ABCAM PLC: Final results for the year ended 31 December 2022
Abcam plc (Nasdaq: ABCM) reported a 15% increase in revenue for the year ended December 31, 2022, reaching £361.7 million compared to £315.4 million in 2021. In-house revenues surged by 26%, significantly contributing to an adjusted gross profit margin of 75.5%. Despite an operating loss of £10.1 million due to an impairment charge, adjusted operating profit rose by 26% to £76.3 million. The company anticipates FY2023 revenues between £420 million and £440 million, indicating a 15%-20% growth rate. Abcam aims for FY2024 revenue of £450 million to £525 million with operating margins exceeding 30%.
- Reported revenue growth of 15% to £361.7 million.
- In-house revenues, including BioVision, increased by 26%.
- Adjusted gross profit margin improved to 75.5%.
- Adjusted operating profit rose by 26% to £76.3 million.
- Return on capital employed increased to 8.9%.
- Operating loss of £10.1 million due to an £18.3 million impairment charge.
SUMMARY PERFORMANCE | Year-End 31 December | ||||
2022 £m | 2021 £m | ||||
Revenue | 361.7 | 315.4 | |||
Gross profit margin, % Adjusted gross profit margin, % | 7 | 7 | |||
Operating profit margin, % Adjusted operating profit margin, % Diluted (loss) / earnings per share ('EPS') (£) | ( (0.037) | 0.019 | |||
Adjusted diluted earnings per share ('EPS') (£) | 0.249 | 0.206 | |||
Return on Capital Employed ('ROCE'), % | 8.9 % | 7.6 % | |||
FULL YEAR FINANCIAL HIGHLIGHTS[1]
- Reported revenue growth of
15% ; constant exchange rate ('CER') revenue growth of8%
- In-house revenues, including BioVision and Custom, Products & Licensing, recorded26% reported revenue growth and18% CER revenue growth - Reported gross profit margin of
74.8% : Adjusted gross profit margin of75.5% , an increase of 330 basis points from72.2% , driven by the contribution of in-house revenues, including BioVision and Custom, Products & Licensing - Operating loss of
£10.1 million impacted by£18.3 million impairment charge on asset held for sale; adjusted operating profit increased26% to£76.3m , resulting in a 190 basis points increase of adjusted operating profit margin to21.1% - Diluted loss per share of (
£0.03 7) impacted by impairment charge on asset held for sale; adjusted diluted earnings per share increased21% to£0.24 9 - Return on capital employed increased to
8.9% , a 130-basis point improvement, favourably impacted by efficient capital utilization and higher adjusted operating profits
[1] These results include discussion of alternative performance measures which include revenues calculated at Constant Exchange Rates (CER) and adjusted financial measures. CER results are calculated by applying prior period's actual exchange rates to this period's results. Adjusted financial measures are reconciled to the most directly comparable measure prepared in accordance with IFRS in note 3 to the financial statements.
BUSINESS HIGHLIGHTS
- In-house revenues, including BioVision and Custom, Products & Licensing, represent
67% of total sales, an increase of 600 basis points
- Academic & Biopharmaceutical customers experienced double-digit percent reported revenue growth, Academic grew mid-single digits and Biopharmaceutical grew double-digit percent on a CER basis - Partnering with biopharma, diagnostic and multiplex platform partners continued to generate current and future sources of growth with the number of commercialized antibodies with these partners rising to a total of more than 2,100
- To support future growth, we've implemented an Oracle Cloud ERP system, and expanded sites in
Waltham ,Singapore , andAmsterdam - Expanded Life Science Industry experience within the Board of Directors with the appointment of
Luba Greenwood , as Non-Executive Director - Cancellation of admission to trading on AIM completed and sole Nasdaq listing as of
14 December 2022
FY23 OUTLOOK
The Company anticipates reported revenues of approximately
FY2024 GOAL
The Company is reiterating its 2024 revenue goals of
Commenting on the performance,
"Our team is dedicated to supporting life science discovery, and the translation of discovery to social impact. In the last ten years, our business has grown revenue at double digit rates because of the trust the market has in our team, our innovation, and our brand. As we look ahead, we can be confident that we have and continue to build a sustainable and profitable growth company. I am grateful to everyone at
Analyst and investor meeting and webcast:
A recording of the webcast will be made available on
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:
+ 44 (0) 1223 696 000 | |
About
As an innovator in reagents and tools,
Already a pioneer in data sharing and ecommerce in the life sciences,
Founded in 1998 and headquartered in Cambridge,
For more information, please visit www.abcam.com or www.abcamplc.com
Forward-Looking Statements
This announcement contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. In some cases, you can identify forward-looking statements by the following words: "may," "might," "will," "could," "would," "should," "expect," "plan," "anticipate," "intend," "seek," "believe," "estimate," "predict," "potential," "continue," "contemplate," "possible" or the negative of these terms or other comparable terminology, although not all forward-looking statements contain these words. They are not historical facts, nor are they guarantees of future performance. Any express or implied statements contained in this announcement that are not statements of historical fact may be deemed to be forward-looking statements, including, without limitation, statements regarding Abcam's portfolio and ambitions, and our future results of operations and financial position such as our outlook for FY2023 and performance goals for FY2024 are neither promises nor guarantees, but involve known and unknown risks and uncertainties that could cause actual results to differ materially from those projected, including, without limitation: challenges in implementing our strategies for revenue growth in light of competitive challenges; the development of new products or the enhancement of existing