268.9 268.3 265.5
Merger reserve 68.6 68.6 68.6
Own shares (2.0) (2.2) (2.3)
Translation reserve 87.6 31.1 20.0
Hedging reserve (0.4) 0.2 0.2
Retained earnings 304.4 289.6 280.0
------------------------------------------------ ----- ----------------- --------------- -------------------------
Total equity attributable to the equity
shareholders of the parent 727.6 656.1 632.5
------------------------------------------------ ----- ----------------- --------------- -------------------------
* See note 2 for details of the prior period restatement.
Approved by the Board of directors and authorised for issue on
12 September 2022.
Condensed consolidated statement of changes in equity
For the six month period ended 30 June 2022 (unaudited)
Share
Share premium Merger Own Translation Hedging Retained
capital account reserve shares Reserve reserve earnings Total equity
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
----------------------- --------- --------- --------- -------- ------------ --------- ---------- -------------
Balance as at 1
January 2022 0.5 268.3 68.6 (2.2) 31.1 0.2 289.6 656.1
----------------------- --------- --------- --------- -------- ------------ --------- ---------- -------------
Profit for the period - - - - - - 5.8 5.8
Other comprehensive
income / (expense) - - - - 56.5 (0.6) (0.2) 55.7
----------------------- --------- --------- --------- -------- ------------ --------- ---------- -------------
Total comprehensive
income / (expense)
for the period - - - - 56.5 (0.6) 5.6 61.5
----------------------- --------- --------- --------- -------- ------------ --------- ---------- -------------
Issue of ordinary
shares - 0.6 - - - - - 0.6
Own shares disposed of
on exercise of share
options - - - 0.2 - - (0.2) -
Share-based payments
inclusive of deferred
tax - - - - - - 9.6 9.6
Purchase of own shares - - - - - - (0.2) (0.2)
Balance as at 30 June
2022 0.5 268.9 68.6 (2.0) 87.6 (0.4) 304.4 727.6
----------------------- --------- --------- --------- -------- ------------ --------- ---------- -------------
For the six month period ended 30 June 2021 restated*
(unaudited)
Share
Share premium Merger Own Translation Hedging Retained
capital account reserve shares reserve reserve earnings Total
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
---------------------------- --------- --------- --------- -------- ------------ --------- ---------- ------
Balance as at 1 January
2021 (as previously
reported) 0.5 265.1 68.6 (2.4) 25.4 0.2 273.9 631.3
---------------------------- --------- --------- --------- -------- ------------ --------- ---------- ------
Prior period restatement* - - - - - - (2.2) (2.2)
---------------------------- --------- --------- --------- -------- ------------ --------- ---------- ------
Balance as at 1 January
2021 (restated) 0.5 265.1 68.6 (2.4) 25.4 0.2 271.7 629.1
---------------------------- --------- --------- --------- -------- ------------ --------- ---------- ------
Profit for the period - - - - - - 2.9 2.9
Other comprehensive expense - - - - (5.4) - (0.1) (5.5)
---------------------------- --------- --------- --------- -------- ------------ --------- ---------- ------
Total comprehensive
(expense) / income for the
period - - - - (5.4) - 2.8 (2.6)
---------------------------- --------- --------- --------- -------- ------------ --------- ---------- ------
Issue of ordinary shares,
net of share issue costs - 0.4 - - - - - 0.4
Own shares disposed of on
exercise of share options - - - 0.1 - - (0.1) -
Share-based payments
inclusive of deferred tax - - - - - - 5.6 5.6
Balance as at 30 June 2021 0.5 265.5 68.6 (2.3) 20.0 0.2 280.0 632.5
---------------------------- --------- --------- --------- -------- ------------ --------- ---------- ------
* See note 2 for details of the prior period restatement.
