TIDMABDX
RNS Number : 3016Q
Abingdon Health PLC
17 October 2023
Abingdon Health plc
("Abingdon Health" or "the Company")
Final Results
York, U.K. 17 October 2023: Abingdon Health plc (AIM: ABDX), a
leading international lateral flow contract research (CRO) and
contract development and manufacturing organisation (CDMO),
announces its final results for the year ended 30 June 2023.
Operational highlights (including post-period end)
-- Strong commercial traction and growth from a diverse range of
customers across all aspects of Abingdon's fully integrated CDMO
solution, including contract development, technical transfer,
manufacturing, and regulatory, quality assurance and commercial
support, establishing the platform for further growth.
-- C ontinuing to work with multiple current and new customers
across different contract service projects with projects moving
through the cycle from development to technical transfer and
manufacture.
-- Encouraging growth in the Company's product offering,
including the Abingdon Simply Test(TM) range, with 12 self-branded
products now available and further own brand and third-party
product launches expected.
-- Salistick(TM), the first ever saliva pregnancy test, launched
in 400 Superdrug stores and online, via Amazon and on the Abingdon
Simply Test website in June 2023, followed by its roll-out in 298
Tesco stores and Tesco online in August 2023.
-- Break up of concert party, established at IPO, which
prevented shareholders who were holding approximately 35% of the
issued share capital in Abingdon being able to buy additional
shares who are now able to do so.
Financial highlights
-- Revenue of GBP4.0m (2022: GBP2.8m), with H2 2023 revenue of
GBP2.9m being over 2.5x that of H1 2023 (H1 2023: GBP1.1m)
reflecting increasing commercial momentum over the year.
-- YoY revenue growth of 126% in FY23 when excluding COVID-19-related sales from both years.
-- Adjusted(*) EBITDA loss of GBP2.9m (2022: GBP10.0m loss).
-- Gross margin of 51% (2022: minus 116% or 3% when adjusted for
GBP3.7m stock provisions in FY2022).
-- Cash burn has reduced significantly in H2 2023 compared with
H1 2023 due to the combined impact of revenue growth and the
operational restructuring undertaken in H1 that reduced overhead
costs.
-- Cash as at 30 June 2023: GBP3.2m (2022: GBP2.4m), in-line with the Board's expectations.
-- Net cash inflow from operating activities of GBP0.8m (2022: outflow GBP7.7m).
-- No additional funding requirement expected.
Chris Yates, Chief Executive Officer of Abingdon Health, said:
"With our transition away from COVID-19 activities and focus as a
fully integrated lateral flow CRO/CDMO, the Company has made strong
progress, with a significant increase in our non-COVID-19 revenues
and an increase in our opportunity pipeline.
"I believe that Abingdon is well positioned to meet the growing
lateral flow market, through both our CRO/CDMO offering, and
through our complementary direct sales and distribution platform.
We remain highly focused on continuing to grow our revenues and
reducing our cash-burn in FY24 and beyond."
Enquiries
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)
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 / Phillip Marriage Mob: +44 (0)7980 541 893 / +44 (0)7867
Alice Woodings 984 082
+44 (0)7407 804 654
About Abingdon Health plc
Abingdon Health is a leading lateral flow contract development
and manufacturing organisation ("CDMO") offering its services to an
international customer base across industry sectors that include
clinical, animal health, plant health, and environmental testing.
Abingdon Health has the internal capabilities to take projects from
initial concept through to routine and large-scale manufacturing;
from "idea to commercial success."
The Company's CDMO division 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.
Abingdon Health's Abingdon Simply Test (R) range of self-tests
is an ecommerce platform that offers a range of self-tests to
empowers consumers to manage their own health and wellbeing. The
Abingdon Simply Test (R) ecommerce site offers consumers a range of
information to support them in making informed decisions on the
tests available. In addition, the site provides Abingdon's contract
services customers with a potential route to market for self-tests.
The Abingdon Simply Test (R) range is also sold through
international distributors and through other channels in the UK and
Ireland such as pharmacy chains.
Founded in 2008, Abingdon Health is headquartered in York,
England.
