REG - ABCAM Plc - Interim Results
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RNS Number : 2694I
ABCAM Plc
09 March 2010
For immediate release
9 March 2010
ABCAM PLC
("Abcam" or "the Company")
Interim Results for the Six Months ended 31 December 2009
Cambridge, UK: Abcam plc (AIM: ABC), the rapidly growing bioscience company
which markets antibodies via its own online catalogue, is pleased to
announce its interim results for the six months ended 31 December 2009.
Highlights
· Sales in the half year increased 37.8% to £31.8m (H1 2009:
£23.1m), representing an increase of 25.3% on a constant currency basis.
· Pre-tax profits increased 64.0% to £11.2m (H1 2009: £6.8m).
· Catalogue expanded by 21.1% to 57,960 products (31 December 2008:
47,870).
· Net cash at 31 December 2009 was £33.0m (31 December 2008:
£20.9m) with cash generation of 98.9%.
· Basic EPS increased by 63.1% to 23.29p per share (H1 2009:
14.28p).
· Doubling of interim dividend to 5.42p per share (H1 2009: 2.71p),
payable 1 April 2010, reflecting the desire to pay a higher proportion of
the full year dividend at the interim stage.
Commenting on today's interim results Jonathan Milner, Chief Executive
Officer, said:
"The demand for products, such as antibodies, in the rapidly expanding
protein detection and regulation markets continues apace and Abcam is well
positioned to capitalise on its expertise in these areas. I am pleased to
report that trading so far in the second half of the financial year has been
in line with expectations. This is encouraging, although it is still too
early to assess what impact if any there will be on our trading as
governments and companies across the world deal with the legacy of the
recession."
For further information please contact:
Abcam + 44 (0)1223 696000
Jonathan Milner, Chief Executive Officer
Jeff Iliffe, Chief Financial Officer
www.abcam.com
Numis Securities + 44 (0) 20 7260 1000
Michael Meade / Nick Westlake - Nominated Adviser
James Black - Corporate Broking
Buchanan Communications + 44 (0) 20 7466 5000
Mark Court / Stasa Filiplic
Notes for editors
About Abcam plc
Abcam is a producer and distributor of research-grade antibodies
headquartered in Cambridge, United Kingdom, with subsidiaries in Cambridge,
Massachusetts, Tokyo and Hong Kong. Abcam was admitted to AIM in November
2005 and trades under the ticker symbol ABC. The Company produces and
distributes its own and third-party produced antibodies and related products
to academic and commercial users throughout the world. Product ordering is
available through the Company's website www.abcam.com, where customers are
also able to access up-to-date and detailed technical product data sheets.
All the antibodies are sold under the Abcam brand name. Abcam's mission is
to develop the largest catalogue of the best antibodies in the world, with
the vision of becoming a global leader in the wider protein detection and
regulation markets. Abcam now has a rapidly growing online catalogue and as
at 31 December 2009 it contained 57,960 products, most of which are
antibodies, from over 250 suppliers. Abcam employs 250 staff in its four
operating companies.
About antibodies
Antibodies are proteins produced by white blood cells in response to the
introduction of a foreign body known as an antigen. Antibodies, which have a
wide variety of uses in research, diagnostics and therapeutics, are used by
bioscientists in research into disease and into the human genome, where they
are used to mark and identify specific cells and other living matter. The
number of human antibodies of use in research is potentially greater than
one million.
INTERIM MANAGEMENT REPORT
Overview
We are pleased to report on an excellent set of results for the six months
ended 31 December 2009. There was an overall increase in sales of 37.8% to
£31.8m (H1 2009: £23.1m). This was aided by a positive contribution from
the relative weakness of sterling over the corresponding period last year,
without which the underlying sales growth was still a very strong 25.3%. The
continuation of tight cost control and our ongoing drive for operational
efficiency contributed to an increase of 64.0% in profit before tax to
£11.2m (H1 2009: £6.8m).
Operational and financial review
Our superior business model and strong focus on its execution enables us to
offer an extensive range of well characterised, high quality products. Their
relevance to researchers across the globe has allowed us to continue to take
market share in all regions.
Sales in North America grew by 20.2% to $22.8m or £13.9m (H1 2009: $19.0m
or £10.6m). This is one of our more mature markets, but nevertheless we
have continued to see growth as we gain market share and deepen our account
penetration.
Growth in local currency sales in Europe was 22.1% to €10.4m or £9.2m (H1
2009: €8.5m or £6.8m). We continue to see growth in our largest markets
in Germany and France but are also significantly increasing penetration in
southern Europe, noticeably Spain and Italy.
The calendar year 2009 was the first full year in which all sales from our
Japanese office were made directly to sub-dealers, having made approximately
50% of sales through our original distributor in 2008. This switch has been
extremely successful, enabling us to be in closer communication with the
local distribution network, which is a key element of our marketing
approach. Consequently local sales were both 61.2% higher than the
corresponding period last year at ¥441m or £2.9m (H1 2009: ¥273m or
£1.5m) and made at enhanced margins.