Condensed consolidated cash flow statement
For the six month period ended 30 June 2022
Six months
Six months ended
ended 30 June 2021
30 June 2022 (unaudited) (unaudited)
Note GBPm GBPm
------------------------------------------------------------------------- -------------------------- ---------------
Cash generated from operations 7 33.3 43.5
Net income taxes paid (3.5) (5.3)
------------------------------------------------------------------ ----- -------------------------- ---------------
Net cash inflow from operating activities 29.8 38.2
------------------------------------------------------------------ ----- -------------------------- ---------------
Investing activities
Interest income 0.1 0.2
Purchase of property, plant and equipment (4.5) (20.3)
Purchase of intangible assets (11.0) (12.0)
Transfer of cash from escrow in respect of future capital
expenditure 0.3 -
Reimbursement of leasehold improvement costs - 9.0
Purchase of investments - (0.1)
Net cash inflow arising from acquisitions 9 1.2 -
Net cash outflow from investing activities (13.9) (23.2)
------------------------------------------------------------------ ----- -------------------------- ---------------
Financing activities
Principal element of lease obligations (5.7) (4.7)
Interest element of lease obligations (0.9) (0.7)
Interest paid (1.1) (0.3)
Proceeds on issue of shares, net of issue costs 0.6 0.4
Facility arrangement fees - (0.8)
Purchase of own shares (0.2) -
------------------------------------------------------------------ ----- -------------------------- ---------------
Net cash outflow from financing activities (7.3) (6.1)
------------------------------------------------------------------ ----- -------------------------- ---------------
Net increase cash and cash equivalents 8.6 8.9
------------------------------------------------------------------ ----- -------------------------- ---------------
Cash and cash equivalents at beginning of period 95.1 211.9
Effect of foreign exchange rates 5.9 (0.9)
------------------------------------------------------------------ ----- -------------------------- ---------------
Cash and cash equivalents at end of period (i) 109.6 219.9
------------------------------------------------------------------ ----- -------------------------- ---------------
Free cash flow (ii) 8.0 9.5
------------------------------------------------------------------ ----- -------------------------- ---------------
(i) Wit hin cash and cash equivalents is GBPnil (30 June 2021:
GBP1.6m) of cash relating to employee contributions to the Group's
share scheme 'AbShare', which is reserved for the purpose of
purchasing shares upon vesting.
(ii) Free cash flow comprises net cash generated from operating
activities less net capital expenditure, reimbursement of leasehold
improvement costs, transfer of cash from/(to) escrow in respect of
future capital expenditure, and the principal and interest elements
of lease obligations.
Notes to the condensed consolidated interim financial
statements
For the six month period ended 30 June 2022
1. General information
The condensed consolidated interim financial statements for the
six month period ended 30 June 2022 are unaudited and do not
comprise statutory accounts within the meaning of section 434 of
the Companies Act 2006, but have been reviewed by the auditor. They
do not include all of the information required in annual financial
statements in accordance with IFRS, and should be read in
conjunction with the consolidated financial statements for the 18
month period ended 31 December 2021. The financial information for
the period ended 31 December 2021 does not constitute the Company's
statutory accounts for that period, but has been extracted from
those accounts, which were approved by the Board of Directors on 14
March 2022 and have been delivered to the Registrar of Companies.
The auditor has reported on those accounts, their opinion was
unqualified, did not draw attention to any matters by way of
emphasis and did not contain any statement under section 498(2) or
(3) of the Companies Act 2006.
2. Basis of preparation
The condensed interim financial statements for the six month
period ended 30 June 2022 included in this interim financial report
have been prepared in accordance with UK adopted International
Accounting Standard 34, 'Interim Financial Reporting' and the AIM
Rules for Companies, and have been prepared on a going concern
basis as described further below.
a. Accounting policies
The accounting policies adopted in the preparation of the
condensed consolidated interim financial statements are those as
set out in the Group's financial statements for the period ended 31
December 2021, except for the following:
Assets held for sale
Assets are classified as assets held for sale when their
carrying amount is to be recovered principally through a sale
transaction rather than through continuing use, and a sale is
considered highly probable. They are measured at the lower of their
carrying amount and fair value less costs to sell. Non-current
assets are not depreciated or amortised while they are classified
as held for sale. Assets classified as held for sale and the
associated liabilities are presented separately from other assets
and liabilities on the condensed consolidated balance sheet.