products, and the need to adapt to significant technological changes or respond to the introduction of new products by competitors to remain competitive; our customers discontinuing or spending less on research, development, production or other scientific endeavors; failing to successfully identify or integrate acquired businesses or assets into our operations or fully recognize the anticipated benefits of businesses or assets that we acquire; the ongoing COVID 19 pandemic, including variants, continues to affect our business, including impacts on our operations and supply chains; failing to successfully use, access and maintain information systems and implement new systems to handle our changing needs; cyber security risks and any failure to maintain the confidentiality, integrity and availability of our computer hardware, software and internet applications and related tools and functions; failing to successfully manage our current and potential future growth; any significant interruptions in our operations; our products failing to satisfy applicable quality criteria, specifications and performance standards; failing to maintain and enhance our brand and reputation; ability to react to unfavorable geopolitical or economic changes that affect life science funding; failing to deliver on transformational growth projects; our dependence upon management and highly skilled employees and our ability to attract and retain these highly skilled employees; and as a foreign private issuer, we are exempt from a number of rules under the
Use of Non-IFRS Financial Measures
To supplement our audited financial results prepared in accordance with International Financial Reporting Standards ("IFRS") we present Adjusted Operating Profit, Adjusted Operating Profit Margin, Return on Capital Employed ("ROCE"), Adjusted Diluted Earnings per Share, Total Constant Exchange Rate Revenue ("CER revenue"), Adjusted Selling, General and Administrative expenses,
Management believes that the presentation of (a) Adjusted Operating Profit, Adjusted Operating Profit Margin, ROCE, and Adjusted Diluted Earnings per Share, provide useful information to investors and others as management regularly reviews these measures as important indicators of our operating performance and makes decisions based on them, (b) CER revenue provides useful information to investors and others as management regularly reviews this measure to identify period-on-period or year-on-year performance of the business and makes decisions based on it, and (c) Adjusted Selling, General and Administrative expenses and
We define:
- Adjusted Operating Profit as profit for the period / year before taking account of finance income, finance costs, tax, exceptional items, share-based payments, and amortization of acquisition intangibles. Exceptional items consist of certain cash and non-cash items that we believe are not reflective of the normal course of our business; and we identify and determine items to be exceptional based on their nature and incidence or by or by their significance ("exceptional items"). As a result, the composition of exceptional items may vary from period to period / year to year.
- Adjusted Operating Profit Margin as adjusted operating profit calculated as a percentage of revenue.
- ROCE as Adjusted Operating Profit divided by capital employed, defined as total assets less current liabilities.
- Adjusted Diluted Earnings per Share as Adjusted Profit for the year divided by the weighted average number of ordinary shares for the purposes of diluted earnings per share. Adjusted Profit for the year used in this calculation is defined as profit for the year plus adjusting items (impairment of intangible assets, system and process improvement costs, acquisition costs, integration and reorganization costs, net of tax effects). Adjusted Diluted Earnings per Share is calculated with an adjustment to the weighted average number of shares outstanding to assume conversion of all potentially dilutive ordinary shares.
- Adjusted Selling, General and Administrative expenses as reported selling, general and administrative expenses for the year before taking account of exceptional items, share-based payments, and amortization of acquisition intangibles.
Adjusted Research & Development expenses as reported research and development expenses for the year before taking account of exceptional items, share-based payments, and amortization of acquisition intangibles.- CER as our total revenue growth from one fiscal period / year to the next on a constant exchange rate basis.
- Free Cash Flow as net cash inflow from operating activities less net capital expenditure, transfer of cash from/(to) escrow in respect of future capital expenditure and the principal and interest elements of lease obligations.
Management is unable to present quantitative reconciliations of Adjusted Operating Profit, Adjusted Operating Profit Margin, and CER revenue to their respective most directly comparable IFRS financial measures of Operating Profit, Operating Profit Margin and Reported Revenue on a forward-looking basis, because items that impact these IFRS financial measures are not within our control and/or cannot be reasonably predicted. Such information may have a significant, and potentially unpredictable, impact on our future financial results.
Year-end management report
Introduction
We are pleased with the continued progress of our business over the last 12 months and the way our people have responded to the evolving impact of COVID-19. Indeed, the challenges presented since the pandemic began over three years ago have served to highlight the resilience of both our employees and our business, as well as the role
Demand for our products, and particularly
In the year ended
Despite the recent disruptions, the opportunities for growth in our markets remain, and we are committed to our customers and their long-term success thereby driving our future growth. As we near completion of our five-year strategic plan, we thank our approximately 1,800 employees for their ongoing commitment in the delivery of our plans – they are fundamental to the Group's future success.
