ABC.L Regulatory News (ABC)

14 Feb 2006 07:01

ABCAM Plc14 February 2006 For immediate release 14 February 2006 ABCAM PLC ("Abcam" or "the Company") Interim Results for the Six Months ended 31 December 2005 Cambridge, UK: Abcam plc (AIM: ABC), a rapidly growing bioscience company thatmarkets antibodies via an online catalogue, is pleased to announce its interimresults for the six months ended 31 December 2005. These are Abcam's maideninterim results as a public company, the Company having joined AIM in November2005. Highlights Sales in the half year increased 63 per cent to £8.3 million (H1 2005: £5.1m)and pre-tax profits increased 49 per cent to £2.1 million (H1 2005: £1.4m) Continued expansion of product range: 18,900 products available on the Abcamwebsite at end December 2005, up 49 per cent from 12,700 products at endDecember 2004 Significant contribution in sales and profits in the half year from US office.Intention to open new office in Japan, the world's third largest market forresearch antibodies, in 2006 Board remains confident of achieving sales of at least £18.5 million in thecurrent year Net cash of £10.8 million as at 31 December 2005 Proposed interim dividend of 0.7p a share Commenting on today's announcement, Jonathan Milner, Abcam's Chief ExecutiveOfficer, said: "Abcam has performed well since joining AIM and I am pleased toannounce a maiden interim dividend, a reflection of the Company's robustfinancial profile and commitment to shareholders. We look forward to continuingthe momentum in the Company's growth in the current half and beyond throughinitiatives including the acquisition of product lines, the development ofin-house products and the opening of a Japan office." For further information: Abcam + 44 (0) 1223 696000 Jonathan Milner, Chief Executive OfficerEddie Powell, Chief Financial Officer www.abcam.com Numis Securities + 44 (0) 20 7776 1500 Charles SpicerRichard HallNick Westlake Buchanan Communications + 44 (0) 20 7466 5000 Mark CourtMary-Jane Johnson Notes for editors About Abcam Abcam is a producer and distributor of research-grade antibodies headquarteredin Cambridge, UK, with a US office located in Cambridge, Massachusetts. Abcamwas admitted to AIM in November 2005 and trades under the ticker symbol ABC.The Company produces and distributes its own and third party produced antibodiesto academic and commercial users throughout the world with product informationprovided and ordering available through the Company's website, www.Abcam.com.The antibodies are sold almost entirely under the Abcam brandname. The Company'svision is to build the largest online antibody resource in the world while alsoensuring that the antibodies are of high quality and commercially viable. Abcamnow has an online catalogue of almost 19,000 products, most of which areantibodies, from over 170 suppliers supported by up-to-date and detailedtechnical data sheets, which are created by the Company. The Company currentlyemploys 90 staff. The Company was founded by Dr Jonathan Milner (CEO), Dr David Cleevely(Chairman) and Professor Tony Kouzarides (non-executive director) in February1998. Abcam was established with funding provided by friends and family of thefounders and business angels. Since establishment, the Company has grownsignificantly, driven by the increased availability and use of the internet andthe expansion of the Company's product base, which in part is due to the rapidgrowth in the number of protein targets derived from the human genome project.In 2004, Abcam was ranked by Deloitte as the 11th fastest growing technologycompany in Europe. In April 2005 it was awarded the Queen's Award for Enterprise. The Companyreported its first profit in the financial year ended 30 June 2003. In April2005 the Company moved its headquarters to larger premises in Cambridge, UK andits US subsidiary to larger premises in Cambridge, Massachusetts. About antibodies Antibodies are proteins produced by white blood cells in response to theintroduction of a foreign body known as an antigen. Antibodies, which have awide variety of uses in research, diagnostics and therapeutics, are used bybioscientists in research into disease and into the human genome, where they areused to mark and identify specific cells and other living matter. The number ofhuman antibodies of use in research is potentially greater than one million. CHAIRMAN'S STATEMENT Overview I am delighted to present my first report for Abcam as a public company. In thesix months to 31 December 2005, the Company has continued to progress well.Turnover increased by 63% to £8.3m (H1 2005 £5.1m) and profits before taxincreased by 49% to £2.1m (H1 2005 £1.4m), continuing the excellent progressmade over the past five years. Operational review Growth in sales in part reflected the increased number of products on thewebsite, up by 49% from 12,700 at the end of December 2004 to 18,900 at the endof December 2005. We are continuing to seek additional antibodies from third party suppliers as alarger catalogue leads to increased sales and a wider customer base to promoteour existing products. Abcam's raised profile following the listing on AIM inNovember 2005 has helped this process as a wider range of potential suppliersare willing to engage in discussions. The proportion