TIDMABDX
RNS Number : 3637G
Abingdon Health PLC
29 March 2022
Abingdon Health plc
("Abingdon" or "the Company")
Interim Results for the six months ended 31 December 2021
York, U.K - 29 March 2022: Abingdon Health plc (AIM: ABDX), a
leading international developer and manufacturer of high quality
and effective rapid tests, announces its unaudited interim results
for the six months ended 31 December 2021.
Operational Highlights (including post-period):
-- CE-marking for professional use of AbC-19(TM) Semi-Q Rapid
Test, which produces semi-quantitative results via a line intensity
scorecard;
-- AppDx(R) smartphone app solution for lateral flow tests
reached critical technical performance milestone, an additional UK
patent has been granted for the AppDx(R) technology and is now
ready for commercial launch;
-- Two contract service opportunities secured to date in 2022 -
in fertility testing and environmental monitoring;
-- The transfer of the Vatic Health Ltd ("Vatic") antigen test
into manufacturing is progressing as planned. Three technical
transfer batches have been completed which adhere to specification
with the final batch to be shipped to Vatic at the end of March
according to plan. Initial production orders have been received and
manufacturing will commence following technical transfer. Vatic
submitted its FDA Emergency Use Authorisation ("EUA") in March
2022;
-- As announced in an RNS Reach today , DeepVerge plc
("DeepVerge") and Abingdon have signed a Memorandum of
Understanding ("MoU") for a commercial agreement for the
development, manufacture and commercialisation of lateral flow
tests for DeepVerge's Modern Water and Life Science divisions;
-- As announced in an RNS Reach today , Vatic and Abingdon have
signed an MoU for a commercial agreement for the development,
manufacturing and commercialisation of lateral flow self-tests in
the area of infectious diseases with an initial focus on influenza;
and
-- Strong pipeline of other technical transfer opportunities,
highlighting benefits of integrating our lateral flow contract
development and manufacturing proposition.
Financial Highlights:
-- Revenue decreased to GBP1.7m (2020: GBP7.7m), predominantly
due to no DHSC being recognised in the period, as well as other
COVID-19 non-recurring revenues falling;
-- Like-for-like Contract Manufacturing revenue (excluding
COVID-19 related contracts) decreased by 15.2% to GBP1.0m (2020:
GBP1.2m);
-- Like-for-like Contract Development revenue increased by 27.6% to GBP0.9m (2020: GBP0.7m);
-- Gross profit margin adjusted for stock provisions was 25.4%
(2020 40.1%), main impact on margin being labour under-recoveries
with the changing cost base of the business on lower turnover;
and
-- Adjusted(1) Operating loss of GBP4.8m (2020: Adjusted(2) Operating loss of GBP0.1m);
-- Non-binding terms of a settlement with DHSC were agreed on 9
November 2021. The Company awaits conclusion of this matter and
payment of money owed, totalling GBP8.45m of unpaid invoices;
and
-- Fundraise of GBP6.5m gross and GBP6.1m net of fees in
December 2021 to support working capital and new product
developments in the market segments of infectious disease for flu
testing, Lyme disease and hepatitis C.
(1) adjusted for amortization, depreciation, share based payment
expense and non-recurring legal fees
(2) adjusted for amortization, depreciation, share based payment
expense and listing costs
Chris Yates, CEO at Abingdon Health plc, commented:
"Our focus remains on providing our customers with a first-class
lateral flow contract development and manufacturing service. We
have invested significantly in our operational infrastructure over
the past 18 months and more importantly we have advanced our
technical capability in developing, transferring and manufacturing
lateral flow tests across an increasingly diverse range of use
cases. I believe this is evidenced by the positive progress, and
customer feedback we have received, in the scale-up to manufacture
of recent tests, including Vatic, and I am proud of our people for
the commitment and team effort they have shown in achieving
these.
"We believe we are uniquely positioned in Europe to provide
prospective customers with an efficient and expert technical
transfer service to transition their lateral flow products into
manufacture. With supply chain challenges remaining a major issue
for many of our prospective customers, we are seeing significant
interest in on-shoring and outsourcing lateral flow test
manufacture as the international landscape for sourcing of these
tests becomes more uncertain in these changing times. In addition,
the diverse market and applications for lateral flow testing
continues to grow and we are increasingly focused on a broader
range of opportunities across clinical (including COVID-19), animal
health, environmental and plant pathogen testing, giving us
confidence that our strategy will drive future revenue growth."
For further information, please contact:
Abingdon Health plc www.abingdonhealth.com/investors/
Chris Yates, Chief Executive Officer Via Walbrook PR
Melanie Ross , Chief Financial Officer
Chris Hand, Non-Executive Chairman
Singer Capital Markets (Sole Broker and Tel: +44 (0)20 7496 3000
Nominated Adviser)
Shaun Dobson, Peter Steel, Alex Bond
(Corporate Finance)
Tom Salvesen (Corporate Broking)
Walbrook PR Limited Tel: +44 (0)20 7933 8780 or abingdon@walbrookpr.com
Paul McManus / Lianne Applegarth Mob: +44 (0)7980 541 893 / +44
Phil Marriage (0)7584 391 303 +44 (0)7867
984 082
This announcement contains inside information for the purposes
of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it
forms part of UK domestic law by virtue of the European Union
(Withdrawal) Act 2018. Upon the publication of this announcement
via the Regulatory Information Service, this inside information is
now considered to be in the public domain.
About Abingdon Health plc
Abingdon Health is a world leading developer and manufacturer of
high-quality rapid tests across all industry sectors, including
healthcare and COVID-19. Abingdon Health is the partner of choice
for a growing global customer base and takes projects from initial
concept through to routine and large-scale manufacturing and has
also developed and marketed its own labelled tests.