We continue to have a strong balance sheet (net debt of
Looking forward, with our expanding capabilities, financial position and market opportunities for growth, the Group is well-placed to sustain long-term value creation.
Financial review
Year ended 31 December | |||||||||
Reported revenues | Change in % | CER growth % | |||||||
2022 £m | 2021 £m | ||||||||
Catalogue revenue – regional split | |||||||||
Americas | 147.2 | 114.8 | 28 % | 16 % | |||||
EMEA | 87.1 | 82.3 | 6 % | 6 % | |||||
60.3 | 57.2 | 5 % | (2 %) | ||||||
Japan | 17.4 | 18.7 | (7 %) | 0 % | |||||
Rest of Asia Pacific | 27.8 | 23.4 | 19 % | 9 % | |||||
Catalogue revenue | 339.8 | 296.4 | 15 % | 8 % | |||||
CP&L revenue1 | 21.9 | 19.0 | 15 % | 5 % | |||||
Total reported revenue | 361.7 | 315.4 | 15 % | 8 % | |||||
Total revenue – product type | |||||||||
In-house | 243.9 | 193.1 | 26 % | 18 % | |||||
Third party | 117.8 | 122.3 | (4 %) | (9 %) | |||||
Total reported revenue | 361.7 | 315.4 | 15 % | 8 % | |||||
REVENUE
We recorded revenue of
Catalogue revenues:
Catalogue revenue growth by region is as follows:
Americas +16% CER / +28% Reported
- Excluding Distributors,Americas sales were driven by high-teens digit CER inBiopharma , and high-single digit CER in Academia. Excluding the estimated headwinds on revenues in 2022,Americas grew over20% CER.- EMEA +
6% CER / +6% Reported
- Excluding Distributors, EMEA sales were driven by high-teens digit CER inBiopharma , and low-single digit CER growth in Academia. Excluding the estimated headwinds on revenues in 2022, EMEA grew low teens CER. China (-2% ) CER / +5% Reported
- Excluding the estimated headwinds on revenues in 2022,China grew mid-teens digit CER.- Rest of
Asia Pacific includingJapan +5% CER / +7% Reported
- Excluding Japan which experienced flat growth (on a CER basis), rest ofAsia-Pacific grew high-single digit CER
From a served end markets basis, total catalogue sales are as follows:
- Academia +
4% CER / +11% Reported Biopharma +10% CER / +18% Reported- Distributors +
12% CER / +18% Reported
Custom, Products & Licenses revenues:
GROSS MARGIN
Reported gross profit margin of
OPERATING COSTS
Year ended 31 December | |||||
Reported | Adjusted | ||||
2022 £m | 2021 £m | 2022 £m | 2021 £m | ||
Selling, general & administrative expenses ('SG&A') | 224.5 | 189.7 | 176.3 | 150.6 | |
Research & development expenses ('R&D') | 56.1 | 27.8 | 20.6 | 16.7 | |
Total operating costs and expenses | 280.6 | 217.5 | 196.9 | 167.3 | |
Selling, general and administrative expenses
Reported selling, general and administrative expenses of
Research and development expenses
Reported research and development expenses of
On a reported basis, total reported costs were
ADJUSTING ITEMS
Total reported expenses include the following adjusting items:
£6.6 million relating to the Oracle Cloud ERP project (2021:£7.0m )£15.7 million from acquisition, integration, and reorganisation charges (2021:£13.0m )£16.9 million relating to the amortisation of acquired intangibles (2021:£9.1m )£18.3 million related to impairment charge for asset held for sale (2021: £nil)£26.2 million in charges for share-based payments (2021:£20.0m )£2.7 million relation to the amortization of fair value adjustments (2021:£3.1m )
NET PROFIT
Adjusted net profit was
CASH
As of
LOOKING AHEAD
We continue to experience good order demand across the business as market activity has largely resumed in most major geographies. Investments we have made, and that we continue to make, are enabling the business to sustain growth and we remain committed to generating revenue of
In the more immediate term, uncertainty in
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
Supported by a clear purpose and strategy, and thanks to the efforts of all our employees and partners, we believe that
Chief Executive Officer
Michael S Baldock
Chief Financial Officer
Forward-Looking Statements
This announcement contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Any express or implied statements contained in this announcement that are not statements of historical fact may be deemed to be forward-looking statements, including, without limitation, statements regarding Abcam's portfolio and ambitions, and our future results of operations and financial position such as our guidance for FY2023 and performance goals for FY2024 are neither promises nor guarantees, but involve known and unknown risks and uncertainties that could cause actual results to differ materially from those projected, including, without limitation: potential changes from unaudited management accounts, which are provisional and subject to review, to our audited financial statements; regional or global health pandemic, including the novel coronavirus ("COVID-19"), which has adversely affected elements of our business, and could severely affect our business, including due to impacts on our operations and supply chains; challenges in implementing our strategies for revenue growth in light of competitive