Abcam "back on track" Investec says

Investec said: “Abcam’s FY15 preliminary pre-close trading update shows that the business is back on track."

Abcam provides antibodies to pharma companies

Antibody supplier Abcam (LON:ABC) is “back on track” according to Investec.

The company expects its core catalogue products business to report growth of more than 16% to £136.8mln (£118mln)and see double digit improvement in all other product categories.

Abcam’s FY15 preliminary pre-close trading update shows that the business is back on track, delivering double-digit underlying revenue growth and expanding gross margins,” Investec said.

Alan Hirzel, chief executive, said: “Careful investment has driven growth in revenues and profits and Abcam is well placed for this to continue.”

Sales of Abcam’s RabMab technology, which develops monoclonal antibodies from rabbits instead of mice, grew by more than 24%.

Cannacord Genuity said the “strong” update meant revenues would be above its expectations.

The broker said it expects the “strong performance” to continue due to stability in underlying markets and “Abcam’s increased focus on the customer resulting in above market growth.”

Broker finnCap suggests total revenues could be in the region of £143mln, which would be ahead of its estimates of £137mln.

The gross margin is expected to be in line with the first half of the year (70.4%), compared with some analysts’ expectation of a decline to 70.1%.

Peel Hunt said: “The outperformance of the product business and the improvement in gross margin bode well for growth prospects.”

Shares rose 9.35% to just under 567p.

Quick facts: Abcam

Price: 1282 GBX

Market: AIM
Market Cap: £2.64 billion

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