The Company offers product development, regulatory support,
technology transfer and manufacturing services for customers
looking to develop new assays or transfer existing laboratory-based
assays to a lateral flow format. Abingdon Health aims to support
the increase in need for rapid results across many industries and
locations and produces lateral flow tests in areas such as
infectious disease, clinical testing including companion
diagnostics, animal health and environmental testing. Faster access
to results allows for rapid decision making, targeted intervention
and can support better outcomes. This ability has a significant
role to play in improving life across the world. To support this
aim Abingdon Health has also developed AppDx(R) , a patented
customisable image capturing technology that transforms a
smartphone into a self-sufficient, standalone lateral-flow
reader.
Founded in 2008, Abingdon Health is headquartered in York,
England.
www.abingdonhealth.com
BUSINESS REVIEW
Strategy
Abingdon Health's goal is to make rapid testing accessible to
all, by providing our customers with a comprehensive lateral flow
contract development and automated manufacturing service and
through the development and launch of our own lateral flow
products.
As outlined in the trading update earlier this month, the
Company is focused on three strategic growth areas:
1) Contract Development and Manufacturing Service
Our focus is to provide our customers with a rst-class
development, technical transfer and manufacturing contract service,
supported by additional expertise such as its in-house regulatory
and commercial support. Many of our people have been involved in
bringing lateral flow tests "from idea to market" across a range of
different sectors and we can bring this experience to bear in
servicing the needs of our growing customer base.
Non-COVID-19
As previously disclosed, the Company has successfully secured
two contract service opportunities to date in 2022, one with an
existing customer and one with a new European customer. One of
these customers is in the eld of fertility testing, the other is in
the eld of environmental monitoring, with both having commenced the
process of scale-up to automated manufacturing.
We also have a number of other non-COVID-19 opportunities in the
pipeline in a range of different clinical areas and we are
confident of converting a number of these opportunities into signed
contracts over the coming months.
We have seen, over recent months, a couple of key themes emerge
in our markets. Firstly, supply chains remain challenging with
issues for those buying product from abroad around surety of supply
from Far Eastern manufacturers with delivery delays, logistics
challenges (and increased logistics costs) and product quality
issues. This is leading us to experience an increase in enquiries
from prospective customers looking for a manufacturing partner
"closer to home".
Secondly, a number of prospective customers that have
successfully launched products are looking for a manufacturing
partner to allow them to transition to high volume manufacture.
Abingdon is an ideal partner given our ability to manufacture at
scale and significant investment in automation in the primary
scientific areas of production, including biochemical processes,
spraying of membranes, lamination of finished lateral flow test
strips, and the assembly and foiling of devices.
Today we announced the signing of an MoU with DeepVerge, an AIM
listed environmental and life sciences group, leading to a
commercial agreement for the development and manufacture of a range
of Lateral Flow Tests ("LFTs") for Deepverge's Modern Water and
Life Science divisions.
The MoU has been signed to enable the potential integration of
the respective technologies of both Abingdon and DeepVerge. Both
parties intend to enter into a longer-term commercial agreement,
with Abingdon manufacturing and DeepVerge commercialising these new
products.
Modern Water is the environmental division of DeepVerge that has
developed and commercialised cutting-edge technology focused on
monitoring of contaminated water and decontamination of
wastewater.
Abingdon and DeepVerge will work on the development of LFT
devices to detect dangerous pathogens and chemicals in household
drinking and wastewater. This will add an extra layer of detection
to the Modern Water range of equipment and services by
incorporating a LFT into a hand-held mobile unit. The results can
be digitally scanned using a mobile app with the potential to
incorporate Abingdon's proprietary AppDx(R) technology.
In addition, Abingdon and DeepVerge will collaborate on the
development of new LFTs to be added to DeepVerge's life science
home-test portfolio , including hormone analysis related to
menopause and associated skin changes, stress levels (cortisol),
vitamin D, and other health markers related to conditions including
diabetes, heart and liver function.
COVID-19
Abingdon's approach to COVID-19 is to target large contract
manufacturing opportunities. It is the Board's opinion that, whilst
individual governments may change their testing approach, the need
from the public or private sector for COVID-19 antigen testing is
likely to remain for an extended period. In all likelihood we will
see an increase in testing requirements during the autumn and
winter periods on a seasonal basis in the same way we do with the
flu virus.
It is also interesting to note that the Chinese Government has
recently made antigen tests available to the general public for the
first time as it transitions away from a "zero-tolerance" approach
to COVID-19. This may create challenges for the supply to Europe of
Chinese-made lateral flow tests as these manufacturers divert their
products to their domestic market. This further underlines the need
for lateral flow development and manufacturing in local markets.
Abingdon is well placed to service these needs.
Abingdon continues to work with Vatic on the technical transfer
to large-scale manufacture of its Know-Now(TM) COVID-19 rapid
antigen test into Abingdon's facilities. We are confident the Vatic
Know-Now(TM) test will complete technical transfer to manufacture
during March 2022. We also note Vatic's recent announcement of its
submission to FDA EUA of its Know-Now(TM) COVID-19 rapid antigen
test, which would open up the largest global diagnostics market to
this test.
Vatic has placed firm purchase orders for the manufacture of
Know-Now(TM) Tests and Abingdon will commence production as soon as
practicable following completion of technical transfer, scheduled
for 31 March 2022.
We were disappointed with the pause in the transfer of Avacta
Group plc's ("Avacta") A DX(R) SARS-CoV-2 antigen lateral ow tests,
following the successful preparation of three batches of its
product which adhered to the agreed speci cations and passed all
quality control procedures.
