(Alliance News) - Abcam PLC on Monday posted a decline in annual profit, pushed down by a sizeable impairment on historical costs associated with its Oracle Cloud Enterprise Resource Planning programme.
Shares in the life science research software firm were down 9.3% at 1,125.00 pence in London in morning trade.
Pretax profit for the financial year ended June 30 was GBP56.4 million, down 18% from GBP69.1 million the year before. This was attributed to a GBP12.8 million non-cash impairment charge from historial Enterprise Resource Planning system costs.
"After an extensive review of business requirements and the current functionality of Oracle Cloud software as well as other best-in-class software providers, we have decided to make some changes to our approach and the software used in these areas," said Abcam.
The scope of Abcam's Oracle Cloud Enterprise Resource Planning programme was extended to integrate improvements made to the Oracle Cloud software with the enhanced front-end system.
Given the changes to "the scope and nature of the programme and the usability of historical work performed" the software development costs so far - totalling GBP12.8 million - were impaired.
Revenue rose 11% to GBP259.9 million from GBP233.2 million. Looking ahead, Abcam is forecasting between GBP288 million and GBP294 million of revenue for financial 2020, equivalent to between 9% and 11% growth at constant currency.
The adjusted operating profit margin is predicted to be between 25% and 28% due to scaling and growth investments, having been 32% in financial 2019 and 35% in financial 2018. Capital expenditure is likely to be GBP30 million to GBP50 million.
The company has proposed a final 8.58 pence per share dividend, which would lift the total for Abcam's financial year by 1.1% to 12.13p per share from 12.00p per share.
Chief Executive Alan Hirzel said: "Our dedication to customer needs, team performance and our long-term investment perspective has helped Abcam to achieve sustained growth and expand its reach and influence over the last five years. Today, we are in a better position than ever before to pursue opportunities to continue to invest in, build and grow a successful global company.
"We are reassured that there is more to do and excited about the future prospects for our industry and our business. We are eager to enter a new phase of growth in the coming five years to extend further our impact on research discovery and clinical applications to improve patient lives."