In July 2009 we opened a sales and marketing office in Hong Kong to serve
the Chinese market. With local management, we have begun building a network
of distributors in key regions and planning our strategy to improve the
service levels we are able to offer Chinese researchers. China is currently
our fastest growing market, with sales to China and Hong Kong increasing by
87.0% over the comparative period to HK$16.5m or £1.3m (H1 2009: HK$8.8m or
£0.6m) representing 4.1% of Group sales (H1 2009: 2.8%).
Sales to the Rest of the World were 27.1% higher at $3.0m or £1.9m (H1 2009
$2.4m or £1.3m), driven by strong growth in Asia. We plan to continue to
develop our distribution strategy by transferring responsibility for the
management of our local distributors in Korea, Taiwan and Singapore to our
new Hong Kong operation. This should enable us to improve customer service
in those regions and strengthen our market presence.
Sales in the UK grew by 13.3% to £2.5m representing 8.0% of Group revenue.
This is a satisfactory result given that the UK is seeing research funding
pressures, notably in those areas such as cancer research, that are
supported by charitable donations.
Gross margins for the period were 66.2% against 64.9% for the same period
last year. Increases came primarily from improvements in pricing and product
mix and a one off benefit which added a percentage point coming from our
exclusive in-licensing deals.
Expenses in the period were £9.9m, an increase of 16.8% over the previous
year. As a percentage of sales, expenses fell by 5.7 percentage points in
the six months to 31 December 2009 to 31.2% (H1 2009: 36.9%), assisted by
the relative weakness of sterling since a relatively high proportion of our
expenses are sterling denominated. On a constant currency basis, excluding
gains on translation of foreign currency balances which are covered below,
expenses increased by approximately £1.5m or 17.7%. This was primarily due
to an increase in staff-related costs, the full year effect of which will
have a larger impact in the second half of the year as the Company invests
for growth. Higher manufacturing recoveries helped offset other net cost
increases.
The net effect on the income statement of the retranslation of foreign
currency denominated assets and liabilities and the impact of contracts for
the forward selling of currency was a gain of £0.4m in the period (H1 2009:
£0.2m), which is included within administration and management expenses.
In the 12 months ended 31 December 2009, the number of products in our
catalogue has grown by 21.1% to 57,960. It is also encouraging to note that
during that time the number of protein targets covered has increased by
23.2%. Within these figures we have continued to grow our portfolio of
bioactive proteins, enzymes and peptides, which are also used by scientists
undertaking protein detection. We continue to work closely with and add to
our supplier base, and have a good pipeline of potential additions to the
catalogue.
There has been a focus in the period on increasing antibody production, both
of existing products for inventory and the development of new products. The
result has been record production levels and improved efficiencies. Our
production facility also spearheaded our drive to add to the
characterisation information of our products, which made strong progress in
the half year.
Our world leading conferences are an excellent forum for staying close to
key leaders in research and they continue to attract huge interest; our next
conference will see a record number of attendees for a single event. As well
as arranging conferences around the world to maintain our profile, we also
continue to develop our in-house market survey capability to enable us to
follow market trends closely and incorporate its detailed findings into our
marketing strategy.
The Group's cash flow continues to be strong, with net cash generated from
operating activities of £10.5m (H1 2009: £7.1m excluding the receipt of
£1.1m on the signing of a lease in December 2008) and a cash conversion
ratio of 98.9%. A total of £0.4m was spent in the period on capital
equipment.
Basic earnings per share (EPS) were 23.29p (H1 2009: 14.28p). The EPS for H1
2010 uses the weighted average of 35.6m shares (H1 2009: 35.2m).
Currency exposure
In the six months under review sales and profitability benefited from the
weakness of sterling over the same period last year. Current exchange rates
mean that it is possible that sterling will be relatively stronger for the
second half than was the case last year, and that at least some of the
benefit from comparative exchange rates may be reversed. Notably, the
weighted average exchange rates applied to sales in the second half of last
financial year were £1 : $1.461 and €1.092.
The Group continues to generate significant amounts of US dollars, euros and
Japanese yen in excess of payments in these currencies, and has arrangements
in place to reduce its exposure to currency fluctuations, details of which
are set out in the notes to the Consolidated Balance Sheet below.
Dividend
The Company's Directors are pleased to declare a doubling of the interim
dividend to 5.42p per share (H1 2009: 2.71p). In the 2009 financial year the
percentage of annual post tax profit distributed as dividend was increased
to 35%. This increase in the interim dividend continues the process of
addressing what we believe to be an undue weighting towards the final
dividend and should not be seen as impacting on the overall distribution
percentage, which will be kept under review.
The dividend is payable on 1 April 2010 to shareholders whose names are on
the Register of Members at close of business on 19 March 2010.