challenges; developing new or enhancing existing products, adapting to significant technological change and responding to the introduction of new products by competitors to remain competitive; failing to successfully identify or integrate acquired businesses or assets into our operations or fully recognize the anticipated benefits of such businesses or assets; risks that our customers discontinue or spend less on research, development, production or other scientific endeavors with us; failing to successfully use, access and maintain information systems and implement new systems to handle our changing needs; cyber security risks and any failure to maintain the confidentiality, integrity and availability of our computer hardware, software and internet applications and related tools and functions; failing to successfully manage our current and potential future growth; failing to successfully increase access to the
Consolidated income statement | ||||||||
For the year ended | ||||||||
Year ended | Year ended | |||||||
Note | Adjusted £m | Adjusting £m | Total £m | Adjusted £m | Adjusting £m | Total £m | ||
Revenue | 2 | 361.7 | — | 361.7 | 315.4 | — | 315.4 | |
Cost of sales | (88.5) | (2.7) | (91.2) | (87.7) | (3.1) | (90.8) | ||
Gross profit | 273.2 | (2.7) | 270.5 | 227.7 | (3.1) | 224.6 | ||
Selling, general and administrative expenses | (176.3) | (48.2) | (224.5) | (150.6) | (39.1) | (189.7) | ||
Research and development expenses | (20.6) | (35.5) | (56.1) | (16.7) | (11.1) | (27.8) | ||
Operating profit / (loss) | 76.3 | (86.4) | (10.1) | 60.4 | (53.3) | 7.1 | ||
Finance income | 0.4 | — | 0.4 | 0.3 | — | 0.3 | ||
Finance costs | (5.9) | — | (5.9) | (2.7) | — | (2.7) | ||
Profit / (loss) before tax | 70.8 | (86.4) | (15.6) | 58.0 | (53.3) | 4.7 | ||
Tax | 5 | (13.1) | 20.2 | 7.1 | (10.8) | 10.5 | (0.3) | |
Profit / (loss) for the period / year attributable | 57.7 | (66.2) | (8.5) | 47.2 | (42.8) | 4.4 | ||
Earnings per share | ||||||||
Basic | 6 | 25.2p | (3.7)p | 20.8p | 1.9p | |||
Diluted | 6 | 24.9p | (3.7)p | 20.6p | 1.9p | |||
Adjusted figures exclude impairment of intangible assets and assets held for sale, systems and process improvement costs, acquisition costs, amortisation of fair value adjustments, integration and reorganisation costs, amortisation of acquisition intangibles, share-based payment charges and the tax effect of adjusting items. Such excluded items are described as 'adjusting items'. Further information on these items is shown in note 3.
Consolidated statement of comprehensive income | ||
For the year ended | ||
Year ended 31 December £m | Year ended 31 December £m | |
(Loss) / profit for the year attributable to equity shareholders of the parent | (8.5) | 4.4 |
Items that may be reclassified to the income statement in subsequent years | ||
Movement on cash flow hedges | (0.4) | (0.1) |
Exchange differences on translation of foreign operations | 58.6 | 5.7 |
Tax relating to components of other comprehensive income / (expense) | (1.3) | 0.1 |
Items that will not be reclassified to the income statement in subsequent years | ||
Movement in fair value of investments | (0.4) | (0.1) |
Tax relating to components of other comprehensive expense | — | 0.4 |
Other comprehensive income for the year | 56.5 | 6.0 |
Total comprehensive income for the year | 48.0 | 10.4 |
Consolidated balance sheet | ||||
As at | ||||
As at 31 December 2022 £m | As at 31 December 2021* £m | |||
Non-current assets | ||||
398.3 | 363.5 | |||
Intangible assets | 227.9 | 234.2 | ||
Property, plant and equipment | 80.5 | 73.5 | ||
Right-of-use assets | 79.2 | 88.2 | ||
Investments | 3.2 | 3.5 | ||
Deferred tax asset | 12.1 | 13.2 | ||
801.2 | 776.1 | |||
Current assets | ||||
Inventories | 68.0 | 58.2 | ||
Trade and other receivables | 84.0 | 60.5 | ||
Current tax receivable | 13.9 | 10.5 | ||
Derivative financial instruments | 0.5 | 0.5 | ||
Cash and cash equivalents | 89.0 | 95.1 | ||
255.4 | 224.8 | |||
Total assets | 1,056.6 | 1,000.9 | ||
Current liabilities | ||||
Trade and other payables | (67.8) | (69.0) | ||
Derivative financial instruments | (0.8) | (0.2) | ||
Lease liabilities | (8.5) | (9.2) | ||
Borrowings | (119.6) | (119.2) | ||
Current tax liabilities | (5.1) | (4.4) | ||
(201.8) | (202.0) | |||
Net current assets | 53.6 | 22.8 | ||
Non-current liabilities | ||||
Deferred tax liability | (32.1) | (41.5) | ||
Lease liabilities | (95.8) | (101.3) | ||
(127.9) | (142.8) | |||
Total liabilities | (329.7) | (344.8) | ||
Net assets | 726.9 | 656.1 | ||
Equity | ||||
Share capital | 0.5 | 0.5 | ||
Share premium account | 269.4 | 268.3 | ||
Merger reserve | 68.6 | 68.6 | ||
Own shares | (1.9) | (2.2) | ||
Translation reserve | 89.7 | 31.1 | ||
Hedging reserve | (0.1) | 0.2 | ||
Retained earnings | 300.7 | 289.6 | ||
Total equity attributable to the equity shareholders of the parent | 726.9 | 656.1 | ||
* See note 8 for details related to the measurement period adjustment to the accounting for the acquisition of BioVision.