Tax
Taxes on income in the interim periods are accrued using the tax
rate that would be applicable to the expected total annual profit.
This is described in note 5.
New accounting standards and interpretations
There have not been any new standards or interpretations adopted
in the period which would have a material financial impact on, or
disclosure requirement for, the Group's interim report.
b. Critical accounting judgements and sources of estimation
uncertainty
Judgements and estimates are the same as those as set out in the
Group's financial statements for the period ended 31 December 2021,
except for the following:
Assets held for sale
Judgement, which is subject to change as new information becomes
available, can be required in determining when as asset is
classified as held for sale, as described in the accounting
policies section. A change in that judgement could result in an
impairment charge, depending on whether classification requires a
write-down of the asset to its fair value less costs to sell.
c. Going concern
The directors have prepared the interim financial statements on
a going concern basis. In considering going concern, the directors
have considered the Group's forecasts and projections, taking
account of reasonably possible changes in trading performance.
These show that the Group is expected to operate within the limits
of its available resources.
Accordingly, the directors have a reasonable expectation that
the Group has adequate resources to continue in operation for the
foreseeable future and a period of not less than twelve months from
the date of this report. Accordingly, the going concern basis has
been adopted in preparing the interim financial report.
Notes to the condensed consolidated interim financial statements
(continued)
For the six month period ended 30 June 2022
2. Basis of preparation (continued)
d. 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 period to period. Adjusted performance measures may not be
directly comparable with other similarly titled measures used by
other companies. A detailed reconciliation between reported and
adjusted measures is presented in note 4.
For the period ended 30 June 2022, charges associated with
share-based payment schemes have been included as adjusting items.
The income statement for the period ended 30 June 2021 has been
re-presented to reflect these charges within adjusting items.
Although share-based compensation is an important aspect of the
compensation of our employees and executives, management believes
it is useful to exclude share-based compensation expenses from
adjusted profit measures to better understand the long-term
performance of our core business. Share-based compensation expenses
are non-cash charges and are determined using several factors,
including expectations surrounding future performance, employee
forfeiture rates and, for employee payroll-related tax items, the
share price. These factors are beyond the Group's direct control
and generally unrelated to operational decisions and performance in
any particular period. Further, share-based compensation expenses
are not reflective of the value ultimately received by the
recipients of the awards.
e. Restatement of prior period results - Software as a Service
('SaaS') arrangements
In March 2021, The IFRS Interpretations Committee ('IFRIC')
published an agenda decision on how an entity should account for
costs of configuring or customising application software in a Cloud
Computing or Software as a Service ('SaaS') arrangement.
Previously, internal and external costs incurred in connection
with the various phases of the Group's ERP implementation and other
projects, have been capitalised as an intangible asset in line with
IAS 38 'Intangible Assets'. During the period ended 31 December
2021, following an internal review of the impact of adoption of the
IFRIC, the Group identified some SaaS costs had previously been
capitalised, that should have been expensed.
This change in accounting policy led to adjustments amounting to
a GBP2.7m reduction in the intangible assets, and a GBP0.5m
reduction in the deferred tax liability recognised in the 30 June
2021 balance sheet.
The following tables show the impact of the change in accounting
policy on previously reported financial results:
Six months ended 30 June 2021:
As previously reported Adjustment As restated
GBPm GBPm GBPm
Impact on balance sheet
Intangible assets 155.2 (2.7) 152.5
------------------------------- ----------------------- ----------- ------------
Total non-current assets 504.8 (2.7) 502.1
Deferred tax liability (20.5) 0.5 (20.0)
------------------------------- ----------------------- ----------- ------------
Total non-current liabilities (122.9) 0.5 (122.4)
------------------------------- ----------------------- ----------- ------------
Net assets 634.7 (2.2) 632.5
------------------------------- ----------------------- ----------- ------------
Retained earnings 282.2 (2.2) 280.0
------------------------------- ----------------------- ----------- ------------
Total equity 634.7 (2.2) 632.5
------------------------------- ----------------------- ----------- ------------
Notes to the condensed consolidated interim financial statements
(continued)
For the six month period ended 30 June 2022
3. Operating segments
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 under IFRS 8 Operating Segments,
which is 'sales of antibodies and related products'. The Group's
revenue and assets for this one reportable segment can be
determined by reference to the Group's income statement and balance
sheet.