Outlook
In addition to the strength of the Company's business model and brand, our
results continue to demonstrate the resilience of the specialist area of
research antibodies in which we operate. Trading so far in the second half
of the financial year is in line with our expectations. This is encouraging,
although it is still too early to assess what impact if any there will be on
our trading as governments and companies across the world deal with the
legacy of the recession.
Our strategy is to continue to focus on sourcing high quality,
scientifically relevant products. We do this by working with leading
suppliers and establishing ever closer relationships with researchers. We
aim to operate on a global basis by being well placed to access new markets
and, through targeted marketing, to penetrate further the markets we
currently serve. The demand for products such as antibodies in the protein
detection and regulation markets continues apace and Abcam is well
positioned to capitalise on its expertise in these areas.
Abcam's success emanates from our employees and our thanks go to them for
the tremendous knowledge and enthusiasm they bring to the Company, which
sets it apart. Thanks also go to our shareholders, customers and suppliers,
who continue to support us so effectively.
Michael Redmond Jonathan Milner
Chairman Chief Executive Officer
8 March 2010 8 March 2010
RESPONSIBILITY STATEMENT
We confirm to the best of our knowledge:
· the condensed set of financial statements has been prepared in
accordance with IAS 34 "Interim Financial Reporting";
· the Interim Management Report includes a fair review of the
information required by DTR 4.2.7R, being an indication of important events
that have occurred during the first six months of the financial year and
their impact on the condensed set of financial statements; and a description
of the principal risks and uncertainties for the remaining six months of the
year; and
· the Interim Management Report includes a fair review of the
information required by DTR 4.2.8R, being related party transactions that
have taken place in the first six months of the current financial year and
that have materially affected the financial position or performance of the
entity during the period; and also any changes in the related party
transactions described in the last annual report that could do so.
By order of the Board,
Mike Redmond Jeff Iliffe
Chairman Chief Financial Officer
8 March 2010 8 March 2010
INDEPENDENT REVIEW REPORT
For the six months ended 31 December 2009
We have been engaged by the Company to review the condensed set of financial
statements in the half-yearly financial report for the six months ended 31
December 2009 which comprises the condensed consolidated income statement,
the condensed consolidated statement of comprehensive income, the condensed
consolidated balance sheet, the condensed consolidated statement of changes
in equity, the condensed consolidated cash flow statement and related notes
1 to 11. We have read the other information contained in the half-yearly
financial report and considered whether it contains any apparent
misstatements or material inconsistencies with the information in the
condensed set of financial statements.
This report is made solely to the Company in accordance with International
Standard on Review Engagements (UK and Ireland) 2410 "Review of Interim
Financial Information Performed by the Independent Auditor of the Entity"
issued by the Auditing Practices Board. Our work has been undertaken so
that we might state to the Company those matters we are required to state to
them in an independent review report and for no other purpose. To the
fullest extent permitted by law, we do not accept or assume responsibility
to anyone other than the Company, for our review work, for this report, or
for the conclusions we have formed.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and has been
approved by, the Directors. The Directors are responsible for preparing
the half-yearly financial report in accordance with the AIM Rules of the
London Stock Exchange.
As disclosed in the notes, the annual financial statements of the Group are
prepared in accordance with IFRSs as adopted by the European Union. The
condensed set of financial statements included in this half-yearly financial
report has been prepared in accordance with International Accounting
Standard 34, "Interim Financial Reporting", as adopted by the European
Union.
Our responsibility
Our responsibility is to express to the Company a conclusion on the
condensed set of financial statements in the half-yearly financial report
based on our review.
Scope of Review
We conducted our review in accordance with International Standard on Review
Engagements (UK and Ireland) 2410 "Review of Interim Financial Information
Performed by the Independent Auditor of the Entity" issued by the Auditing
Practices Board for use in the United Kingdom. A review of interim financial
information consists of making inquiries, primarily of persons responsible
for financial and accounting matters, and applying analytical and other
review procedures. A review is substantially less in scope than an audit
conducted in accordance with International Standards on Auditing (UK and
Ireland) and consequently does not enable us to obtain assurance that we
would become aware of all significant matters that might be identified in an
audit. Accordingly, we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to
believe that the condensed set of financial statements in the half-yearly
financial report for the six months ended 31 December 2009 is not prepared,
in all material respects, in accordance with the International Accounting
Standard 34 as adopted by the European Union and the AIM Rules of the London
Stock Exchange.