Abingdon is in active discussions on additional contract
services opportunities in the area of COVID-19 antigen testing
speci cally where the products are already in manufacture and a
second manufacturer is required or there is a need to support a
particular stage of the manufacturing process, for example in
primary production where there may be a need to spray reagents on
nitrocellulose and laminate to card format. A number of these
discussions are advancing and we are optimistic of commercial
traction in due course.
With regards to the AbC-19(TM) Rapid Test, the Directors
strongly believe that the test has significant utility. However, to
date, national testing strategies have not focused on antibody
testing. Therefore, the Company has, for now, decided to rotate its
focus away from block sales to health authorities toward end users
of the AbC-19(TM) test and the BioSure COVID-19 antibody test, for
which Abingdon is the manufacturer. The AbC-19(TM) product will
therefore remain available for sale, including via the Abingdon
website, and the Company will be ready to scale-up its supply as
and when national testing strategies focus on an individual's
antibody levels as a proxy for immunity.
2) E-commerce and distribution
The Company is in the process of developing and launching an
enhanced B2C e-commerce website, due for completion in Q2 2022. The
Directors believe that the direct-to-consumer lateral ow test
market will grow signi cantly and in its recent report, Future
Market Insights forecasts the global market for self-testing kits
will be worth US $11bn by 2030.
The Company expects its e-commerce site to become a 'one-stop
shop' for consumers to purchase lateral ow tests across a range of
indications, with Abingdon selling its own tests as well as
complementary third-party tests directly to consumer via the site.
These third-party tests will be independently validated by the
Company to provide the customer with the assurance that the tests
have been checked by lateral flow experts and are "fit for purpose"
and user-friendly.
As part of this process of improving our digital offering we
relaunched in March 2022 our B2B Pocket Diagnostics e-commerce
site. This will initially focus on plant, food and environmental
testing products and we will look to augment our existing Pocket
Diagnostic product range with third party products going
forward.
We are also actively building our own distribution network. Our
expertise is in the development and manufacture of lateral flow
tests and we are not looking to own the route to market. Therefore,
we will work with partners to distribute our lateral flow tests in
certain channels and internationally. We recently appointed a new
distribution channel manager tasked with building this distribution
channel to provide routes to market for both our own products and
third-party products which we have validated.
3) New product development
There is strong public sentiment that people are increasingly
willing to manage their own healthcare but also wish to prevent
spreading infection further by, for example, isolating from elderly
and immune compromised family and friends in the event of a
positive test result.
The Company therefore intends to develop lateral ow self-tests
in areas of large and unmet need. The Company has commenced its
product development process to develop lateral ow self-tests for in
uenza A/B and Lyme disease with hepatitis C work at an earlier
stage.
Global Market Insights estimates that the rapid in uenza
diagnostic tests market will be worth US $689m globally by the year
2025. The majority of u testing is currently performed by
professionals using 'for professional use only' tests, and the
Directors believe there is a clear rationale for an influenza
self-test, with encouraging early market feedback having been
undertaken with consumers and clinicians. The flu test programme
has commenced and we are undertaking reagent selection at this
time.
We were pleased to announce today the signing of an MoU with
Vatic, leading to a commercial agreement for the development and
manufacture of a range of LFTs in the area of infectious disease.
Initially Abingdon and Vatic will focus on the development of an
innovative influenza LFT, utilising Vatic's proprietary technology
platform which identifies proteins via their surface biological
mechanisms. The technology has been proven in the development of
Vatic's KnowNow test, and means the test only identifies
"infectious" or "active" copies of the virus which are capable of
cell entry and thereby infect a human cell. The application of this
technology within the influenza LFT could have the same potential
benefits in terms of accuracy and sensitivity in picking up only
those that are infectious, differentiating it from other
commercially available tests.
We are working with a European partner, which is an expert in
this field, on the development of our Lyme disease self-test that
is providing validated samples and expertise in this area. Work to
date has shown that the test is functional and going forward
practical work will focus on final confirmation of reagents and
test strip material configuration.
The consumer market feedback we have received from independent
surveys on both flu and Lyme disease is very positive and we are
confident there is a market for these tests. With regard to flu
testing, our results indicate that the public understand the
benefits of testing themselves, are prepared to pay for tests, and
that they will change their behaviour if they receive a positive
test result.
In terms of Lyme disease there is a strong recognition from our
consumer survey that people want a test to rule in/out Lyme disease
to enable early diagnosis and treatment. There have been a number
of high-profile cases of Lyme disease where late detection caused
significant medical complications and these may have been prevented
by early diagnosis and treatment.
Operational capacity
The Company has a large capacity to develop and manufacture
lateral flow tests at its disposal due to the investment made
following the IPO. This capacity is capable of delivering c.150m
test strips per annum, and c.85m fully completed foiled wrapped
devices. We believe this makes us one of the largest automated
lateral flow test manufacturers in Europe with the ability to
provide a full contract service to our customers, including reagent
selection, test development, technical transfer into manufacturing,
regulatory consultancy and commercial support. Our investment in
automation means that we can compete not only on scale and quantity
of tests, but also on price whilst delivering a quality product to
our customers, without the concerns of significant freight costs or
timing delays associated with bringing product in from other areas
of the world.
AppDx(R) smartphone app solution for lateral flow tests
AppDx(R) uses proprietary digital processing and machine
learning algorithms to allow the objective reading of lateral flow
results via a smartphone. Abingdon has developed this algorithm as
a Software Development Kit (SDK) which can then be incorporated
into a smartphone app solution in any potential application, for
example in the development of self-test solutions in the clinical
market.