of products in our catalogue that originate and/or are owned byAbcam is relatively small at 4%, but with a high gross margin contribution. Asa consequence, priority is being given to the in-house development of our ownproprietary product lines as well as the acquisition of products by purchasingcatalogues or companies, and increased resources are now being devoted to theseareas. These activities are important to sustain both growth and gross marginsin the long run. The funds raised on admission to AIM as well as the enhancedprofile as a public company will enable us to achieve these two objectives morerapidly. We have increased the resources we devote to these tasks and willcontinue to increase our level of investment in this area. We also expect growth to be driven through further geographical expansion. Ouroffice in Boston, Massachusetts has made a significant contribution to sales andprofit over the past two years and we are planning to increase our sales inJapan through investment in a new representative office. This we anticipatewill contribute to both growth and margins in the medium term. Japan is thethird largest market for research antibodies in the world. We are also lookingat low-cost and low-risk ways to increase sales in other parts of the worldthrough distributors and our own offices. As the Company grows, it is important that the systems and processes are able totake advantage of economies of scale, and we keep this constantly under review.In particular, at the moment we are progressing with our investment in roboticstorage and handling facilities. These new facilities will enable us to store,pick and pack stock more efficiently than the present systems, and will allow usto expand output without a corresponding growth in staff and expensiveconventional refrigeration. During the past six months we have also been gradually expanding our researchand development programme and now have thirteen staff employed compared withseven at the end of December 2004. We expect to continue to grow our in-houseactivities and to engage with third parties in order to develop new products andprocesses that will be beneficial to our customers. The market for antibodieswill not stand still and this research and development programme is important toassure the longer-term growth of the company. Abcam was successfully admitted to AIM on 3 November 2005, at which time theCompany raised £9.1m net of expenses in order to, amongst other objectives,acquire existing catalogues of antibodies from third parties and/or companieswith complementary product lines and business models. Although the time sinceadmission has been relatively short, we are working towards this goal and wewill act if and when the right opportunity presents itself. Financial review Gross margins for the period were 61.5% compared with 62.3% for the six monthsended 31 December 2004. This was a good result, against a background of oursuppliers seeking to increase prices. We continue to keep costs tightly undercontrol, and have recently negotiated improvements in shipping expenses thathave largely offset such supplier price rises to date. Our continuing strategyto offset supplier price rises is to increase the proportion of our ownantibodies in the Abcam catalogue. Cash generated during the period from operating activities was £1.4 million andour cash balances as at 31 December 2005 stood at £10.8m. Abcam generates significant surpluses in both US dollars and in euros. Ratherthan have its profits subject to the volatility of the currency markets, Abcamhas a policy to sell forward 80% of the expected surpluses at the beginning ofthe financial year. However, in view of the considerable uncertainty over themedium term strength of the dollar we additionally sold forward 70% of ourexpected surplus currencies for the financial year beginning July 2006. IFRS The results for the period ended 31 December 2005 have been produced on the samebasis as the statutory accounts at 30 June 2005. These accounts conform fullywith UK Generally Accepted Accounting Principles. Abcam will move to reportunder International Financial Reporting Standards (IFRS) for the year beginningin July 2007. Dividend policy As stated at the time of admission to AIM, in the absence of unforeseencircumstances, an interim dividend following admission will be paid in respectof the financial year ending 30 June 2006. The company intends to pay dividendseach year of an amount equal to 25% of the Company's post tax profit, subject tothe need to retain sufficient earnings for the future growth of the Group.Given these encouraging first half results, the Board has decided to pay aninterim dividend of 0.7 pence per share. The record date will be 10 March 2006,and the dividend will be paid on the 7 April 2006. The Board intends that afinal dividend for the year will be declared at the announcement of the fullyear results. Corporate governance The Board continues to give a high priority to good governance. I am verypleased to welcome Peter Keen to the Board as a non-executive director. Peterhas significant experience as a director of public and private technologycompanies and has already made a valuable contribution in guiding Abcam throughits transition into a public company. The Board is now