First-half growth at Abcam

09/03/2010 Robert Tyerman

Bioscience winner Abcam is investigating where to deploy £33 million cash after upping interim profits 64 per cent to £11.2 million.

The Cambridge-based company, which markets antibodies through its own online catalogue to the protein interactive research market, lifted sales nearly 38 per cent to £31.8 million in the six months to December. Chief executive officer and significant shareholder Jonathan Milner says AIM-quoted Abcam is looking for areas to spend some of the net £33 million cash generated by its operations and comments ‘we could do an acquisition if we spotted one’.

According to Milner, sterling’s weakness against the US dollar has been ‘great’ for the company, which draws more than 90 per cent of its revenues from abroad, mostly in dollars, although today’s $1.5 rate is somewhat higher than last year’s $1.45 average. With only 16 per cent of its products sourced from its own laboratory, Abcam scours universities and 250 other suppliers around the world to supply what it identifies as new areas of demand.

‘We have supply agreements all over the world’, says Milner, who sees epigenetics, ‘modifying proteins around DNA’, as offering attractive new prospects and maintains the company is winning market share from world leader Santa Cruz Biotechnology of California. He adds current UK corporate tax rates are a matter of concern, though Abcam would regret having to relocate.

Shares in Abcam, which increased first-half earnings 63.1 per cent to 23.29p a share and is doubling its interim dividend to 5.42p a share, now trade at £10.80p, three times Growth Company Investor’s recommendation at 350p in March 2008 and valuing the company at £399 million.

Partial profit taking might be prudent. But there should still be more growth to go for.