The AppDx(R) SDK is protected by a portfolio of intellectual
property. In addition to being a knowledge leader for source code
for SDK in this field, and holding historical patents, the Company
has a newly granted UK patent on the use of neural networks to read
lateral flow tests (GB2583149) with other international
applications pending. The Company has additional patent
applications filed and in process.
Using deep learning for the qualitative readout of rapid tests,
Abingdon's model achieved 98.15% sensitivity and 98.28% specificity
on a blood-based lateral flow test. Following achievement of this
critical technical performance milestone the AppDx(R) SDK is ready
for commercial launch. As previously advised, the Company is
seeking to work with a small number of strategic partners to bring
this important digital solution to market later this year.
People
During the six months to 31 December 2021, the Company
stabilised its employee numbers with a small downward shift from
134 people at the start of the financial year to 123 as at the end
of December 2021. The Company will continue to review its
operational infrastructure to ensure it is appropriately sized to
satisfy its near term pipeline and revenue growth expectations.
As a business, Abingdon Health has undergone significant change
in the past 18 months with a large scale up project for AbC-19(TM)
and the regrettable redundancy programme that followed as a direct
impact of the DHSC dispute. The Board would like to thank all of
the Company's staff for their flexibility and support during this
challenging period; their commitment and endeavour continues to be
greatly appreciated. Throughout the COVID-19 pandemic, more than
ever, the safety and well-being of the Company's staff has been the
priority.
To support the Company's strategic refocus, Olly Gardner was
appointed as Chief Commercial Officer in February 2022 and Mark
Jones was appointed Chief Operating Officer to drive forward both
the commercial strategy and the operational roll-out of new
manufacturing programmes.
Financial Performance
As previously disclosed, revenues during the period were GBP1.7m
(2020: GBP7.7m), representing a decrease of 78%. The Company's
contract with the DHSC for the supply of AbC-19(TM) forms a
substantial portion of this reduction in revenue for the period.
GBP4.4m in the prior period related to AbC-19(TM) sales to DHSC and
GBP1.7m related to other COVID-19 related non-recurring
revenues.
The gross profit margin (adjusted for stock obsolescence) for
the period decreased to 25.4% (2020: 40.1%). This reflects the
labour under-recovery of the infrastructure built and
under-utilised.
Stock obsolescence was a further GBP1.6m, which reflects the
stocks of AbC-19(TM) built for deployment in territories that have
not materialised in the timeframe expected. The Directors continue
to believe that it has a role to play in COVID-19 vaccine roll
outs. As such, we continue to offer the product, however, the
volumes of stocks held will now be much lower until traction
increases.
Adjusted operating loss has increased significantly from the
prior period to GBP4.8m (2020: loss of GBP0.1m) due to lack of
volume. Adjustments made to the operating loss include share-based
payment expenses (GBP0.1m) and one-off costs relating to the
judicial review scheduled for May 2022 where the Group is named as
an interested party (GBP0.2m).
The Company's cash balance at 31 December 2021 was GBP5.9m.
DHSC
At this time, the DHSC owes Abingdon Health GBP8.4m in relation
to the supply of AbC-19(TM) and the procurement of materials on
behalf of the DHSC. As described in Note 3 to these interim
statements the Board are confident that the Company can
substantially recover monies related to this debt, however, this is
taking longer than previously anticipated and the timing of
recovery is uncertain following the signing of a non-binding heads
of terms agreement in November 2021. Due to the uncertain timing
and completion of this agreement, the Company has at this time
elected to treat a portion of these amounts owing as a bad debt,
which will enable the reclaiming of c. GBP0.8m in VAT previously
paid over to HMRC by Abingdon in relation to the provision of tests
(but not paid to Abingdon by DHSC). At the point the monies are
paid over by the DHSC in final settlement, the necessary further
amendments to VAT will be made and paid over to HMRC.
Current Trading and Outlook
The Board is confident that the Company is well placed to take
advantage of the expected growth in the lateral flow test market
across the clinical, animal health, plant and environmental
markets. Lateral flow tests are now much more widely understood and
adopted by the general public and COVID-19 has highlighted the
significant utility of these cost-effective rapid tests. The Board
is encouraged by the pipeline of opportunities the Company is
actively engaging with.
That said, the Company continues to work in a complex and
uncertain environment and is mindful that the capacity within the
business is under-utilised at this time.. As evidenced above, the
Company has a strong pipeline of opportunities in the near to
medium term which should lead to revenue growth. However, if these
opportunities do not convert then the Company remains able to take
action to conserve cash.