Approved by the Board of directors and authorised for issue on
Consolidated statement of changes in equity | |||||||||
For the year ended | |||||||||
Share capital £m | Share premium account £m | Merger reserve £m | Own shares £m | Translation reserve £m | Hedging reserve £m | Retained earnings £m | Total £m | ||
Balance as | 0.5 | 265.1 | 68.6 | (2.4) | 25.4 | 0.2 | 271.7 | 629.1 | |
Profit for the year | — | — | — | — | — | — | 4.4 | 4.4 | |
Other comprehensive income | — | — | — | — | 5.7 | — | 0.3 | 6.0 | |
Total comprehensive income | — | — | — | — | 5.7 | — | 4.7 | 10.4 | |
Issue of ordinary shares | — | 3.2 | — | — | — | — | — | 3.2 | |
Own shares disposed of on exercise of share options | — | — | — | 0.2 | — | — | (0.2) | — | |
Share-based payments inclusive of deferred tax | — | — | — | — | — | — | 13.4 | 13.4 | |
Balance as at | 0.5 | 268.3 | 68.6 | (2.2) | 31.1 | 0.2 | 289.6 | 656.1 | |
Loss for the year | — | — | — | — | — | — | (8.5) | (8.5) | |
Other comprehensive income / (expense) | — | — | — | — | 58.6 | (0.3) | (1.8) | 56.5 | |
Total comprehensive income / (expense) | — | — | — | — | 58.6 | (0.3) | (10.3) | 48.0 | |
Issue of ordinary shares | — | 1.1 | — | — | — | — | — | 1.1 | |
Own shares disposed of on exercise of share options | — | — | — | 0.3 | — | — | (0.3) | — | |
Share-based payments inclusive of deferred tax | — | — | — | — | — | — | 21.9 | 21.9 | |
Purchase of own shares | — | — | — | — | — | — | (0.2) | (0.2) | |
Balance as at | 0.5 | 269.4 | 68.6 | (1.9) | 89.7 | (0.1) | 300.7 | 726.9 | |
Consolidated cash flow statement | ||||
For the year ended | ||||
Note | Year ended 31 December 2022 £m | Year ended 31 December 2021 £m | ||
Cash generated from operations | 7 | 36.0 | 72.2 | |
Net income taxes paid | (7.3) | (9.3) | ||
Net cash inflow from operating activities | (i) | 28.7 | 62.9 | |
Investing activities | ||||
Investment income | 0.4 | 0.3 | ||
Purchase of property, plant and equipment | (i) | (16.8) | (34.5) | |
Purchase of intangible assets | (i) | (24.5) | (25.3) | |
Transfer of cash from escrow in respect of future capital expenditure | (i) | 0.3 | — | |
Purchase of investments | — | (0.1) | ||
Reimbursement of leasehold improvement costs | (i) | — | 13.2 | |
Net cash inflow / (outflow) arising from acquisitions | 8 | 16.2 | (245.1) | |
Net cash outflow from investing activities | (24.4) | (291.5) | ||
Financing activities | ||||
Principal element of lease obligations | (i) | (11.3) | (8.8) | |
Interest element of lease obligations | (i) | (2.1) | (1.5) | |
Interest paid | (3.0) | (0.7) | ||
Proceeds on issue of shares, net of issue costs | 1.1 | 3.2 | ||
Facility arrangement fees | — | (0.8) | ||
Utilisation of revolving credit facility | — | 120.0 | ||
Purchase of own shares | (0.2) | — | ||
Net cash (outflow) / inflow from financing activities | (15.5) | 111.4 | ||
Net decrease in cash and cash equivalents | (11.2) | (117.2) | ||
Cash and cash equivalents at beginning of year | 95.1 | 211.9 | ||
Effect of foreign exchange rates | 5.1 | 0.4 | ||
Cash and cash equivalents at end of year | 89.0 | 95.1 | ||
Free cash flow | (i) | (25.7) | 6.0 | |
(i) Free cash flow comprises net cash generated from operating activities less net capital expenditure, transfer of cash from/(to) escrow in respect of future capital expenditure, and the principal and interest elements of lease obligations.
