Life science research tools supplier Abcam (ABC) reported a 22.8% fall in pre-tax profit for the half-year ended 31 December 2019 to £26m as it stepped up investments in line with its five-year strategy. The shares fell 9% to £11.5 on a tough day which saw the FTSE down 6.5%.
Chief executive Alan Hirzel commented: ‘In China, we are starting to see a return to normal operations, and we will work through this situation as we confidently invest in our long term growth and being the most influential company for life science researchers worldwide.’
The company said the full impact of the coronavirus remains uncertain given the evolving global situation, but at this stage it estimates a £3m reduction in revenues, mainly as a result of the early spread of the virus in China.
It added that the supply chain is largely unaffected and its local operations began reopening on 14 February.
The company fell short on one of its key performance indicators (KPIs). The net promoter score fell to 52% against a range of 54% to 60% impacted by ‘technical issues’ which has since been rectified, achieving 54% at the end of February.
The other KPI was comfortably achieved, with revenue growth of 13.8% from in-house catalogue products against a target of 12% to 15%.
The firm is investing heavily in its operations to drive innovation and convert growth opportunities. This resulted in a 28% increase in expenses which held back operating margins to 19.2% (26.8%).
Adjusted earnings per share fell 20% to 13.4p and the dividend was held steady at 3.55p per share.
In light of significant investment opportunities the board is undertaking a full review of its dividend policy including consultation with its key shareholders.
In September the company announced a long-term plan to achieve revenue of £450m to £500m by 2024, putting the company back onto a 12% to 13% revenue growth path at a cost of £175m to £225m of investment.