Deloitte LLP
Chartered Accountants and Statutory Auditors
Cambridge
8 March 2010
Condensed Consolidated Income Statement
For the six months ended 31 December 2009
(Unaudited) (Unaudited) (Audited)
Six months ended Six months ended Year
ended
31 Dec 2009 31 Dec 2008 30 Jun 2009
Notes £000 £000 £000
Continuing operations
Revenue 31,807 23,074 56,801
Cost of sales (10,760) (8,103) (19,420)
Gross profit 21,047 14,971 37,381
Administration and management
expenses excluding share
based
(7,602) (7,027) (16,985)
compensation charge and
impairment of property, plant
and equipment
Share based (365) (131) (374)
compensation charge
Impairment of - - (1,074)
property, plant and
equipment
Total administration (7,967) (7,158) (18,433)
and management
expenses
Research and (1,882) (1,301) (2,986)
development expenses
excluding share based
compensation charge
Share based (88) (50) (90)
compensation charge
Total research and (1,970) (1,351) (3,076)
development expenses
Operating profit 11,110 6,462 15,872
Investment revenue 77 358 431
Profit before tax 11,187 6,820 16,303
Tax 4 (2,892) (1,792) (4,012)
Profit for the period 8,295 5,028 12,291
attributable to
shareholders
Earnings per share
from continuing
operations
Basic 5 23.29p 14.28p 34.83p
Diluted 5 22.74p 14.10p 34.17p
Condensed Consolidated Statement of Comprehensive Income
For the six months ended 31 December 2009
(Unaudited) (Unaudited) (Audited)
Six months ended Six months ended Year
ended
31 Dec 2009 31 Dec 2008 30 Jun 2009
£000 £000 £000
Profit for the period 8,295 5,028 12,291
Movements on cash flow hedges (940) (35) 1,296
Exchange differences on 24 429 245
translation of foreign
operations
Tax relating to components of 883 297 247
other comprehensive income
Other comprehensive income for (33) 691 1,788
the period
Total comprehensive income for 8,262 5,719 14,079
the period
Condensed Consolidated Balance Sheet
As at 31 December 2009
(Unaudited) (Unaudited) (Audited)
As at As at As at
31 Dec 2009 31 Dec 2008 30 Jun 2009
Note £000 £000 £000
Non-current assets
Intangible assets 641 1,102 793
Property, plant and equipment 3,146 4,547 3,541
Deferred tax asset 997 211 335
Derivative financial instruments 85 - 326
4,869 5,860 4,995
Current assets
Inventories 7,638 5,485 6,796
Trade and other receivables 6,099 5,057 6,486
Cash and cash equivalents 32,968 20,856 25,501
Derivative financial instruments 412 - 1,338
47,117 31,398 40,121
Total assets 51,986 37,258 45,116
Current liabilities
Trade and other payables (6,742) (5,816) (6,694)
Current tax liabilities (2,584) (1,469) (1,871)
Derivative financial instruments - (1,412) -
(9,326) (8,697) (8,565)
Net current assets 37,791 22,701 31,556
Non-current liabilities
Deferred creditor (68) - (83)
Total liabilities (9,394) (8,697) (8,648)
Net assets 42,592 28,561 36,468
Equity
Share capital 6 359 355 355
Share premium account 12,750 11,341 11,558
Own shares (719) (315) (301)
Translation reserve 216 396 197
Share based compensation reserve 1,418 656 962
Hedging reserve 256 (35) 933
Deferred tax reserve 1,990 1,055 1,368
Retained earnings 26,322 15,108 21,396
Total equity attributable to 42,592 28,561 36,468
shareholders
Condensed Consolidated Statement of Changes in Equity
For the six months ended 31 December 2009
<table cellspacing="0" cellpadding="0" border="0" class="gu" style="width: 699px; font-size:12px;"><tbody><tr><td valign="top"></td><td valign="top"></td><td valign="top"></td><td valign="top"></td><td valign="top"></td><td valign="top">Share based </td><td valign="top"></td><td valign="top">Deferred </td><td valign="top"></td><td valign="top"></td></tr><tr><td valign="top"></td><td valign="top" > Share </td><td valign="top"> Share </td><td valign="top"> Own </td><td valign="top"> Translation </td><td valign="top"> compensation </td><td valign="top"> Hedging </td><td valign="top"> tax </td><td valign="top"> Retained </td><td valign="top" ></td></tr><tr><td valign="top"></td><td valign="top" > capital </td><td valign="top"> premium </td><td valign="top"> shares </td><td valign="top">1</td><td valign="top">2</td><td valign="top"> reserve<sup>3</sup></td><td valign="top"> reserve<sup>4</sup></td><td valign="top">earnings</td><td valign="top">Total</td></tr><tr><td valign="top"></td><td valign="top">£000</td><td valign="top">£000</td><td valign="top">£000</td><td valign="top">£000</td><td valign="top">£000</td><td valign="top">£000</td><td valign="top"> £000 </td><td valign="top" > £000 </td><td valign="top"> £000 </td></tr><tr><td valign="top" > Balance as at 1 July 2009 </td><td valign="top" > 355 </td><td valign="top" > 11,558 </td><td valign="top">(301)</td><td valign="top">197</td><td valign="top"> 962 </td><td valign="top" > 933 </td><td valign="top"> 1,368 </td><td valign="top" > 21,396 </td><td valign="top"> 36,468 </td></tr><tr><td valign="top"> Profit for the period </td><td valign="top" > - </td><td valign="top"> - </td><td valign="top"> - </td><td valign="top"> - </td><td valign="top"> - </td><td