As a UK developer and manufacturer of lateral flow tests, the
Company is uniquely placed to support its growing customer base as
they focus on surety of supply and quality and the Board is
confident that its redefined strategic plan will ultimately deliver
value for shareholders.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the period ended 31 December 2021
As restated*
Notes Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
31 December 31 December 30 June
2021 2020 2021
GBP'000 GBP'000 GBP'000
Revenue 1 1,704 7,687 11,618
Cost of sales (2,844) (4,606) (7,475)
-------------
Gross (loss)/profit (1,140) 3,081 4,143
Administrative expenses (3,664) (3,229) (7,547)
Other income 50 134 148
------------------------------ -------- ------------- ------------- ---------
Operating loss (before
adjusting items) (4,754) (14) (3,256)
Amortisation (58) (7) (42)
Depreciation (581) (34) (707)
Share-based payment expenses (100) (1,243) (1,367)
Non-recurring legal fees (198) - (257)
Listing costs - (570) (903)
Non-recurring redundancy
costs - - (188)
Operating loss (5,691) (1,868) (6,720)
Finance income - - -
Finance costs (34) (205) (234)
Loss before taxation (5,725) (2,073) (6,954)
Taxation (charge)/credit (9) 1,713 (19)
Loss for the period (5,734) (360) (6,973)
------------- ------------- ---------
Other comprehensive loss - (16) -
Total comprehensive loss
for the period (5,734) (376) (6,973)
------------- ------------- ---------
Basic earnings per share
(pence) 2 (2.05) (0.05) (2.65)
------------- ------------- ---------
Diluted earnings per
share (pence) 2 (2.05) (0.05) (2.65)
------------- ------------- ---------
*The restatement is detailed in note 6.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
For the period ended 31 December 2021
Notes As restated*
Unaudited Unaudited Audited
31 December 31 December 30 June
2021 2020 2021
GBP'000 GBP'000 GBP'000
ASSETS
Non-current assets
Goodwill 763 763 763
Other intangible assets 445 174 465
Property, plant and equipment 8,764 5,315 9,041
Deferred tax assets - 1,204 -
-------------- -------------
9,972 7,456 10,269
-------------- ------------- ----------
Current assets
Deferred tax assets - 1,000 -
Inventories 7,736 5,833 7,888
Trade and other receivables 3 9,592 6,801 9,978
Income tax debtor 155 275 115
Cash and cash equivalents 5,961 16,516 4,977
-------------- ------------- ----------
23,444 30,425 22,958
-------------- ------------- ----------
Total assets 33,416 37,881 33,227
-------------- ------------- ----------
LIABILITIES
Current liabilities
Trade and other payables 10,263 8,540 10,405
Borrowings 125 73 125
Lease liabilities 220 228 227
10,608 8,841 10,757
-------------- ------------- ----------
Non-current liabilities
Borrowings 311 177 367
Lease liabilities 668 888 776
-------------
979 1,065 1,143
-------------- ------------- ----------
Provisions
Deferred tax liabilities - 509 -
-------------- ------------- ----------
- 509 -
-------------- ------------- ----------
Total liabilities 11,587 10,415 11,900
-------------- ------------- ----------
Net assets 21,829 27,466 21,327
-------------- ------------- ----------
EQUITY
Share capital 4 76 69 69
Share premium 30,309 23,846 24,180
Share based payment reserve 5 121 329 44
Retained earnings (8,677) 3,222 (2,966)
Total equity 21,829 27,466 21,327
-------------- ------------- ----------
*The restatement is detailed in note 6
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the period ended 31 December 2021
Share Share Share based Retained Total equity
capital premium payment earnings attributable
reserve to owners
of the parent
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 July 2020 15 13,195 70 (10,531) 2,749
Loss (as restated, note 6) - - - (360) (360)
Deferred tax OCI movement - - - (16) (16)
Total comprehensive loss for the period - - - (376) (376)
Capital reduction - (13,145) - 13,145 -
Bonus share allotment 46 (46) - - -
Share option expense (as restated, note
6) - - 1,243 - 1,243
Share options exercised (as restated,
note 6) 1 - (973) 973 1
Share options cancelled - - (11) 11 -
Conversion of loan notes 1 3,481 - - 3,482
Shares issued on listing 6 21,994 - - 22,000
Cost of issue of shares - (1,633) - - (1,633)
At 31 December 2020 (as restated) 69 23,846 329 3,222 27,466
--------- --------- ------------ ---------- ---------------
Loss - - - (6,613) (6,613)
Deferred tax OCI movement - - - 16 16
--------- --------- ------------ ---------- ---------------
Total comprehensive loss for the period - - - (6,597) (6,597)
Share option expense - - 124 - 124
Share options cancelled - - (409) 409 -
Cost of issue of shares adjustment - 334 - - 334
At 30 June 2021 69 24,180 44 (2,966) 21,327
--------- --------- ------------ ---------- ---------------
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (continued)
For the period ended 31 December 2021
Share Share Share based Retained Total equity
capital premium payment earnings attributable
reserve to owners
of the parent
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Loss - - - (5,734) (5,734)
---------- --------- ------------ ---------- ---------------
Total comprehensive loss for the period - - - (5,734) (5,734)
Share option expense - - 100 - 100
Share options cancelled - - (23) 23 -
Issue of shares 7 6,493 - - 6,500
Cost of issue of shares - (364) - - (364)
At 31 December 2021 76 30,309 121 (8,677) 21,829
---------- --------- ------------ ---------- ---------------
CONSOLIDATED STATEMENT OF CASHFLOWS
For the period ended 31 December 2021
As restated
Unaudited Unaudited Audited
6 months 6 months Year ended
ended ended 30 June
31 December 31 December 2021
2021 2020
GBP'000 GBP'000 GBP'000
Cash flow from operating activities
Loss for the period (5,734) (360) (6,973)
Adjustment for:
Other income (50) (134) (148)
Net finance costs 34 205 234
Tax charge/(credit) 9 (1,713) 19
Amortisation and impairment of intangible
assets 58 7 42
Share based payments 100 1,243 1,367
Depreciation of property, plant
and equipment 581 337 707
Disposal of property, plant and 39 - -
equipment
Changes in working capital:
Decrease/(Increase) in inventories 152 (5,054) (7,109)
Decrease/(increase) in trade and
other receivables 385 (5,124) (8,103)
(Decrease)/increase in trade and
other payables (134) 5,326 7,033
-------------- -------------- -------------------
Cash used in operations (4,560) (5,267) (12,931)
Interest paid (34) (27) (51)
Income taxes received 1 - 106
-------------- -------------- -------------------
Net cash used in operating activities (4,593) (5,294) (12,876)
-------------- -------------- -------------------
Cash flow from investing activities
Purchase of intangible assets (39) (166) (71)
Internally capitalised development
costs - - (419)
Purchase of property, plant and
equipment (342) (2,654) (6,761)