Geographical information
Revenues are attributed to regions based primarily on customers'
location. The Group's revenue from external customers is set out
below:
Six months ended
30 June 2022 Six months ended
(unaudited) 30 June 2021 (unaudited)
GBPm GBPm
-------------- --- ----- ----------------- --------------------------
The Americas 8 2.2 61.2
EMEA 4 7.2 42.4
China (i) 3 1.6 25.8
Japan 1 0.3 9.7
Rest of Asia (i) 1 3.9 11.1
185.2 150.2
------------------------ ----------------- --------------------------
(i) Revenues for Hong Kong have been reclassified from Rest of
Asia to China for the period ended 30 June 2022. The value
attributable to Hong Kong for the six months ended 30 June 2022 is
GBP0.8m (30 June 2021: GBP0.7m). The comparatives presented for the
six months ended 30 June 2021 have not been updated for this change
due to immateriality.
Revenue by type is shown below:
Six months ended
30 June 2022 Six months ended
(unaudited) 30 June 2021 (unaudited)
GBPm GBPm
------------------------------- --- ----------------- --------------------------
Catalogue revenue 174.6 141.3
Custom products and services 2.8 2.4
IVD 3.4 3.1
Royalties and licenses 4.4 3.4
------------------------------------ ----------------- --------------------------
Custom products and licensing 10.6 8.9
------------------------------------ ----------------- --------------------------
Total reported revenue 185.2 150.2
------------------------------------ ----------------- --------------------------
Notes to the condensed consolidated interim financial statements
(continued)
For the six month period ended 30 June 2022
4. Adjusted performance measures
A reconciliation of the Group's adjusted performance measures to
reported IFRS measures is presented below:
Six months ended 30 June 2021
Six months ended 30 June 2022 (unaudited) (unaudited)
---------------------------------------------- --------------------------------------
Adjusted Adjusting items Total Adjusted Adjusting items Total
GBPm GBPm GBPm GBPm GBPm GBPm
------------------------------ ------------ -------------------- ---------- --------- ---------------- ---------
Cost of sales (45.2) (2.7) (47.9) (43.0) - (43.0)
Gross profit 140.0 (2.7) 137.3 107.2 - 107.2
Selling, general and
administrative expenses* (87.3) (21.6) (108.9) (72.7) (13.1) (85.8)
Research and development
expenses* (10.1) (9.0) (19.1) (8.0) (3.1) (11.1)
------------------------------ ------------ -------------------- ---------- --------- ---------------- ---------
Operating profit 42.6 (33.3) 9.3 26.5 (16.2) 10.3
Finance income 0.1 - 0.1 0.2 - 0.2
Finance costs (2.0) - (2.0) (1.3) - (1.3)
Profit before tax 40.7 (33.3) 7.4 25.4 (16.2) 9.2
Tax (8.5) 6.9 (1.6) (9.2) 2.9 (6.3)
------------------------------ ------------ -------------------- ---------- --------- ---------------- ---------
Profit for the period 32.2 (26.4) 5.8 16.2 (13.3) 2.9
------------------------------ ------------ -------------------- ---------- --------- ---------------- ---------
* During the period ended 30 June 2022, share-based payment
charges and employer tax contributions thereon have been included
in adjusting items. The prior period has been re-presented to be in
line with the current period.
