Worries over the sustainability of demand for medical antibodies as public spending is cut have weighed down on Abcam in recent months, but these half-year results still showed sales growing by an underlying 20 per cent, which suggests that achieving a spread of customers across the globe will be even more vital to avoid lagging growth in developed economies.
Lacklustre growth in the UK stood out, with sales growing by only 9.5 per cent to £2.8m, accounting for around 7 per cent of total sales, over fears on spending cuts. That compares unfavourably with double-digit growth posted in the much larger operations in North America (sales rose a fifth to £17.7m) and Europe (sales up 16.2 per cent to £10.2m, driven by Germany's booming economy). In Asia, the Hong Kong office recorded a 43 per cent rise in revenues, albeit from a low base, on the back of sales into China. Chief executive Jonathan Milner said the priority is to expand in China, primarily through storing antibodies in the country to allow for quicker delivery to customers. He added that there had been some improvement in UK trading conditions.
Peel Hunt upgraded forecasts by 3 per cent to give EPS of 12.6p for 2011 (10.5p in 2010), rising to 14.2p in 2012.
ABCAM (ABC) | ||||
|---|---|---|---|---|
| ORD PRICE: | 385p | MARKET VALUE: | £691m | |
| TOUCH: | 384-387p | 12-MONTH HIGH: | 395p | LOW: 213p |
| DIVIDEND YIELD: | 1.1% | PE RATIO: | 31 | |
| NET ASSET VALUE: | 33p | NET CASH: | £47m | |
| Half-year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p)* | Dividend per share (p)* |
|---|---|---|---|---|
| 2009 | 31.8 | 11.2 | 4.66 | 1.08 |
| 2010 | 39.4 | 15.1 | 6.17 | 1.45 |
| % change | +24 | +35 | +32 | +34 |
Ex-div: 16 Mar Payment: 15 Apr *Earnings and dividends adjusted to reflect five-for-one share split in November 2010 | ||||