valign="top"> - </td><td valign="top"> - </td><td valign="top"> 8,295 </td><td valign="top" > 8,295 </td> </tr><tr><td valign="top"> Exchange differences on </td><td valign="top" ></td><td valign="top"></td><td valign="top"></td><td valign="top"></td><td valign="top"></td><td valign="top"></td><td valign="top"></td><td valign="top"></td><td valign="top" ></td></tr><tr><td valign="top"> translation of foreign operations </td><td valign="top" > - </td><td valign="top"> - </td><td valign="top"> - </td><td valign="top"> 19 </td><td valign="top"> 3 </td><td valign="top"> - </td><td valign="top"> 2 </td> <td valign="top"> - </td><td valign="top" > 24 </td></tr><tr><td valign="top"> Movements on cash flow hedges </td><td valign="top" > - </td><td valign="top"> - </td><td valign="top"> - </td><td valign="top"> - </td><td valign="top"> - </td><td valign="top"> (940) </td><td valign="top"> - </td><td valign="top"> - </td><td valign="top" > (940) </td></tr><tr><td valign="top" > Tax relating to components of other comprehensive income </td><td valign="top" > - </td><td valign="top" > - </td><td valign="top" > - </td><td valign="top" > - </td><td valign="top"> - </td><td valign="top" > 263 </td><td valign="top"> 620 </td><td valign="top" > - </td><td valign="top"> 883 </td></tr><tr><td valign="top"> Total comprehensive income for </td><td valign="top"></td><td valign="top"></td><td valign="top"></td><td valign="top"></td><td valign="top"></td><td valign="top"></td><td valign="top"></td><td valign="top"></td><td valign="top"></td></tr><tr><td valign="top"> the period </td><td valign="top" > - </td><td valign="top"> - </td><td valign="top"> - </td><td valign="top"> 19 </td><td valign="top"> 3 </td><td valign="top"> (677) </td><td valign="top"> 622 </td><td valign="top"> 8,295 </td><td valign="top" > 8,262 </td></tr><tr><td valign="top"> Issue of share capital </td><td valign="top" > 4 </td><td valign="top"> 1,192 </td><td valign="top"> (418) </td><td valign="top"> - </td><td valign="top"> - </td><td valign="top"> - </td><td valign="top"> - </td><td valign="top"> - </td><td valign="top" > 778 </td></tr><tr><td valign="top"> Share based compensation charge </td><td valign="top" > - </td><td valign="top"> - </td><td valign="top"> - </td><td valign="top"> - </td><td valign="top"> 453 </td><td valign="top"> - </td><td valign="top"> - </td><td valign="top"> - </td><td valign="top" > 453 </td> </tr> <tr><td valign="top" > Payment of dividends </td><td valign="top" > - </td><td valign="top" > - </td><td valign="top" > - </td><td valign="top" > - </td><td valign="top"> - </td><td valign="top" > - </td><td valign="top"> - </td><td valign="top" > (3,369) </td><td valign="top"> (3,369) </td> </tr> <tr><td valign="top" > Balance as at 31 December 2009 </td><td valign="top" > 359 </td><td valign="top" > 12,750 </td><td valign="top" > (719) </td><td valign="top" > 216 </td><td valign="top"> 1,418 </td><td valign="top" > 256 </td><td valign="top"> 1,990 </td><td valign="top" > 26,322 </td><td valign="top"> 42,592 </td> </tr> </tbody></table>
<table cellspacing="0" cellpadding="0" border="0" class="gu" style="width:706px; font-size:12px;"><tbody><tr><td valign="top" style="width: 153px;"></td><td valign="top"></td><td valign="top"></td><td valign="top"></td><td valign="top"></td><td valign="top">Share based</td><td valign="top"></td><td valign="top">Deferred</td><td valign="top"></td><td valign="top"></td></tr><tr><td valign="top" style="width: 153px;"></td><td valign="top">Share</td><td valign="top">Share</td><td valign="top">Own</td><td valign="top">Translation</td><td valign="top">compensation</td><td valign="top">Hedging</td><td valign="top">tax</td><td valign="top">Retained</td><td valign="top"></td></tr><tr><td valign="top" style="width: 153px;"></td><td valign="top">capital</td><td valign="top">premium</td><td valign="top">shares</td><td valign="top">reserve<sup>1</sup></td><td valign="top">reserve<sup>2</sup></td><td valign="top">reserve<sup>3</sup></td><td valign="top">reserve<sup>4</sup></td><td valign="top">earnings</td><td valign="top">Total</td></tr><tr><td valign="top" style="width: 153px;" class="cn"></td><td valign="top">£000</td><td valign="top">£000</td><td valign="top">£000</td><td valign="top">£000</td><td valign="top">£000</td><td valign="top">£000</td><td valign="top">£000</td><td valign="top">£000</td><td valign="top">£000</td></tr><tr><td valign="top" style="width: 153px;" class="cn">Balance as at 1 July 2008</td><td valign="top">351</td><td valign="top">10,871</td><td valign="top">-</td><td valign="top">(33)</td><td valign="top">483</td><td valign="top">-</td><td valign="top">758</td><td valign="top">11,692</td><td valign="top">24,122</td></tr><tr><td valign="top" style="width: 153px;">Profit for the period</td><td valign="top">-</td><td valign="top">-</td><td valign="top">-</td><td valign="top">-</td><td valign="top">-</td><td valign="top">-</td><td valign="top">-</td><td valign="top">5,028</td><td