An analysis of adjusting items is presented below:
Six months ended Six months ended
30 June 2022 30 June 2021
(unaudited) (unaudited)
GBPm GBPm
-------------------------------------------------- --- ------- ----------------- -----------------
Amortisation of fair value adjustments (i) (2.7) -
-------------------------------------------------- --- ------- ----------------- -----------------
Affecting gross profit (2.7) -
System and process improvement costs (ii) (2.6) (2.0)
Acquisition costs (iii) - (1.0)
Integration and reorganisation costs (iv) (6.0) (2.5)
Amortisation of acquisition intangibles (v) (9.0) (4.0)
Share-based payment charges* (vi) (13.0) (6.7)
Affecting operating profit and profit before tax (33.3) (16.2)
Tax effect of adjusting items 6.9 2.9
Affecting tax 6.9 2.9
Total adjusting items after tax (26.4) (13.3)
---------------------------------------------------------------- ----------------- -----------------
* During the period ended 30 June 2022, share-based payment
charges and employer tax contributions thereon have been included
in adjusting items. The prior period has been re-presented to be in
line with the current period.
Notes to the condensed consolidated interim financial statements
(continued )
For the six month period ended 30 June 2022
4. Adjusted performance measures (continued)
(i) Comprises amortisation of fair value adjustments relating to
the acquisition of BioVision. Following the acquisition, the Group
recognised a fair value uplift of GBP6.0m to inventory carried on
the Group's balance sheet. This adjustment was amortised over 4
months from November 2021 and are now fully amortised. Such costs
are included within cost of sales.
(ii) Comprises costs of the strategic ERP implementation which
do not qualify for capitalisation. Such costs are included within
selling, general and administrative expenses.
(iii) Comprises legal and other professional fees associated
with the acquisition of BioVision. Such costs are included within
selling, general and administrative expenses .
(iv) Six months ended 30 June 2022: integration and
reorganisation costs relate primarily to the integration of
BioVision (comprising mainly retention and severance costs,
employee backfill costs for those involved in the integration,
settlement costs and professional fees) and footprint costs. Six
months ended 30 June 2021: integration and reorganisation costs
relate to the reorganisation and property related costs in respect
of the alignment of the Group's operating structure and geographic
footprint to its strategic goals. These costs are included in
selling, general and administrative expenses.
(v) For the six month period ended 30 June 2022, GBP7.6m (30
June 2021: GBP3.0m) of amortisation of acquisition intangibles is
included in research and development expenses, with the remaining
GBP1.4m (30 June 2021: GBP1.0m) included in selling, general and
administrative expenses.
(vi) Comprises share-based payment charges and employer's tax
contributions thereon for all the Group's equity- and cash-settled
schemes. Charges of GBP1.4m (30 June 2021: GBP0.1m) are included in
research and development expenses, with the remaining GBP11.6m (30
June 2021: GBP6.6m) included within selling, general and
administrative expenses.
Notes to the condensed consolidated interim financial statements
(continued )
For the six month period ended 30 June 2022
5. Income tax
The major components of the income tax charge in the income
statement are as follows:
Six months Six months
ended ended
30 June 2022 30 June 2021
(unaudited) (unaudited)
GBPm GBPm
--------------------------------------------------- ----- -------------- --------------
Current tax
Current income tax charge 9.3 3.1
Adjustment in respect of prior years - 0.4
9.3 3.5
Deferred tax
Origination and reversal of temporary differences (7.7) (1.0)
Adjustment in respect of prior years - 0.3
Effect of tax rate change - 3.5
---------------------------------------------------------- -------------- --------------
(7.7) 2.8
--------------------------------------------------------- -------------- --------------
Total income tax charge 1.6 6.3
---------------------------------------------------------- -------------- --------------
Adjusted income tax charge* (i) 8.5 9.2
--------------------------------------------------- ----- -------------- --------------
* During the period ended 30 June 2022, share-based payment
charges and employer tax contributions thereon have been included
in adjusting items. The prior period has been re-presented to be in
line with the current period.
(i) Adjusted income tax charge excludes the tax effects of
adjusting items as set out in note 4.
The Group reported a net tax charge of GBP1.6 m (30 June 2021:
GBP6.3m). The tax charge for the six months ended 30 June 2021 was
higher due to a restatement of certain deferred tax balances in
line with the enactment of the change in UK corporation tax rates
to 25% with effect from 1 April 2023.