For more information visit: www.abingdonhealth.com
Chairman & CEO Joint Statement
We are pleased to report a significant improvement in the
trading performance of Abingdon Health over the financial year
ended 30 June 2023. The refocusing of the business away from
COVID-19 activities, which was undertaken from the summer of 2022
onwards, has started to yield growth in customer projects and
revenues. We believe there is significant opportunity within the
lateral flow market and expect to see continued strong revenue
growth in 2024 and beyond.
We are now seeing growth in the market across a broad range of
other (non-COVID-19) applications. Our integrated Contract Research
Organisation ("CRO") and Contract Development and Manufacturing
Organisation ("CDMO") model is resonating well with a diverse
customer base across clinical (both self-testing and point of
care), pharmaceutical, animal health, food, plant pathogen and
environmental testing. This growth is being driven in part by
reduced barriers to adoption for lateral flow technology ("LFT")
due to the widespread awareness of LFT seen during the COVID-19
pandemic. We remain confident that Abingdon Health's expertise in
the lateral flow industry and our in-house development and
manufacturing platform, will continue to lead to sustainable
revenue growth in coming years. Our key objective remains that of
moving the Company to a positive cashflow position and we are
making solid progress towards achieving this objective.
During the financial year we successfully resolved the remaining
COVID-19 legal challenges faced, and restructured the business to
enable it to focus on non-COVID-19 CRO/CDMO business activities. In
July 2022 we received payment of GBP6.3m from the Department of
Health & Social Care ("DHSC"). This was in settlement of the
outstanding payments and invoices payable by DHSC for lateral flow
tests and component stock for contracts entered into during the
COVID-19 pandemic. In October 2022 a judicial review at the High
Court of Justice dismissed in their entirety all the claims
relating to the three contracts the DHSC had entered into with
Abingdon Health for COVID-19 antibody testing. Successfully
resolving these issues has allowed the management team to focus
fully on executing its strategy and driving commercial performance.
From a standing start in the summer of 2022, with most activities
in the prior year being COVID-19 related, we have seen a
significant increase in our non-COVID-19 commercial activities and
opportunity pipeline.
We strongly believe that we are at the start of a paradigm shift
in the use and application of rapid testing across a wide range of
applications and that Abingdon Health is well positioned to support
customers in bringing new, innovative products to market across a
range of sectors. We are proud to be working with some of the
leading innovators in our sector and our focus remains on expanding
our customer base and driving products through development,
manufacturing and to commercial success.
Our strategy
Our mission at Abingdon Health is to improve life by making
rapid results accessible to all. We achieve this by supporting our
customers, as an integrated lateral flow CRO & CDMO, in
developing and manufacturing lateral flow tests across a range of
sectors including human health, such as infectious disease testing,
animal health, plant pathogen and environmental testing.
Our technology focus continues to be based on lateral flow. The
lateral flow market is large and growing with recent market
estimates forecast that the lateral flow market will increase by
150 percent between 2022 and 2032 to reach a market size of $11.7bn
by 2032 (Source: Fact.MR(1) ). Whilst reduced barriers to adoption
of lateral flow technology are a key driver, there are other
factors at play. For example, there is a drive towards
decentralisation of testing, both in the clinical market with a
focus on personalised healthcare and the empowerment of patients to
manage their own health, and in the animal health market where
testing is being transitioned from the laboratory to the farm and
the field. Lateral flow technology is simple and cost-effective, it
is well-understood by users and seen as a valid alternative to
laboratory testing in many cases. Due to these strengths, we are
seeing growth across clinical (both point of care and
self-testing), animal health, food testing, plant pathogen and
environmental testing.
Abingdon Health's focus within the lateral flow market is
two-fold:
Lateral flow CRO/CDMO
Firstly, we remain committed to becoming a leading lateral flow
CRO/CDMO. The CRO and CDMO business model, well-established in the
pharmaceutical industry, has direct application to the medical
diagnostics market, and Abingdon Health's CRO/CDMO team have the
capability to take a project from "idea to commercial success". Our
contract services include R&D, optimisation and scale-up,
technical transfer and manufacturing as well as added-value
services such as reagent development, regulatory and clinical trial
support, and packaging design and packaging service provision. The
ability to offer this range of outsourced options to our customer
base is resonating well. We are focused on driving greater
awareness of the capabilities of, and innovation in, lateral flow
technology through a regular cadence of blogs and articles and we
also attend third party workshops and conferences to promote the
use of lateral flow technology and share knowledge. We intend to
continue to expand our contract service provision, through both
investment in the development of new service lines and through
acquisition of complementary businesses.