valign="top">5,028</td></tr><tr><td valign="top" style="width: 153px;"><p class="gv"><span class="cx">Exchange differences on</td><td valign="top"></td><td valign="top"></td><td valign="top"></td><td valign="top"></td><td valign="top"></td><td valign="top"></td><td valign="top"></td><td valign="top"></td><td valign="top"></td></tr><tr><td valign="top" style="width: 153px;">translation of foreign operations</td><td valign="top">-</td><td valign="top">-</td><td valign="top">-</td><td valign="top">429</td><td valign="top">-</td><td valign="top">-</td><td valign="top">-</td><td valign="top">-</td><td valign="top">429</td></tr><tr><td valign="top" style="width: 153px;">Movements on cash flow hedges</td><td valign="top">-</td><td valign="top">-</td><td valign="top">-</td><td valign="top">-</td><td valign="top">-</td><td valign="top">(35)</td><td valign="top">-</td><td valign="top">-</td><td valign="top">(35)</td></tr><tr><td valign="top" style="width: 153px;" class="cn">Tax relating to components ofother comprehensive income</td><td valign="top"> -</td><td valign="top"> -</td><td valign="top"> -</td><td valign="top"> -</td><td valign="top"> -</td><td valign="top"> -</td><td valign="top"> 297</td><td valign="top"> -</td><td valign="top"> 297</td></tr><tr><td valign="top" style="width: 153px;">Total comprehensive income for </td><td valign="top"></td><td valign="top"></td><td valign="top"></td><td valign="top"></td><td valign="top"></td><td valign="top"></td><td valign="top"></td><td valign="top"></td><td valign="top" class="bv"></td></tr><tr><td valign="top" style="width: 153px;">the period</td><td valign="top">-</td><td valign="top">-</td><td valign="top">-</td><td valign="top">429</td><td valign="top">-</td><td valign="top">(35)</td><td valign="top">297</td><td valign="top">5,028</td><td valign="top">5,719</td></tr><tr><td valign="top" style="width: 153px;">Issue of share capital</td><td valign="top">4</td><td valign="top">470</td><td valign="top">(315)</td><td valign="top">-</td><td valign="top">-</td><td valign="top">-</td><td valign="top">-</td><td valign="top">-</td><td valign="top">159</td></tr><tr><td valign="top" style="width: 153px;">Share based compensation charge</td><td valign="top">-</td><td valign="top">-</td><td valign="top">-</td><td valign="top">-</td><td valign="top">173</td><td valign="top">-</td><td valign="top">-</td><td valign="top">-</td><td valign="top">173</td></tr><tr><td valign="top" style="width: 153px;" class="cn">Payment of dividends</td><td valign="top">-</td><td valign="top">-</td><td valign="top">-</td><td valign="top">-</td><td valign="top">-</td><td valign="top">-</td><td valign="top">-</td><td valign="top">(1,612)</td><td valign="top">(1,612)</td></tr><tr><td valign="top" style="width: 153px;" class="cn">Balance as at 31 December 2008</td><td valign="top">355</td><td valign="top">11,341</td><td valign="top">(315)</td><td valign="top">396</td><td valign="top">656 </td><td valign="top"> (35)</td><td valign="top">1,055 </td><td valign="top">15,108</td><td valign="top">28,561</td></tr></tbody></table>
1 Exchange differences on translation of overseas operations.
2 IFRS 2 charge for fair value of share options.
3 Gains and losses recognised on cash flow hedges.
4 Portion of deferred tax asset arising on outstanding share options and
share options exercised and not taken to profit and loss in accordance with
IAS12.
Condensed Consolidated Cash Flow Statement
For the six months ended 31 December 2009
(Unaudited) (Unaudited) (Audited)
Six months ended Six months ended Year
ended
31 Dec 2009 31 Dec 2008 30 Jun 2009
Note £000 £000 £000
Net cash inflow from 7 10,508 8,165 14,812
operating activities
Investing activities
Investment income 75 358 513
Proceeds on disposal of - 16 -
property, plant and
equipment
Purchase of property, (424) (954) (1,756)
plant and equipment
Purchase of intangible (38) (223) (259)
assets
Net cash used in (387) (803) (1,502)
investing activities
Financing activities
Dividends paid (3,369) (1,612) (2,572)
Proceeds on issue of 778 159 375
shares
Decrease in short term - 1,020 1,020
deposits
Net cash used in (2,591) (433) (1,177)
financing activities
Net increase in cash and 7,530 6,929 12,133
cash equivalents
Cash and cash equivalents 25,501 13,473 13,473
at beginning of period
Effect of foreign (63) 454 (105)
exchange rates
Cash and cash equivalents 32,968 20,856 25,501
at end of period
Notes to the Interim Financial Information
For the six months ended 31 December 2009
1. General Information
The information for the year ended 30 June 2009 does not constitute
statutory accounts as defined in section 434 of the Companies Act 2006. A
copy of the statutory accounts for that year has been delivered to the
Registrar of Companies. The auditors reported on those accounts: their
report was unqualified, did not draw attention to any matters by way of
emphasis and did not contain a statement under section 498(2) or (3) of the
Companies Act 2006.