The UK Corporation Tax rate for the six months ended 30 June
2022 was 19% (30 June 2021: 19%). Taxation for other jurisdictions
is calculated at the rate prevailing in the relevant
jurisdictions.
Effective tax rates represent management's best estimate of the
average annual effective tax rate on reported or adjusted profits
with these rates being applied to the six months results.
The estimated effective rate of tax on the reported profit for
the six months ended 30 June 2022 is approximately 21.6 % (30 June
2021: 68.5%), which represents management's best estimate of the
average annual effective tax rate on profits expected for the six
month period.
The estimated effective rate of tax on adjusted profits for the
six months ended 30 June 2022 is approximately 20.9 % (30 June
2021: 36.2%).
Notes to the condensed consolidated interim financial statements
(continued )
For the six month period ended 30 June 2022
6. Earnings per share
The calculation of earnings per ordinary share (EPS) and
adjusted earnings per ordinary share (adjusted EPS) are based on
profit after tax, and adjusted profit after tax, respectively,
attributable to owners of the parent and the weighted number of
shares in issue during the period.
Adjusted EPS figures have been calculated based on earnings
before adjusting items which are considered significant in nature
or value and which are described in note 4.
Six months Six months
ended ended
30 June 2022 30 June 2021
(unaudited) (unaudited)
GBPm GBPm
---------------------------------------------------------------------------- --------------- ---------------
Profit attributable to equity shareholders of the parent - adjusted 32.2 16.2
Adjusting items (26.4) (13.3)
---------------------------------------------------------------------------- --------------- ---------------
Profit attributable to equity shareholders of the parent - total reported 5.8 2.9
---------------------------------------------------------------------------- --------------- ---------------
Million Million
Weighted average number of ordinary shares in issue 228.9 226.7
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 228.6 226.3
Effect of potentially dilutive ordinary shares - share options and awards 2.0 3.1
Weighted average number of ordinary shares for the purposes of diluted EPS 230.6 229.4
---------------------------------------------------------------------------- --------------- ---------------
Basic EPS and adjusted EPS are calculated by dividing the
earnings attributable to the equity shareholders of the parent by
the weighted average number of shares outstanding during the
period. Diluted EPS and adjusted diluted EPS are calculated by
adjusting the weighted average number of ordinary shares
outstanding to assume conversion of all potentially dilutive
ordinary shares. Such potentially dilutive ordinary shares comprise
share options and awards granted to employees where the exercise
price is less than the average market price of the Company's
ordinary shares during the period and any unvested shares which
have met, or are expected to meet, the performance conditions at
the end of the reporting period.
Six months Six months
ended ended
30 June 2022 30 June 2021
(unaudited) (unaudited)
----------------------- --- -------------- ---------------
Basic EPS 2.5p 1.3p
Diluted EPS 2.5p 1.3p
Adjusted basic EPS* 14.1p 7.2p
Adjusted diluted EPS* 14.0p 7.1p
---------------------------- -------------- ---------------
* During the period ended 30 June 2022, share-based payment
charges and employer tax contributions thereon have been included
in adjusting items. The prior period has been re-presented to be in
line with the current period.
Notes to the condensed consolidated interim financial statements
(continued )
For the six month period ended 30 June 2022
7. Notes to the cash flow statement
Six months
Six months ended
ended 30 June 2021
30 June 2022 (unaudited) (unaudited)
GBPm GBPm
-------------------------------------------------------------------- --- -------------------------- ---------------
Operating profit for the period 9.3 10.3
Adjustments for:
Depreciation of property, plant and equipment 6.9 4.6
Depreciation of right-of-use assets 4.8 4.2
Amortisation of intangible assets 13.7 10.5
Loss on disposal of right of use assets 0.6 0.3
Derivative financial instruments at fair value through profit or loss 0.2 (0.2)
Research and development expenditure credit (0.9) (0.7)
Share-based payments charge 12.0 6.3
Unrealised currency translation (gains) / losses (0.8) 0.6
------------------------------------------------------------------------- -------------------------- ---------------
Operating cash flows before movements in working capital 45.8 35.9
Decrease / (increase) in inventories 2.9 (3.3)
(Increase) / decrease in receivables (12.5) 1.0
(Decrease) / increase in payables (2.9) 9.9
------------------------------------------------------------------------- -------------------------- ---------------
Cash generated from operations 33.3 43.5
------------------------------------------------------------------------- -------------------------- ---------------
8. 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; accordingly, they should be read
in conjunction with the Group's financial statements for the period
ended 31 December 2021. There have been no changes to the risk
management policies since the period ended 31 December 2021.