Proceeds on disposal of property,
plant and equipment - 8 8
Payment of deferred consideration - (32) (32)
-------------- -------------- -------------------
Net cash used in investing activities (381) (2,844) (7,275)
-------------- -------------- -------------------
Cash flow from financing activities
Net proceeds from issue of own shares 6,135 20,368 20,702
Cash withheld for SAYE scheme (3) - 9
Proceeds from new bank loans and
borrowings - - 250
Repayment of bank loans and borrowings (58) (13) (19)
Payment of lease obligations (116) (109) (222)
Proceeds from issue of loan notes - 20 20
Net cash generated from investing
activities 5,958 20,266 20,740
-------------- -------------- -------------------
Increase in cash and cash equivalents 984 12,128 589
Net cash and cash equivalents at
beginning of the period 4,977 4,388 4,388
-------------- -------------- -------------------
Net cash and cash equivalents at
end of period 5,961 16,516 4,977
-------------- -------------- -------------------
Notes to the Interim Financial Statements
For the period ended 31 December 2021
Company information
Abingdon Health PLC ("the Company") is a public limited company
domiciled and incorporated in England and Wales. The Company is
quoted on the London Stock Exchange's Alternative Investment Market
("AIM"). The registered office is York Biotech Campus, Sand Hutton,
York, YO41 1LZ. The consolidated financial information (or
"financial statements") incorporate the financial information of
the Company and entities (its subsidiaries) controlled by the
Company (collectively comprising the "Group").
The principal activity of the Group is to develop, manufacture
and distribute diagnostic devices and provide consultancy services
to businesses in the diagnostics sector.
Significant accounting policies
The Group has presented below key extracts of its accounting
policies. All policies are consistent with the previous statutory
financial statements for the year ended 30 June 2021 and are
expected to be consistently applied for the current year ended 30
June 2022 inclusive of these changes. However, there has been a
restatement to the period ended 31 December 2020 as detailed in
note 6.
Basis of preparation
These financial statements have been prepared in accordance with
international accounting standards ("IFRS") as adopted by the
United Kingdom ("UK") insofar as these apply to interim financial
statements.
The financial information set out in these interim consolidated
financial statements for the six months ended 31 December 2021 is
unaudited. The financial information presented are not statutory
accounts prepared in accordance with the Companies Act 2006, and
are prepared only to comply with AIM requirements for interim
reporting.
The Group's financial statements for the year ended 30 June 2021
have been filed with the Registrar of Companies. The auditor's
report on those financial statements was unqualified and did not
contain a statement under Section 498 (2) of the Companies Act
2006, except for a material uncertainty in relation to going
concern.
Basis of measurement
The financial statements have been prepared on the historical
cost basis, modified to include the revaluation of certain
financial instruments at fair value.
Use of estimates and judgements
The preparation of the financial statements in conformity with
IFRS requires management to make judgements, estimates and
assumptions that affect the application of policies and reported
amounts of assets and liabilities, income, and expenses. The
estimates and associated assumptions are based on historical
experience and various other factors that are believed to be
reasonable under the circumstances, the results of which form the
basis of making the judgements about carrying values of assets and
liabilities that are not readily apparent from other sources.
Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing
basis. Revisions to accounting estimates are recognised in the
period in which the estimate is revised and in any future periods
affected.
Going concern
As at 31 December 2021, the Group has net current assets. The
Group has a number of contracts in place which generate revenues,
and are expected to continue doing so. The Group also has unused
cash reserves available.
The Group continues to focus on securing sales of existing and
new products, but the delay in recovery of monies owed by the
Department of Health and Social Care ("DHSC"), which are described
more fully in note 3, meant that there was a need to obtain further
funding as well as continue to monitor costs in the near term to
ensure that the Group has adequate financial resources to meet its
obligations as they fall due for the next twelve month period with
reasonable certainty. The above factors represented a material
uncertainty that may cast significant doubt on the Group's ability
to continue as a going concern.
The Group received additional funding support of GBP6.5m through
an issue of shares during the period to 31 December 2021. In case
the DHSC receivable remains unpaid for an extended period, the
Directors are of the opinion that the funds raised and the
significant unused cash reserves plus to continued monitoring of
costs and commercial traction will permit it to remain a going
concern, and as such the Directors continue to adopt a going
concern basis for the preparation of these interim financial
statements.
Basis of consolidation
The Group financial information consolidates those of the
Company and the subsidiaries that the Company has control of.
Control is established when the Company is exposed, or has rights,
to variable returns from its involvement with the subsidiary and
has the ability to affect those returns through its power over the
subsidiary.
Electronic communications
The Company is not proposing to bulk print and distribute hard
copies of this Interim Report for the six months ended 31 December
2021 unless specifically requested by individual shareholders. The
Board believes that by utilising electronic communication it
delivers savings to the Company in terms of administration,
printing and postage, and environmental benefits through reduced
consumption of paper and inks, as well as speeding up the provision
of information to shareholders.
News updates, Regulatory News and Financial statements can be
viewed and downloaded from the Group's website,
www.abingdonhealth.com/investors. Copies can also be requested
from: Company Secretary, Abingdon Health PLC, York Biotech Campus,
Sand Hutton, York YO41 1LZ.
Share-based payment
The fair value of equity-settled share-based payments to
employees is determined at the date of grant and is expensed on a
straight-line basis over the vesting period based on the Group's
estimate of shares or options that will eventually vest.