Notes to the consolidated financial statements
For the year ended
1. Presentation of the financial statements
a) Basis of preparation
The financial information, which comprises the consolidated income statement, consolidated statement of comprehensive income, consolidated balance sheet, consolidated statement of changes in equity, consolidated cash flow statement and extracts from the notes to the financial statements for the year ended
The preliminary financial information has been presented in Sterling and on the historical cost basis, except for the revaluation of certain financial instruments.
The financial information does not constitute statutory accounts within the meaning of Sections 434 to 436 of the Companies Act 2006, but are derived from those accounts. Statutory accounts for 18 month period ended
b) Adjusted performance measures
Adjusted performance measures are used by the Directors and management to monitor business performance internally and exclude certain cash and non-cash items which they believe are not reflective of the normal day-to-day operating activities of the Group. The Directors believe that disclosing such non-IFRS measures enables a reader to isolate and evaluate the impact of such items on results and allows for a fuller understanding of performance from year to year. Adjusted performance measures may not be directly comparable with other similarly titled measures used by other companies. A detailed reconciliation between reported and adjusted measures is presented in note 3.
c) Going concern
The Group meets its day-to-day working capital requirements from the cash surpluses generated as a result of normal trading. In considering going concern, the Directors have reviewed the Group's forecasts and projections, taking account of reasonably possible changes in trading performance. These show that the Group should be able to operate within the limits of its available resources.
On
Accordingly, the directors have a reasonable expectation that the Group has adequate resources to continue in operation for the foreseeable future and at least one year from the date of approval of the financial statements. For this reason, they continue to adopt the going concern basis in preparing its consolidated financial statements.
2. Operating segments
Products and services from which reportable segments derive their revenues
The Directors consider that there is only one core business activity and there are no separately identifiable business segments which are engaged in providing individual products or services or a group of related products and services which are subject to separate risks and returns. The information reported to the Group's Chief Executive Officer, who is considered the chief operating decision maker, for the purposes of resource allocation and assessment of performance is based wholly on the overall activities of the Group. The Group has therefore determined that it has only one reportable segment, which is 'sales of antibodies and related products'. The Group's revenue and assets for this one reportable segment can be determined by reference to the Group's income statement and balance sheet.
The Group has no individual product or customer which contributes more than
Geographical information
Revenues are attributed to regions based primarily on customers' location. The Group's revenue from external customers and information about its non-current segment assets (excluding deferred tax) is set out below:
Revenue | Non-current assets | |||
Year ended 31 December 2022 £m | Year ended 31 December 2021 £m | As at 31 December 2022 £m | As at 31 December 2021 £m | |
The | 162.5 | 130.4 | 483.7 | 464.3 |
EMEA | 90.1 | 84.3 | 237.0 | 231.8 |
62.9 | 58.2 | 8.0 | 8.6 | |
17.9 | 18.7 | 0.4 | 0.2 | |
Rest of | 28.3 | 23.8 | 60.0 | 59.3 |
361.7 | 315.4 | 789.1 | 764.2 | |
Revenue by type is shown below:
Year ended 31 December 2022 £m | Year ended 31 December 2021 £m | |
Catalogue revenue | 339.8 | 296.4 |
Custom products and services | 6.8 | 5.7 |
IVD | 6.1 | 6.3 |
Custom products and licensing | 9.0 | 7.0 |
21.9 | 19.0 | |
Total reported revenue | 361.7 | 315.4 |
3. Adjusted performance measures
A reconciliation of the Group's adjusted performance measures to the reported IFRS measures is presented below:
Year ended | Year ended | |||||
Adjusted £m | Adjusting £m | Total £m | Adjusted £m | Adjusting £m | Total £m | |
Cost of sales | (88.5) | (2.7) | (91.2) | (87.7) | (3.1) | (90.8) |
Gross profit | 273.2 | (2.7) | 270.5 | 227.7 | (3.1) | 224.6 |
Selling, general and administrative expenses | (176.3) | (48.2) | (224.5) | (150.6) | (39.1) | (189.7) |