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).
Notes to the condensed consolidated interim financial statements
(continued )
For the six month period ended 30 June 2022
8. Financial instruments and risk management (continued)
The following table presents the Group's assets and liabilities
carried at fair value by valuation method.
Level 1 Level 2 Level 3 Total
30 June 2022 GBPm GBPm GBPm GBPm
---------------------------------- -------- -------- -------- ------
Assets
Derivative financial instruments - 0.3 - 0.3
Investments 0.8 - 2.5 3.3
---------------------------------- -------- -------- -------- ------
Total assets 0.8 0.3 2.5 3.6
---------------------------------- -------- -------- -------- ------
Liabilities
Derivative financial instruments - (0.9) - (0.9)
Total liabilities - (0.9) - (0.9)
---------------------------------- -------- -------- -------- ------
Level 1 Level 2 Level 3 Total
30 June 2021 GBPm GBPm GBPm GBPm
---------------------------------- -------- -------- -------- ------
Assets
Derivative financial instruments - 0.6 - 0.6
Investments 1.3 - 2.2 3.5
---------------------------------- -------- -------- -------- ------
Total assets 1.3 0.6 2.2 4.1
---------------------------------- -------- -------- -------- ------
Liabilities
Derivative financial instruments - (0.1) - (0.1)
Total liabilities - (0.1) - (0.1)
---------------------------------- -------- -------- -------- ------
There were no transfers between levels during the period.
The Group's Level 2 financial instruments consist of forward
foreign exchange contracts fair valued using forward exchange rates
that are quoted in an active market.
The Group continues to generate significant amounts of US
Dollars, Euros, Japanese Yen and Chinese Renminbi in excess of
payments in these currencies and has hedging arrangements in place
to reduce its exposure to currency fluctuations.
The following table details the forward contracts outstanding as
at the period end:
US Dollars Euros Japanese Chinese Renminbi
Yen
----------------
Sell Average Sell Average Sell Average Sell Average
Maturing in $m rate EURm rate Yenm rate Yenm rate
----- -------- ------ -------- ------ -------- -------- ---------
Year ending 31 December
2022 6.3 1.29 16.9 1.17 713 155.4 64.1 8.6
Year ending 31 December
2023 2.4 1.24 6.6 1.16 330 158.7 18.0 8.4
------------------------- ----- -------- ------ -------- ------ -------- -------- ---------
The Group's Level 3 financial instruments consist of unlisted
equity shares.
The fair value of the unquoted equity shares can be determined
as management monitors the ongoing performance of the
investment.
Notes to the condensed consolidated interim financial statements
(continued )
For the six month period ended 30 June 2022
9. Goodwill
As at As at
As at 31 December 30 June
30 June 2021 2021
2022 (unaudited) (audited) (unaudited)
GBPm GBPm GBPm
------------------------------------------------ --- ------------------ -------------- -------------
Cost and carrying amount
At beginning of period* 364.8 195.0 184.3
Additions - 177.6 -
Transfer to assets classified as held for sale (1.6) - -
Exchange differences 34.7 (7.8) (3.3)
----------------------------------------------------- ------------------ -------------- -------------
At end of period 397.9 364.8 181.0
----------------------------------------------------- ------------------ -------------- -------------
* The beginning of the period is 1 January 2022, 30 June 2020
and 1 January 2021 respectively for the periods presented in the
table.
During the six months ended 30 June 2022, there was a cash
receipt of GBP1.2m ($1.5m) relating to a successful claim lodged in
relation to the acquisition of NKY Biotech US, Inc and its one
wholly owned subsidiary, BioVision, Inc (collectively 'BioVision').