Self-testing lateral flow sales & distribution
Secondly, we are building a route to market initially, within
Europe, for lateral flow self-tests. We believe that COVID-19 has
been a catalyst for the expansion of self-testing across a range of
other clinical areas. Our route to market will be a combination of
both direct sales, via Amazon or through our website
www.abingdonsimplytest.com , and through retail and distribution
agreements. It is our intention to be a provider of choice to both
our CDMO customers and to other parties who are looking for one
partner to cascade their lateral flow tests across Europe. We have
established our own self-test lateral flow brand, Abingdon Simply
Test(TM) which currently includes 12 self-test products which we
intend to expand to provide an increasingly comprehensive product
portfolio to meet the needs of retailers and distributors.
Again, we will focus on organically developing our distribution
platform but there may be the opportunity to accelerate this
strategy through acquisition. We very much see our lateral flow
sales & distribution platform as complementary to our CRO/CDMO
business. It is intended to provide support to a number of our CDMO
customers who are developing self-tests, with a ready-made
route-to-market to drive early commercial adoption. The first such
example was the launch in June 2023 of Salistick(TM), the first
ever saliva pregnancy test in the UK, on behalf of our CDMO
customer Salignostics Limited. We were pleased to launch this
online at Amazon, on our own website, www.abingdonsimplytest.com
and in 400 Superdrug stores and online at Superdrug.com; with the
addition of Tesco post-year end instore and online.
Performance in the year
We are pleased with the strong commercial progress made in FY23
following the decision to refocus the business in summer 2022. The
Company's revenues increased to GBP4.0m, 43% higher than FY22
(GBP2.8m) and excluding COVID-19 revenues, FY23 revenues were 126%
higher, underlining the strong transition to a sustainable CRO/CDMO
business model. Revenue for H2 FY23, was GBP2.9m which was more
than 2.5x that of H1 FY23 (GBP1.1m), with the increase coming from
several new projects commencing from late H1 2023.
Our CRO/CDMO business grew 52% year-on-year and excluding
COVID-19, CRO/CDMO revenues grew 155% year-on-year. This strong
revenue traction was from a diverse range of customers across all
aspects of our fully integrated CRO/CDMO solution, including
contract development, technical transfer, manufacturing,
regulatory, quality assurance and commercial support. This growth
augurs well for future financial years as our model is based on
bringing customers through the development process and into
manufacturing and hopefully keeping these customers as
manufacturing customers for the long-term. Therefore, the growth in
customers we have seen during FY23 will create a platform for
revenue growth in our CRO/CDMO business for FY24 and beyond.
We were also pleased to see our Product business revenues grow
strongly during FY23 with 17% year-on-year growth when excluding
COVID-19 and retired products from each year. FY23 was the first
year of trading of our newly established Abingdon Simply Test(TM)
brand and we were pleased with the progress made in growing the
product range as well as establishing a number of new retail
customers and distributors. Again, in FY24 we will build on this
progress with continued expansion of our product range and sales
and distribution platform to generate further Product sales
growth.
Current Activity and Pipeline
We are continuing to see good momentum across both our CRO/CDMO
and Product divisions in the current financial year.
Within the CRO/CDMO division, we continue to grow our contract
development customer base and have signed a number of new
Development contracts and Technical Transfer contracts in the
current financial year to date (since July 2023). We have also seen
a number of our existing contracted projects transition from
development into technical transfer and from technical transfer
into manufacturing. One such example is Loop Diagnostics
("LoopDx"), where we have worked closely with the LoopDx team for
over 12 months to support the development of an early diagnostic
test for sepsis. This product is targeting a significant unmet need
and we are working closely with the LoopDx team to transfer the
product into manufacturing, and will support them as they work
through their clinical trials and commercial roll-out.
In addition to our new and existing customer base our commercial
pipeline remains robust, and we continue to see good opportunities
to expand our CRO/CDMO customer base for the foreseeable future.