Research and development expenses | (20.6) | (35.5) | (56.1) | (16.7) | (11.1) | (27.8) |
Operating profit | 76.3 | (86.4) | (10.1) | 60.4 | (53.3) | 7.1 |
Finance income | 0.4 | — | 0.4 | 0.3 | — | 0.3 |
Finance costs | (5.9) | — | (5.9) | (2.7) | — | (2.7) |
Profit / (loss) before tax | 70.8 | (86.4) | (15.6) | 58.0 | (53.3) | 4.7 |
Tax | (13.1) | 20.2 | 7.1 | (10.8) | 10.5 | (0.3) |
Profit / (loss) for the year attributable to equity shareholders | 57.7 | (66.2) | (8.5) | 47.2 | (42.8) | 4.4 |
Notes to the consolidated financial statements
For the year ended
Analysis of adjusting items:
Year ended 31 December £m | Year ended 31 December £m | ||
Amortisation of fair value adjustments | (i) | (2.7) | (3.1) |
Affecting gross profit | (2.7) | (3.1) | |
Impairment of intangible assets and asset held for sale | (ii) | (18.3) | (1.1) |
System and process improvement costs | (iii) | (6.6) | (7.0) |
Acquisition costs | (iv) | — | (8.3) |
Integration and reorganisation costs | (v) | (15.7) | (4.7) |
Amortisation of acquisition intangibles | (vi) | (16.9) | (9.1) |
Share-based payment charges | (vii) | (26.2) | (20.0) |
Affecting operating profit and profit before tax | (86.4) | (53.3) | |
Tax effect of adjusting items | 20.2 | 10.5 | |
Affecting tax | 20.2 | 10.5 | |
Total adjusting items | (66.2) | (42.8) |
(i) Comprises amortisation of fair value adjustments relating to the acquisition of
(ii) During the year ended
During the year ended
(iii) Comprises costs of the strategic ERP implementation which do not qualify for capitalisation and, for the year ended
(iv) Year ended
(v) Year ended
Year ended
(vi) Amortisation of
(vii) Comprises share-based payment charges of
Notes to the consolidated financial statements
For the year ended
4. Impairment of asset held for sale
Assets held for sale and subsequently impaired:
Impairment of assets held for sale £m | ||
Impaired assets held for sale | ||
1.6 | ||
Intangible assets | 15.8 | |
Property, plant and equipment | 0.5 | |
Inventories | 0.4 | |
Assets | 18.3 | |
Trade and other payables | (0.2) | |
Deferred tax liabilities | (4.1) | |
Liabilities | (4.3) | |
Impairment charges impacting operating profit | 18.3 | |
Release of other liabilities | (0.2) | |
Other costs associated with discontinued investment | 0.2 | |
Expenses recognised within operating profit | 18.3 | |
Release of deferred tax liabilities | (4.1) | |
Loss recognised within the income statement | 14.2 |
During the year ended
The group was not successful in locating a buyer and a decision was made by the directors, in the second half of 2022, to discontinue the group's investment in these products and technology. As such an impairment charge of
5. Taxation
Year ended £m | Year ended £m | ||
Current tax | 5.8 | 8.6 | |
Deferred tax | (12.9) | (8.3) | |
Total income tax (credit) / charge | (7.1) | 0.3 | |
Adjusted income tax charge | (i) | 13.1 | 10.5 |
(i) Adjusted income tax charge excludes the tax effects of adjusting items which are set out in note 3.
The Group reported a net tax credit of
The
The Finance Act 2021 increased the
Notes to the consolidated financial statements
For the year ended
6. Earnings per share
The calculation of the basic and diluted EPS, shown below the income statement, is based on the following data:
Year ended £m | Year ended £m | |
Earnings | ||
Profit attributable to equity shareholders of the parent – adjusted | 57.7 | 47.2 |
Adjusting items (note 3) | (66.2) | (42.8) |
(Loss) / profit attributable to equity shareholders of the parent – reported | (8.5) | 4.4 |
Million | Million | |
Number of shares | ||
Weighted average number of ordinary shares in issue | 229.0 | 227.1 |
Less ordinary shares held by | (0.3) | (0.4) |
Weighted average number of ordinary shares for the purposes of basic EPS | 228.7 | 226.7 |
Effect of potentially dilutive ordinary shares: Share options and awards | 2.6 | 2.2 |
Weighted average number of ordinary shares for the purposes of diluted EPS | 231.3 | 228.9 |
Basic EPS and adjusted EPS are calculated by dividing the earnings attributable to the equity shareholders of the parent by the weighted average number of shares outstanding during the year. Diluted EPS and adjusted EPS are calculated on the same basis as basic EPS but with a further adjustment to the weighted average number of shares outstanding to assume conversion of all potentially dilutive ordinary shares. Such potentially dilutive ordinary shares comprise share options and awards granted to employees where the exercise price is less than the average market price of the Company's ordinary shares during the year and any unvested shares which have met, or are expected to meet, the performance conditions at the end of the year.
