Abcam takes revenue hit but predicts strong bounceback
Cambridge life sciences business Abcam estimates 2020 full year revenue between £14 million and £16m lower – as calculated at April 17 – because of the global impact of COVID-19.
But the UK company, which sells life science research tools globally, has access to £280 million cash and facilities and CEO Alan Hirzel predicts the group will bounce back strongly when the pandemic lifts.
The share price rose immediately on Hirzel’s upbeat assessment as the UK market opened this morning – hitting the tickertape 46p (almost four per cent) higher at 1,202p with the market cap topping £2.6 billion.
Hirzel echoed the swings and roundabouts theme that many Cambridge technology companies are experiencing in international markets because of coronavirus.
While its teams are working remotely wherever possible, Abcam has forged ahead on several business development fronts. It has boosted its supply chain and manufacturing flexibility to support increased demand for existing products used for SARS-CoV-2/COVID-19 research.
The company has also joined more than 20 collaborations across the UK, US, and China focused on SARS-CoV-2 drug and vaccine development and donated critical supplies such as PCR equipment used for testing.
Abcam has not furloughed any staff, nor has it participated in any of the other COVID-19 related government assistance schemes that have been implemented globally.
The group has a strong balance sheet and liquidity position, with proforma net cash of approximately £80m and a £200m revolving credit facility providing additional flexibility.
As announced in its half-year results, sales for the fiscal year as of March 9, had been approximately £3m lower than plan, reflecting the impact of the early stages of the pandemic, predominantly in China.
Since then, Abcam reports that conditions in China have recovered gradually – however policy actions taken by governments around the world to limit the spread of COVID-19 have begun to have an effect on customers in other markets, including across North America and EMEA. Hence the lower full--year revenue forecast.
Hirzel said that over recent days Abcam had begun to see the reopening of labs in certain countries within Europe and a gradual increase in customer activity and revenue as a result. The company added that it was not feasible to give accurate guidance on future sales until there was greater clarity about the full duration and impact of the pandemic.
Hirzel said: “Our priorities are to look after our global team and our customers as the COVID-19 pandemic continues. We are privileged to have an important role in the research and development activity to understand and defeat this virus.
“Abcam’s unique technology and the business’s financial health are positioning our company to emerge stronger from this outbreak. I thank all our colleagues at Abcam for their agility in adapting to the evolving situation and their continued dedication to customers’ needs.”