2. Accounting policies
Basis of preparation
The annual financial statements of Abcam plc are prepared in accordance with
IFRSs as adopted by the European Union. The condensed set of financial
statements included in this half-yearly financial report has been prepared
in accordance with IAS 34 "Interim Financial Reporting" as adopted by the
European Union.
Changes in accounting policy
The accounting policies adopted in the preparation of the interim condensed
consolidated financial statements are consistent with those followed in the
preparation of the Group's financial statements for the year ended 30 June
2009, except for the adoption of new standards and interpretations, noted
below. Adoption of these standards and interpretations did not have any
effect on the financial position or performance of the Group.
IAS 1 (revised): Presentation of Financial Statements
The Group has adopted IAS 1 (revised) "Presentation of Financial Statements"
during the period. The standard requires the presentation of a statement of
changes in equity as a primary statement, separate from the income statement
and statement of comprehensive income. As a result, a consolidated statement
of changes in equity has been included in the primary statements, showing
changes in each component of equity for each period presented.
IAS 34: Interim Financial Reporting
The Group has adopted IAS 34 "Interim Financial Reporting" during the
period. The standard prescribes the minimum content of an interim financial
report and the principles for recognition and measurement in financial
statements presented for an interim period. As a result, certain additional
disclosures have been made.
Risks and uncertainties
An outline of the key risks and uncertainties faced by the Group was
described in the 2009 financial statements, including cross-border trade
regulations and exposure to foreign exchange rate fluctuation, in particular
the strength of sterling relative to the US dollar, euro and Japanese yen.
It is anticipated that the risk profile will not significantly change for
the remainder of the year. Risk is an inherent part of doing business and
the strong cash position of the Group along with the underlying
profitability of the core business leads the Directors to believe that the
Group is well placed to manage business risks successfully.
Going concern
The Group's forecasts and projections, taking account of reasonably possible
changes in trading performance, support the conclusion that there is a
reasonable expectation that the Company and the Group have adequate
resources to continue in operational existence for the foreseeable future, a
period of not less than 12 months from the date of this report. Accordingly,
the going concern basis has been adopted in preparing the half-yearly
financial statements.
3. Operating segments
The Group has only one reportable segment, which is 'sales of antibodies and
related products'. There has been no change in the basis of segmentation or
the basis of measurement of segment profit or loss since the last annual
financial statements. The Group's revenue and assets for its one reportable
segment can be determined by reference to the Group's income statement and
balance sheet.
The Group has no individual product or customer which comprises more than
10% of its revenues.
Sales of antibodies are traditionally more heavily weighted towards the
second half of the year.
4. Income tax
The major components of income tax expense in the income statement are as
follows:
(Unaudited) (Unaudited) (Audited)
Six months ended Six months ended Year
ended
31 Dec 2009 31 Dec 2008 30 Jun 2009
£000 £000 £000
Current tax 3,087 1,877 4,539
Deferred tax (195) (85) (527)
2,892 1,792 4,012
Corporation tax for the six month period is charged at 25.9% (six months
ended 31 December 2008: 26.3%; year ended 30 June 2009: 24.6%), representing
the best estimate of the average annual effective tax rate expected for the
full year, applied to the pre-tax income of the six month period. This
effective tax rate reflects the receipt of R&D tax credits that result in a
tax deduction for the Company.
5. Earnings per share
The calculation of basic and diluted earnings per share is based upon the
following data:
(Unaudited) (Unaudited) (Audited)
Six months ended Six months ended Year
ended
31 Dec 2009 31 Dec 2008 30 Jun 2009
£000 £000 £000
Earnings
Earnings for the purposes of
basic and diluted earnings per
share
  being net profit 8,295 5,028 12,291
attributable to equity holders
of the parent
Number of shares
Weighted average number of
ordinary shares for the
purposes of basic earnings per
share
35,619,900 35,205,255 35,287,943
Effect of dilutive potential
ordinary shares:
 Share options 862,510 465,878 679,385
Weighted average number of
ordinary shares for the
purposes of diluted earnings
per share
36,482,410 35,671,133 35,967,328
Basic earnings per share is calculated by dividing the earnings attributable
to ordinary shareholders by the weighted average number of shares
outstanding during the period. Diluted earnings per share is calculated on
the same basis as basic earnings per share but with a further adjustment for
the weighted average shares in issue to reflect the effect of all dilutive
potential ordinary shares. The number of dilutive potential ordinary shares
is derived from the number of share options and awards granted to employees
where the exercise price is less than the average market price of the
Company's ordinary shares during the period.