Year ended | Year ended | |
Basic EPS | (3.7)p | 1.9p |
Diluted EPS | (3.7)p | 1.9p |
Adjusted basic EPS | 25.2p | 20.8p |
Adjusted diluted EPS | 24.9p | 20.6p |
7. Notes to the cash flow statement
Year ended £m | Year ended £m | |||
Operating profit for the year | (10.1) | 7.1 | ||
Adjustments for: | ||||
Depreciation of property, plant and equipment | 15.0 | 11.0 | ||
Depreciation of right of use assets | 11.5 | 9.1 | ||
Amortisation of intangible assets | 26.4 | 20.9 | ||
Impairment of intangible assets | 1.0 | 3.8 | ||
Impairment of asset held for sale | 18.3 | — | ||
Loss on disposal of property, plant and equipment | — | 0.5 | ||
Loss on disposal of right of use asset | 0.6 | — | ||
Derivative financial instruments at fair value through profit or loss | 0.2 | — | ||
Research and development expenditure credit | (2.0) | (2.5) | ||
Share-based payments charge | 23.3 | 17.9 | ||
Unrealised currency translation losses / (gains) | (1.3) | 0.4 | ||
Operating cash flows before movements in working capital | 82.9 | 68.2 | ||
Increase in inventories | (7.4) | (6.2) | ||
(Increase) / decrease in receivables | (33.3) | 4.0 | ||
(Decrease) / increase in payables | (6.2) | 6.2 | ||
Cash generated from operations | 36.0 | 72.2 | ||
Notes to the consolidated financial statements
For the year ended
8. Business Combinations
Year ended
No business combinations were undertaken during the period.
During the 12 month period after the BioVision acquisition was completed, several measurement period adjustments were identified for new information obtained about facts and circumstances that existed as of the acquisition date.
Following the completion of the acquisition,
In addition to the above, other liabilities totalling
As at
Year ended
On
The acquisition accelerates
The fair value of identifiable net assets acquired was as follows:
Provisional Fair £'m | Adjustment £'m | Final Fair Value £'m | |
Non-current assets | |||
Intangible assets | 80.6 | — | 80.6 |
Property, plant and equipment | 0.8 | — | 0.8 |
Right-of-use assets | 1.9 | — | 1.9 |
Deferred tax asset | 0.3 | 2.7 | 3.0 |
Current assets | |||
Inventory | 8.1 | — | 8.1 |
Trade and other receivables | 3.3 | — | 3.3 |
Cash and cash equivalents | 10.0 | — | 10.0 |
Current liabilities | |||
Trade and other payables | (2.3) | (14.5) | (16.8) |
Lease liabilities | (1.7) | — | (1.7) |
Non-current liabilities | |||
Deferred tax liabilities | (23.6) | — | (23.6) |
Lease liabilities | (0.6) | — | (0.6) |
Total identifiable net assets acquired | 76.8 | (11.8) | 65.0 |
177.0 | (1.3) | 175.7 | |
Total consideration | 253.8 | (13.1) | 240.7 |
Final Fair Value £'m | |||
Consideration | |||
Total consideration | 240.7 | ||
Adjustment for settlement of pre-existing relationship | 1.4 | ||
Consideration paid in cash | 242.1 | ||
Final Fair Value £'m | |||
Net cash outflow on acquisition | |||
Consideration paid in cash | 242.1 | ||
Adjustment for settlement of pre-existing relationship | (1.4) | ||
Acquired cash and cash equivalents | (10.0) | ||
Net cash outflow on acquisition | 230.7 | ||
Foreign exchange differences between acquisition and payment date | (2.0) | ||
Consideration per cash flow | 228.7 |
Prior to acquisition, BioVision was a supplier of products to
The goodwill recognised is attributable to the expertise of the assembled workforce, potential new technology and products and leveraging
11. Alternative performance measures
The Group's performance is assessed using a number of financial measures which are not defined under IFRS and are therefore non-GAAP (or alternative) performance measures. These are set out as follows:
- Constant Exchange Rates ('CER') is a measure which allows management to identify the relative year-on-year performance of the business by removing the impact of currency movements which are outside of management's control.
- Margin percentages (which are calculated by dividing the relevant profit figure by revenue) for each of the relevant profit metrics provide management with an insight into relative year on year performance.
- Adjusted profit measures, as described in note 1(b) to the financial information, are believed by the Directors to enable a reader to obtain a fuller understanding of underlying performance since they exclude items which are not reflective of the normal course of business. Furthermore, such measures are reflective of how performance is measured internally including targets against which compensation is determined. Adjusted profit measures are derived and reconciled to their reported IFRS equivalent on the face of the consolidated income statement as well as in note 3 to the financial information.
The key adjusted profit measure is adjusted operating profit.
Adjusting items (which are excluded to arrive at adjusted performance measures) are also described on the face of the income statement and in note 3 to the financial information.
- Adjusted earnings per share measures are derived from adjusted profit before tax with the rationale for their use being the same as for adjusted profit metrics and are reconciled to their IFRS equivalent in note 6 to the financial information.
- Free cash flow is defined on the face of the consolidated cash flow statement and provides management with an indication of the amount of cash available for discretionary investing or financing after removing capital related items.
Notes to the consolidated financial statements
For the year ended
12. Post balance sheet events
On
In
The new RCF has a term of 4 years, with the option to extend for one further year, for an amount of
Borrowings under both the existing facility and the new facility are unsecured but are guaranteed by certain of our material subsidiary companies.
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