seeking to recruit anadditional non-executive director of a similarly high calibre. Outlook Abcam is committed to providing its customers with high qualityantibodies and relevant information to allow them to conduct successfulexperiments. Trading in January has continued in line with our expectations andwe remain confident that the listing on AIM will enable Abcam to invest in itsstated long-term growth strategy, specifically: Further expansion of the antibody catalogue; Increasing the proportion of its own antibodies in that catalogue through inhouse development and through product and/or company acquisition; Geographicalexpansion; Improved operational efficiency; and Research and development leadingto new products and processes relevant to our core market. In the admission document published in October 2005, the Board stated that thisstrategy should result in sales for the year ended 30 June 2006 being no lessthan £18.5 million. Based on current trading conditions and assuming continuedprogress in the implementation of this strategy, the Board remains confidentthat this target can be achieved. We would like to take this opportunity to thank all our staff, customers,suppliers and shareholders for this continuing success and their enthusiasm anddedication to Abcam over the period and in the future. David CleevelyChairman13 February 2006 Company registration No. 3509322 INDEPENDENT REVIEW REPORT TO ABCAM PLC Introduction We have been instructed by the company to review the financial information forthe six months ended 31 December 2005 which comprises the profit and lossaccount, the statement of total recognised gains and losses, the balance sheet,the cash flow statement and related notes 1 to 6. We have read the otherinformation contained in the interim report and considered whether it containsany apparent misstatements or material inconsistencies with the financialinformation. This report is made solely to the company, in accordance with Bulletin 1999/4issued by the Auditing Practices Board. Our work has been undertaken so that wemight state to the company those matters we are required to state to them in anindependent review report and for no other purpose. To the fullest extentpermitted by law, we do not accept or assume responsibility to anyone other thanthe company, for our review work, for this report, or for the conclusions wehave formed. Directors' responsibilities The interim report, including the financial information contained therein, isthe responsibility of, and has been approved by, the directors. The directorsare also responsible for ensuring that the accounting policies and presentationapplied to the interim figures are consistent with those applied in preparingthe preceding annual accounts except where any changes, and the reasons forthem, are disclosed. Review work performed We conducted our review in accordance with the guidance contained in Bulletin1999/4 issued by the Auditing Practices Board for use in the United Kingdom. Areview consists principally of making enquiries of group management and applyinganalytical procedures to the financial information and underlying financial dataand, based thereon, assessing whether the accounting policies and presentationhave been consistently applied unless otherwise disclosed. A review excludesaudit procedures such as tests of controls and verification of assets,liabilities and transactions. It is substantially less in scope than an auditperformed in accordance with International Standards on Auditing (UK andIreland) and therefore provides a lower level of assurance than an audit.Accordingly, we do not express an audit opinion on the financial information. Review conclusion On the basis of our review we are not aware of any material modifications thatshould be made to the financial information as presented for the six monthsended 31 December 2005. Deloitte & Touche LLPChartered AccountantsCambridge, England13 February 2006 ABCAM PLC CONSOLIDATED PROFIT AND LOSS ACCOUNTSix months ended 31 December 2005 Six months Six months Year ended ended ended 31.12.05 31.12.04 30.6.05 Unaudited Unaudited Audited Note £000's £000's £000's TURNOVER 8,287 5,090 12,135Cost of sales (3,188) (1,918) (4,678)Gross profit 5,099 3,172 7,457 Administrative expenses (3,145) (1,820) (4,554) 1,954 1,352 2,903Other operating income 12 - 15OPERATING PROFIT 1,966 1,352 2,918 Interest receivable and similar income 90 28 59PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION 2,056 1,380 2,977Tax on profit on ordinary activities (515) (325) (696) PROFIT ON ORDINARY ACTIVITIES AFTER TAXATION 1,541 1,055 2,281 Dividends paid (912) (623) (1,317) RETAINED PROFIT FOR THE PERIOD TRANSFERRED TO RESERVES 2 629 432 964 STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSESSix months ended 31 December 2005 Six months Six months Year ended ended ended 31.12.05 31.12.04 30.6.05 Unaudited Unaudited Audited Note £000's £000's £000's Profit 1,541 1,055 2,281 Foreign exchange differences 2 8 (7) 12 Total recognised gains and losses 1,549 1,048 2,293 EARNINGS PER SHARE Basic earnings per share 1 5.13p 4.09p 8.60p Fully diluted earnings per share 1 4.99p 3.99p 8.49p ABCAM PLCCONSOLIDATED BALANCE SHEET31 December 2005 31.12.05 31.12.04 30.6.05 Unaudited Unaudited Audited Note £000's £000's £000'sFIXED ASSETSTangible assets 927 241 835CURRENT ASSETSStocks 1,678 882 1,187Debtors 2,205 1,172 1,912Investment: cash deposit 8,112 1,450 1,000Cash at bank and in hand 2,666 399 510 14,661 3,903 4,609CREDITORS: amounts falling due within one year (2,345) (1,542) (2,149) NET CURRENT ASSETS 12,316 2,361 2,460 TOTAL ASSETS LESS CURRENT LIABILITIES 13,243 2,602 3,295 Provisions for liabilities and charges (74) (1) (80) NET ASSETS 13,169 2,601 3,215 CAPITAL AND RESERVESCalled up share capital 2 344 27 28Share premium account 2 10,569 1,501 1,568Foreign exchange reserve 2 23 (3) 15Other reserves 2 16 335 335Profit and loss account 2 2,217 741 1,269 TOTAL EQUITY SHAREHOLDERS' FUNDS 13,169 2,601 3,215 ABCAM PLCCONSOLIDATED CASH FLOW STATEMENTSix months ended 31 December 2005 Six months Six months Year ended ended ended 31.12.05 31.12.04 30.6.05 Unaudited Unaudited Audited Note £000's £000's £000's Net cash inflow from operating activities 3 1,405 962 2,588 Returns on investments and servicing of finance Interest received 90 28 59 Corporation tax paid (381) (23) (700) Capital expenditure and financial investments Payments to acquire tangible fixed assets (259) (118) (847) Receipts from sales of tangible fixed assets 4 - 22 Net cash (outflow)/inflow from capital expenditure and (255) (118) (825)financial investment Equity dividends paid (912) (623) (1,317) Net cash outflow before use of liquid resources and (53) 226 (195)financing Management of liquid resources Increase in short term deposits (7,112) (600) (150) Issue of ordinary share capital 9,317 502 570 Increase in cash 2,152 128 225 ABCAM PLCNOTES TO THE ACCOUNTSSix months ended 31 December 2005 1 EARNINGS PER SHARE Basic earnings per share is calculated by dividing the profit after tax for the period by the weightedaverage number of shares in issue during the period as adjusted for the bonus issue of shares. The calculations for the periods are: Six Six months months Year ended ended ended 31.12.05 31.12.04 30.6.05 Unaudited Unaudited Audited Profit after tax £000's 1,541 1,055 2,281 Weighted average number of shares in issue 30,018,707 25,786,756 26,516,312 Basic earnings per share 5.13p 4.09p 8.60p Diluted earnings per share is calculated by dividing the profit after tax for the period by theweighted average number of shares in issue during the period as adjusted for the bonus issue of sharesbut also taking into account any shares that the company could be called on to issue under the group'sshare option schemes to the extent that they are diluted. Fully diluted weighted average number of 30,915,181 26,459,606 26,870,219 shares Fully diluted earnings per share 4.99p 3.99p 8.49p ABCAM PLC NOTES TO THE ACCOUNTS Six months ended 31 December 2005 2 MOVEMENT IN SHARE CAPITAL AND RESERVES FOR THE GROUP Reserve Share Share Foreign for share Profit capital premium exchange options and loss account reserve granted account Unaudited Unaudited Unaudited Unaudited Unaudited £000's £000's £000's £000's £000's As at 1 July 2005 28 1,568 15 335 1,269 Profit for the six months 629 Currency translation difference on foreign currency net investments 8 Transfer in respect of share options exercised or cancelled (319) 319 Shares issued 316 9,001 At 31 December 2005 344 10,569 23 16 2,217 3 RECONCILIATION OF OPERATING PROFIT TO NET CASH INFLOW FROM OPERATIONAL ACTIVITIES Six months Six months Year ended ended ended 31.12.05 31.12.04 30.6.05 Unaudited Unaudited Audited £000's £000's £000's Operating profit 1,966 1,352 2,918 Depreciation 172 52 153 Charge in respect of share options granted - 17 17 (Profit)/loss on sale of tangible fixed assets (4) - 12 Increase in stocks (491) (324) (629) Increase in debtors (293) (171) (911) Increase in creditors 55 36 1,028 Net cash inflow from operating activities 1,405 962 2,588 4 ANALYSIS OF NET FUNDS At Cash flow Exchange At 01.07.05 movement 31.12.05 £000's £000's £000's £000's Cash in hand and at bank 510 2,152 4 2,666 Current asset investments 1,000 7,112 - 8,112 Total 1,510 9,264 4 10,778 5 RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET FUNDS Six months Six months Six months Six months ended ended ended ended 31.12.05 31.12.05 31.12.04 31.12.04 Unaudited Unaudited Unaudited Unaudited £000's £000's £000's £000's Increase in cash in the period 2,152 128 Cash inflow from increase in liquid 7,112 600 resources Change in net funds resulting from cash 9,264 728 flows Translation difference 4 (3) Movement in net funds in the period 9,268 725 Net funds at start of period 1,510 1,124 Net funds at end of period 10,778 1,849 6 BASIS OF PREPARATION This interim financial information does not constitute statutory financial statements within the meaning of section 240 of the Companies Act 1985. The financial information for the six months ended 31 December 2005 and 31 December 2004 has not been audited. The information relating to the year ended 30 June 2005 is an extract from the audited financial statements for that year on which the auditors gave an unqualified audit report and which did not contain a statement under s237(2) of the Companies Act 1985. A copy of those financial statements has been filed with the Registrar of Companies. This information is provided by RNS The company news service from the London Stock Exchange