1. Revenue
The Group applies IFRS 15 'Revenue from contracts with
customers'. Under IFRS 15, the Group applies the 5-step method to
identify contracts with its customers, determine performance
obligations arising under those contracts, set an expected
transaction price, allocate that price to the performance
obligations, and then recognises revenues as and when those
obligations are satisfied.
Segmental analysis of revenue
Unaudited Unaudited
6 months 6 months Audited
to to 12 months
31 December 31 December to 30 June
2021 2020 2021
GBP'000 GBP'000 GBP'000
Contract development 887 695 1,568
Contract manufacturing 614 610 1,690
Product sales 203 382 8,360
------------- ------------- ------------
Total revenue from contracts
with customers 1,704 7,687 11,618
------------- ------------- ------------
Revenue analysed by geographical market
Unaudited Unaudited Audited
6 months 6 months 12 months
to 31 December to 31 December to 30 June
2021 2020 2021
GBP'000 GBP'000 GBP'000
United Kingdom 1,013 5,022 6,596
United States of America 67 1,823 3,405
Europe 523 557 1,560
Rest of World 101 285 57
---------------- ---------------- ------------
1,704 7,687 11,618
---------------- ---------------- ------------
2. Earnings per share
The calculation of the basic and diluted earnings per share is
based on the following data:
31 December As restated 30 June 2021
2021 31 December
2020
Earnings used in calculation
(GBP'000s) (5,734) (360) (6,973)
Number of shares 279,428,969 248,082,324 262,926,110
Basic EPS (p) (2.05) (0.15) (2.65)
Number of dilutable shares 279,428,969 248,179,612 262,926,110
Diluted EPS (p) (2.05) (0.15) (2.65)
The directors have presented adjusted earnings before the
introduction of deferred taxes which were previously unrecognised
as a measure of ongoing profitability and performance, and before
deduction of share based payment costs and listing costs. This is
to permit better ongoing comparison of underlying trends, as
explained more fully in note 12 to the 30 June 2021 annual
financial statements. The calculated adjusted earnings for the
current period of accounts is as follows:
Adjusted Earnings per Share As restated
6 months 6 months Year
ended ended ended
31 December 31 December 30 June 2021
2021 2020
GBP'000s GBP'000s GBP'000s
Loss after taxation (5,734) (360) (6,954)
Adjusted for:
Previously unrecognised net deferred - (1,832) -
tax asset
Share based payment 100 1,243 1,367
Listing costs - 570 903
Non-recurring legal fees 198 - 257
Non-recurring employee redundancy
costs - - 188
Depreciation and amortisation 639 41 749
Finance costs 34 205 234
Adjusted Earnings (4,763) (133) (3,256)
-------------- ------------- ---------------
As restated
6 months 6 months Year
ended ended ended
31 December 31 December 30 June 2021
2021 2020
Adjusted earnings (GBP000s) (4,763) (133) (3,256)
Number of shares 279,428,969 248,082,324 262,926,110
Adjusted EPS (p) (1.70) (0.05) (1.25)
Number of dilutable shares 279,428,969 248,179,612 262,926,110
Adjusted diluted EPS (p) (1.70) (0.05) (1.25)
3. Impact of Department of Health and Social Care ("DHSC")
Contract on the Statement of Financial Position ("SFP")
Detailed commentary relating to the position with the DHSC was
outlined in our Group financial statements for the year ended 30
June 2021. This can be found in the accounts under note 16 where
the status was updated prior to the signing of the financial
statements on 17 November 2021.
The Group has the following overall carrying amounts on the SFP
as at 31 December 2021 and as at the date of approval of the
interim financial statements:
At At At
31 December 31 December 30 June
2021 (3) 2020 2021
(Excluding (Excluding (Excluding
VAT) VAT) VAT)
GBP'000 GBP'000 GBP'000
Inventories - title with DHSC 4,514 - 3,987
Trade receivables - recharge
of inventories (1) *2,745 - *2,116
Trade receivables - sale of
tests (including profit margin) *4,294 - *4,294
Contract liability (2) (5,936) - (5,308)
------------- ------------- -----------
Net impact of SFP 5,617 - 5,089
------------- ------------- -----------
(1) After deduction of GBP4.0m (excluding VAT) of cash received
from DHSC for purchase of inventories.
(2) This is net of GBP0.9m (excluding VAT) of inventories which
have been utilised in delivering 1 million tests recognised within
Revenue and Trade Receivables in the year ended 30 June 2021.
* These balances are held in Trade receivables including VAT
which total GBP8.4m as at 31 December 2021.
The Group is contractually entitled to late payment interest on
the overdue trade receivables, which is to be calculated at 8%
above base rate. This has not been recognised in the current
period's Group Income Statement, or on the SFP, as it remains
uncertain as to the settlement of this or certainty of ultimate
cash inflows. Any such element will be recognised in full once the
Group's entitlement to receipt is confirmed.
The Directors of the Group are of the opinion that all balances
are recoverable in full and have placed into the public domain a
number of documents and statements which justify and support this
position. These interim financial statements have been prepared on
the explicit assumption that all contractual provisions of the DHSC
contract have been met, and that DHSC will uphold their legal
responsibilities under this contract in respect of full cash
settlement of the contractually due balances. In this outcome, the
Group would receive full settlement of its receivables in cash,
plus late payment interest. The Directors, as at 31 December 2021,
consider that this balance is recoverable within one year and have
therefore presented it as a Debtor due in <1 year. No expected
credit loss provision is held against this balance for the reasons
set out above. Consideration was given as to whether any
discounting of the trade receivable should take place, but, based
on the Effective Interest Rate for the Trade Receivable being zero,
when billed, no discounting has been performed.
