Abcam falls as outlook overshadows profit growth

Abcam's shares dropped sharply on Monday after stating its outlook will be impacted by "continued softness" in Japan, though the company reported growth for interim revenue and profits.

Alan Hirzel, chief executive of the laboratory product supplier, company's stated that constant-currency revenue growth for the full year is expected to be "broadly in line" with the first six months due to "continued softness" in Japan and phasing of revenue for its custom products & licensing business.

For the six-month period ended 31 December Abcam recorded profit before tax of £33.7m, an increase of 2.7% on the same period the year before, after revenue increased by 11% to £124.7m, booking a 10% increase on a constant currency basis.

Catalogue revenue, which contributed approximately 94% of total revenue in the half and therefor drove overall revenue growth, grew 10.5% on a constant currency basis as all main product categories performed at levels above underlying market growth rates.

However, while China was the fastest growing major market, revenues from Japan declined modestly in what Abcam called a reflection the "weaker funding environment" in the country.

Alan Hirzel, chief executive of Abcam, said: "We made further progress toward achieving our long-term goals in the first half of the year and delivered double digit revenue growth whilst meeting our strategic targets. These results arise from our global team dedicating themselves to serving customer needs whilst building a strong enterprise. Together, they are helping Abcam increase its influence across research, diagnostic and therapeutic applications."

The AIM traded company had cash and cash equivalents of £83.2m at the end of the period, down from £91.6m at the same point the year before, while the interim dividend increased by 3.8% to 3.55p per share.

A note from analysts at Peel Hunt said that they were interpreting any weaknesses "as a buying opportunity", though the note lauded encouraging growth of catalogue revenue driven by recombinant antibodies.

Abcam's shares were down 10.30% at 1,201.92p at 1115 GMT.