Don't worry too much about seemingly lower gross margins over at antibody supplier Abcam (ABC). Following the reclassification of certain expenses higher up the income statement, margins came in at 69.7 per cent - below the 70.2 per cent achieved in the year to June 2016. But on a like-for-like basis, margins still grew 140 basis points to 70.7 per cent, which prompted analysts at Numis to upgrade their current year forecasts. The broker now expects pre-tax profit of £63.7m for the year ending June 2017, giving EPS of 24.6p (22.4p in FY2016).
But that wasn't the only impressive metric to be found in these half-year results. Reported revenue growth of 31.2 per cent from the group's antibody catalogue may have had a helping hand from foreign exchange rates, but underlying growth of 10.7 per cent still outstripped the wider market rate of just 3 to 4 per cent. According to chief executive Alan Hirzel, that's down to the breadth of Abcam's product portfolio as well as the convenience it can offer its customers in terms of delivery timeframes. Analysts also pointed to a more beneficial sales mix. RabMAb, the group's higher-margin rabbit monoclonal antibody, generated sales growth of 27 per cent at constant exchange rates - well above the forecast rate of 18-22 per cent.
| ABCAM (ABC) | ||||
|---|---|---|---|---|
| ORD PRICE: | 930p | MARKET VALUE: | £1.89bn | |
| TOUCH: | 928-931p | 12-MONTH HIGH: | 948p | LOW: 572p |
| DIVIDEND YIELD: | 1% | PE RATIO: | 47 | |
| NET ASSET VALUE: | 143p* | NET CASH: | £76.4m | |
| Half-year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2015 | 78.6 | 20.9 | 8.4 | 2.354 |
| 2016 | 103 | 25.1 | 9.8 | 2.825 |
| % change | +30 | +20 | +16 | +20 |
Ex-div: 16 Mar Payment: 13 Apr *Includes intangible assets of £197m, or 97p a share | ||||