The cash consideration for BioVision was adjustable for certain net
working capital balances, for which an estimate was provided on the
close date. Subsequent to completing the acquisition balance sheet,
it was noted that the actual net working capital balance fell short
of the estimated balance and a claim was submitted. The
corresponding adjustment to the consideration was recognised on the
balance sheet as at 31 December 2021.
There have not been any adjustments to the provisional goodwill
balance relating to BioVision in the six months ended 30 June 2022
and the goodwill balance remains provisional as at 30 June 2022.
Adjustments to either the consideration paid or the acquired net
assets may be recognised during the 12 month post acquisition
measurement period, where it has been identified that the
adjustment relates to events and circumstances prior to the
acquisition.
10. Assets held for sale
As at As at
As at 31 December 30 June
30 June 2021 2021
2022 (unaudited) (audited) (unaudited)
GBPm GBPm GBPm
--------------------------------------------------------------- ------------------ -------------- -------------
Assets classified as held for sale 18.3 - -
Liabilities associated with assets classified as held for sale (3.9) - -
14.4 - -
--------------------------------------------------------------- ------------------ -------------- -------------
Assets held for sale relate to assets and liabilities associated
with the group's Fireplex multiplex and assay business. The major
classes of assets and liabilities held for sale are Goodwill
(GBP1.6m), Intangible assets (GBP15.3m), Property, plant and
equipment (GBP0.8m), Inventory (GBP0.6m) and Deferred tax
liabilities (GBP3.9m).
11. Capital commitments
As at 30 June 2022, the Group had capital commitments of GBP7.9
m (30 June 2021: GBP8.9m) relating to the acquisition of property,
plant and equipment and intangible assets.
Risks and uncertainties
The principal risks and uncertainties which the Group faces in
the undertaking of its day-to-day operations and in pursuit of its
longer-term objectives are set out in the Annual Report and
Accounts 2021 on pages 63 to 67 and in note 4 to the consolidated
financial statements. Information on financial risk management is
set out in note 26 to the consolidated financial statements . A
copy of the Annual Report and Accounts is available on the Group's
website w ww.abcamplc.com/investors/reports-presentations/ .
The principal risks and risk profile of the Group have not
changed over the interim period and are not expected to change over
the next six months.
The principal risks remain as:
Principal risk Description and relevance
--------------------------------------------------------- -----------------------------------------------------------
1. Competition and customer The risk of competitors introducing new technologies,
channels or workarounds, strengthening
product offerings and routes to market.
--------------------------------------------------------- -----------------------------------------------------------
2. Acquisitions and integrations Risks include overvaluation of targets, failing to
identify issues or risks in due diligence
or failing to integrate acquired operations or
technologies effectively in order to realise
the benefits. There is also a risk of failure to identify
and acquire businesses which could
bring added value.
--------------------------------------------------------- -----------------------------------------------------------
3. People and resources The risk of failure to recruit and develop people at the
right rate to support Abcam's strategy,
failing to maintain an engaged and motivated workforce or
to provide the tools and resources
for employees to do their work effectively.
4. Transformation projects The risk of failure to deliver on Abcam's transformational
growth projects, including our
ongoing ERP implementation and reinvention of the digital
channel.
5. Cyber security and IT infrastructure The risk that Abcam fails to operate IT systems, software
and hardware that are sufficiently
effective, reliable and robust to support the business in
its operations, or that Abcam's
critical IT infrastructure is compromised or subject to
cyber attack.
6. Geopolitical/economic disruption and research funding The risk of unfavourable geopolitical or economic changes,
including the risk of a substantial
reduction in funding for life sciences research in one of
Abcam's significant territories
7. Business continuity The risk that a disruptive event or disaster occurs at a
key facility, impacting our ability
to serve customers.
8. Laws, regulations, legislation and compliance Failure to comply with legislation and regulation in the
markets and countries in which Abcam
operates.
9. Ethical business and CSR The risk of not meeting high standards of quality and
ethical business practice.
--------------------------------------------------------- -----------------------------------------------------------
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END
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