6. Share capital
Share capital as at 31 December 2009 amounted to £358,887. During the
period, the Group issued 363,202 shares as a result of the exercise of share
options. These exercises increased the number of shares in issue from
35,525,450 to 35,888,652.
7. Notes to the cash flow statement
(Unaudited) (Unaudited) (Audited)
Six months ended Six months ended Year
Ended
31 Dec 2009 31 Dec 2008 30 Jun 2009
£000 £000 £000
Operating profit for the 11,110 6,462 15,872
period
Adjustments for:
Depreciation of property, 620 684 1,417
plant and equipment
Impairment losses on property, - - 1,074
plant and equipment
Loss on disposal of property, - - 160
plant and equipment
Amortisation of intangible 94 114 261
assets
Impairment losses on 98 - 201
intangible assets
Change in fair value of 227 1,216 (565)
derivatives outstanding at
year end
Share based compensation 453 173 464
charge
Operating cash flows before 12,602 8,649 18,884
movements in working capital
Increase in inventories (842) (979) (2,289)
Decrease/(increase) in 528 (197) (1,263)
receivables
Increase in payables 172 1,5021 2,1822
Cash generated by operations 12,460 8,975 17,514
Income taxes paid (1,952) (810) (2,702)
Net cash inflow from operating 10,508 8,165 14,812
activities
1 This increase in payables includes £1.1m received as an incentive
from the landlord of premises leased by Abcam plc with effect from December
2008.
2 This increase in payables includes £1.0m of the total balance of
£1.1m described above.
8. Related party transactions
Under a new product development agreement with a laboratory associated with
Tony Kouzarides (a non-executive Director of the Company), Abcam provided
products from its catalogue free of charge, with a resale value of £13,157
(six months ended 31 December 2008: £9,628; year ended 30 June 2009:
£24,018) and paid £21,103 in royalties (six months ended 31 December 2008:
£21,504; year ended 30 June 2009: £41,166). £6,629 relating to these
royalties was outstanding at the period end (31 December 2008: £17,368; 30
June 2009: £5,889).
Abcam Plc purchased services with a value of £31,000 (six months ended 31
December 2008: £37,050; year ended 30 June 2009: £51,050) from Cambridge
Network Limited and its subsidiaries, which are non-profit making entities
of which David Cleevely (Chairman of the Company until 2 November 2009) is
chairman. £16,712 was prepaid at the end of the year (31 December 2008:
£1,000; 30 June 2009: £7,912). These services were purchased at the market
value.
9. Dividends
(Unaudited) (Unaudited) (Audited)
Six months ended Six months ended Year
Ended
31 Dec 2009 31 Dec 2008 30 Jun 2009
£000 £000 £000
Amounts recognised as
distributions to equity
holders in the period:
Final dividend for the year 3,369 1,612 1,612
ended 30 June 2009 of 9.40p
(2008: 4.56p) per share
Interim dividend for the year - - 960
ended 30 June 2009 of 2.71p
per share
Total distributions to equity 3,369 1,612 2,572
holders in the period
Proposed interim dividend for -
the year ended 30 June 2010 of
5.42p (2008: 2.71p) per share
1,945 960 -
Proposed final dividend for - - 3,339
the year ended 30 June 2009 of
9.40p per share
The proposed interim dividend of 5.42p per share was approved by the board
on 8 March 2010 and has not been included as a liability as at 31 December
2009.
10. Foreign currency exchange rates
The Group continues to generate significant amounts of US dollars, euros and
Japanese yen in excess of payments in these currencies, and has arrangements
in place to reduce its exposure to currency fluctuations. Maturing in the
six months ending 30 June 2010 the Group has forward exchange contracts in
place to sell $8.0m, €7.8m and ¥150m at average rates of £1 to $1.50,
€1.14 and ¥157. The Group also has contracts in place maturing in the
year ending 30 June 2011 to sell $9.6m, €8.2m and ¥201m at average rates
of £1 : $1.54, €1.12 and ¥145 and for the year ending 30 June 2012 of
$1.8m, €0.9m and ¥42m at average rates of £1 : $1.57, €1.09 and ¥139.
The weighted average exchange rates applied to sales in the period were £1
: $1.636, €1.128, ¥149.6 (six months ended 31 December 2008: £1 :
$1.792, €1.256, ¥183.6). The exchange rates reported for sales in the
second half of last year were £1 : $1.461, €1.092, ¥136.9.
11. Date of approval of interim financial statements
The interim financial statements cover the period 1 July 2009 to 31 December
2009 and were approved by the Board on 8 March 2010.
Further copies of the interim financial statements are available from the
Company's registered office, 330 Cambridge Science Park, Cambridge, CB4 0FL
and can be accessed on the Abcam plc website, www.abcamplc.com.
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