However, should any element of the trade receivable become
irrecoverable the Group would be entitled to recover the VAT paid
on that balance, equal to 20% of the net amount not recovered. Any
remaining balance would be recognised as an impairment to the Group
Income Statement, which would be entirely recognised within future
reported profits and losses. Any adjustments to inventories would
likely not impact the Group Income Statement as a result of the
Contract liability shown above, however this may bring certain
elements of those inventories into the Group's ownership. Such
inventories are expected to be utilisable in other product
production by the Group, but in the event that no such utilisation
can occur this may result in an inventory impairment for those
materials.
The Group continues to follow the Dispute Resolution Process
("DRP") set out in the DHSC contract, which as at the date of
approval of the financial statements is taking the form of a
mediation process and a non-binding agreement in principle was
reached in November 2021. Through this process the Group expects
that the monies owed will be substantially recovered, however the
exact timing of this remains uncertain as at the date of approval
of the financial statements. This mediation does not change the
Directors' opinion of the balances recognised on the SFP as at the
30 June 2021 year end or the interim period to 31 December
2021.
4. Share capital
31 December 31 December 30 June
2021 2020 2021
Ordinary share capital
Authorised Number Number Number
Ordinary shares of 0.025p each 121,699,114 95,699,114 95,699,114
Deferred ordinary shares of
0.025p each 182,316,812 182,316,812 182,316,812
------------ ------------ ------------
304,015,926 278,015,926 278,015,926
------------ ------------ ------------
Allotted and fully paid Number Number Number
Ordinary shares of 0.025p each 121,699,114 95,699,114 95,699,114
Deferred ordinary shares of
0.025p each 182,316,812 182,316,812 182,316,812
------------ ------------ ------------
304,015,926 278,015,926 278,015,926
GBP'000 GBP'000 GBP'000
Ordinary shares of 0.025p each 31 24 24
Deferred ordinary shares of
0.025p each 45 45 45
------------ ------------ ------------
76 69 69
------------ ------------ ------------
Reconciliation of movements during the periods:
Ordinary A Ordinary Deferred
Number Number Ordinary
Number
At 1 July 2020 11,406,826 3,916,450 -
Bonus issue of shares funded
by share premium - - 45,969,828
Exercise of share options 1,322,440 - -
Conversion of loan notes 1,159,271 - -
A Ordinary reclassification 390,625 - (390,625)
A Ordinary reclassification 3,916,450 (3,916,450) -
4:1 share split 54,586,836 - 136,737,609
Issue of shares for cash 22,916,666 - -
At 31 December 2020 and 30
June 2021 95,699,114 - 182,316,812
------------ ------------ ------------
Issue of shares for cash 26,000,000 - -
At 31 December 2021 121,699,114 - 182,316,812
------------ ------------ ------------
5. Share options
The following movements on share options have been recognised in
the period:
Number of share options Weighted average exercise
price
31 December 31 December 30 31 December 31 December 30
2021 2020 June 2021 2020 June
2021 2021
Number Number Number GBP GBP GBP
Outstanding
at start of
period 729,467 287,440 287,440 0.5071 0.001 0.001
Granted - 1,145,000 2,049,275 - 0.001 0.2191
Exercised - (1,322,440) (1,322,440) - 0.001 0.0080
Lapsed - - (80,000) - - 0.0010
Forfeited (129,273) (30,000) (204,808) 0.5139 0.001 0.3355
4:1 bonus issue - 240,000 - - 0.00025 -
Outstanding
at end of period 600,194 320,000 729,467 0.5057 0.00025 0.5071
------------ ------------ ------------ ------------ ------------ -------
Exercisable
at end of period - - - - - -
------------ ------------ ------------ ------------ ------------ -------
The options outstanding at 31 December 2021 had an exercise
price ranging from GBP0.00025 to GBP0.70 and a remaining
contractual life of between 2 years 9 months and 9 years 9 months.
The options exist at 31 December 2021 across the following share
option schemes:
Number Exercise Fair value Vesting
of shares price per of scheme period
share (GBP)
Options issued in April 2021 166,682 0.00025 129,137 1 year
SAYE scheme commenced in
March 2021 433,512 0.70 254,941 3 years
600,194 384,078
----------- -----------
The fair value of the scheme represents the reduced fair value
after adjusting for leavers, and is being expensed over the vesting
period. All share options expire 10 years after the date of
issue.
6. Restatement
A restatement has been made to the 31 December 2020 interim
period to correct a provisional fair value of share options which
was subsequently finalised in the audited financial statements for
the year ended 30 June 2021. All options had vested prior to 31
December 2020 and were exercised as part of the Group's admission
to AIM.
The adjustment made to the 31 December 2020 interim period is as
follows:
As previously Adjustment As restated
reported
6 months to 31 December 2020 GBP'000 GBP'000 GBP'000
Operating loss before adjusting
items (55) - (55)
Share-based payment expenses (741) (502) (1,243)
Listing costs (570) - (570)
Operating loss (1,366) (502) (1,868)
Corresponding adjustments have also been recognised within the
Statement of Changes in Equity, in respect of the exercise of these
share options.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
IR FIFIRVTIAFIF
(END) Dow Jones Newswires
March 29, 2022 02:11 ET (06:11 GMT)
Abingdon Health (LSE:ABDX)
Historical Stock Chart
From Mar 2024 to Apr 2024
Abingdon Health (LSE:ABDX)
Historical Stock Chart
From Apr 2023 to Apr 2024
