Abcam plc(ABCM)2022-03-14 12:12Financial Performance - For the fiscal year ended December 31, 2021, the company recorded revenue of £315.4 million, representing a growth of 17.1% compared to the previous year[306]. - The adjusted operating profit for the same period was £60.4 million, with an adjusted operating profit margin of 19.2%[306][315]. - Revenue for the fiscal year ended December 31, 2021, was £315.4 million, an increase of £46.1 million or 17.1% compared to £269.3 million for the 12-months ended December 31, 2020[338]. - Gross profit increased by £36.1 million to £224.6 million, representing a growth of 19.2% from £188.5 million[338]. - Operating profit rose significantly to £7.1 million, an increase of £6.1 million or 610.0% compared to £1.0 million[338]. - The company reported a profit for the period of £4.4 million, a substantial increase of £5.3 million or 588.9% from a loss of £0.9 million[338]. - Free cash flow for the fiscal year ended December 31, 2021, was £6.0 million, up from £5.6 million in the previous year[318]. - The company reported a working capital balance of £51.2 million as of December 31, 2021, an increase of £4.4 million from the previous year[369]. - The company reported a loss of £0.9 million for the year ended December 31, 2020, which improved to a profit of £5.9 million in 2021[397]. Revenue Drivers - New products introduced since 2019 accounted for approximately 7% of total revenue for the fiscal year ended December 31, 2021, with in-house catalogue revenue growing by 41%[303]. - The revenue growth was driven by a recovery in laboratory activity, increased demand for in-house products, and the acquisition of BioVision, which contributed approximately 1.0% to reported revenue growth[341]. - Catalogue revenue increased to £296.4 million, reflecting a 17.9% reported revenue growth, with in-house product revenue growing by 35.2% to £174.1 million[344]. - The company launched over 2,500 high-quality antibody products during the fiscal year ended December 31, 2021, aimed at filling unmet needs in research and improving product quality[304]. Acquisitions and Investments - The acquisition of BioVision, Inc. in October 2021 for $340.0 million contributed £2.6 million to revenue but also resulted in a loss before tax of £2.6 million[310][311]. - Capital expenditures were £59.8 million during the fiscal year ended December 31, 2021, compared to £45.3 million for the previous year, with significant investments in global footprint developments[368]. - The company expects to continue investing in its business and may require additional capital for technological advancements and acquisitions[362]. Operating Expenses - Selling, general and administrative expenses before exceptional items increased by £30.0 million to £150.6 million, a rise of 24.9% from £120.6 million[338]. - Research and development expenses before exceptional items were £16.7 million, a decrease of £0.6 million or 3.5% from £17.3 million[338]. - Exceptional items, share-based payments, and amortization of acquisition intangibles totaled £53.3 million, up from £49.6 million in the previous year[352]. - Finance costs decreased to £2.7 million, a reduction of £0.9 million or 25.0% from £3.6 million[333]. Taxation and Credits - The company benefited from a tax credit of £1.3 million, compared to a tax charge of £0.3 million, resulting in a £1.6 million improvement[338]. - The effective tax rate for the fiscal year was 19.7%, slightly lower than the previous year's 20.4%, with a tax expense of £0.3 million compared to a credit of £1.3 million in the prior year[357]. - The company benefits from the U.K. research and development expenditure credit (RDEC) at a rate of 13% for qualifying expenditures[95]. - The U.K.'s "patent box" regime allows certain profits from patented products to be taxed at an effective corporation tax rate of 10%[96]. Challenges and Risks - The company faced challenges due to the COVID-19 pandemic but saw a benefit to revenues as laboratories reopened during the fiscal year ended December 31, 2021[312]. - The company relies on contractors for key operational roles, which poses risks related to motivation and alignment with commercial objectives[86]. - The company must comply with extensive laws and regulations, particularly regarding the marketing of research use only (RUO) products[104]. - Noncompliance with applicable laws and regulations could lead to significant consequences, including product recalls, monetary sanctions, and restrictions on operations[114]. Intellectual Property - The company relies on a combination of patents, trade secret protection, and confidentiality agreements to protect its intellectual property, which is crucial for competitive positioning[116]. - The patent prosecution process is complex and costly, and the company may not be able to secure necessary patents in a timely manner[117]. - The company may face significant costs and challenges in litigation to protect its intellectual property, which could adversely affect its business operations and financial condition[147]. - The company may not be able to adequately protect its trademarks and trade names, which could impede its ability to build brand recognition and compete effectively in the market[162]. Market and Trading - The price of the company's ADSs may be volatile and fluctuate significantly due to various factors, including operating results that vary from financial guidance[167]. - The company cannot assure that an active trading market for its ADSs will be sustained, which may affect liquidity and pricing[170]. - The dual listing of the company's ordinary shares and ADSs may adversely affect the liquidity and value of both securities[172]. - As a foreign private issuer, the company is exempt from certain U.S. reporting requirements, which may make its ADSs less attractive to some investors[175].