Based on this forecast growth in our CRO/CDMO customer base we are
continuing to grow our development team to support this expansion
in activity.
The Product division has had an encouraging start to FY24, and
we were pleased to announce in August 2023 that the Salistick(TM)
product was launched in 298 of Tesco's larger stores and also
online at Tesco.com. We now have two of the UK's leading retailers
stocking the product and we continue to work on expanding the sales
and distribution network for Salistick(TM) and our Abingdon Simply
Test(TM) range both in the UK and into the EU. We will launch a
rebranded Abingdon Simply Test(TM) range at the Pharmacy Show, a
national event for community and primary care pharmacy
professionals, in October 2023.
Concert Party
Post-year end, on 30 August 2023, we announced the break-up of a
concert party established at IPO which effectively prevented
shareholders who were holding approximately 35% of the issued share
capital in Abingdon from being able to buy additional shares. Now
that this 'IPO concert party' has been divided into three smaller
concert parties, the holders within each separate concert party may
now buy additional shares.
Team
During the financial year we reduced our average staff numbers
from 130 to 82, which was a reflection of the full year impact of
the redundancies in FY22. As at 31 August 2023 there were 82
employees within Abingdon Health. Due to the number of
opportunities in the Contract Development pipeline, the number of
heads in this area will increase by a small number in the coming
months as projects become active. This will enable the Company to
deliver more projects in this area.
We would like to thank all of the Abingdon Health team for their
efforts in the last year, which resulted in significant revenue
growth for the Business.
Governance and People
Mary Tavener is the senior-independent non-executive director,
having been appointed in November 2020 prior to listing on AIM.
Abingdon Health's other non-executive director is Dr Chris Hand who
is a co-founder of Abingdon Health and non-executive chairman, and
who retains a significant shareholding in the Company as noted in
the Directors' Report.
Our Audit Committee and Remuneration Committee currently
comprises Mary Tavener (Chair) with Chris Hand (non-executive
chairman). The executive directors Chris Yates and Melanie Ross are
invited to attend as required from time-to-time. The Board has
concluded that at this time the Group does not currently require a
Nominations Committee but will review this assessment on a regular
basis including discussing the matter with its Nominated
Advisor.
The Board remains focused on ensuring its own effectiveness and
that of the governance processes throughout the Group, and that
these governance structures remain fit for purpose as the Group
develops and grows over time. Mary Tavener is Abingdon Health's
only independent non-executive director and, as such, the Board's
current composition does not comply with the requirements for a
minimum of two independent non-executive directors under the QCA
Corporate Governance Code, being the corporate governance code that
the Company has chosen to apply.
The Board continues to believe, however, that its current
composition is appropriate for the current size of the business and
will continue to review its structure periodically as the needs of
the business change.
Outlook & Funding
The Board believes it has no current requirement for additional
funding. Cash at the end of the financial year was GBP3.2m. We
believe we have sufficient cash resources to fund progress beyond
12 months from the signing date of the accounts, with our priority
continuing to be moving the Company to a positive cashflow
position.
Our strategic focus is on growing our CRO/CDMO business and
expanding the reach of our Abingdon Simply Test(TM) product range.
We will continue to focus on growing our CRO/CDMO customer base and
support our customers in bringing their innovative products to
market. As part of this strategy we will continue to expand our
CRO/CDMO service offering to provide a comprehensive package of
solutions that allow us to bring on customers' products through the
journey "from idea to commercial success". We will also continue to
grow our European distribution platform for self-tests both through
increasing the number of retailer and distribution agreements in
place and secondly through broadening the self-test product range
including those developed in partnership with our CRO/CDMO
customers.
Our key financial priorities are to grow our revenues and reduce
our cash-burn through continued close cost management. To this end
we will continue to focus our team's activities on CRO/CDMO
business and near-term revenues with own-product development being
given less priority until we are closer to break-even.
As a CRO/CDMO focused on lateral flow technology with a
well-established track record of bringing products from "idea to
market" we believe we are well-placed to support a broad range of
customers across the clinical (point of care & self-test),
pharmaceutical, animal health, food, plant pathogen and
environmental testing markets. We believe our full-service contract
service proposition strongly resonates with customers and we look
forward to continuing to support our customers in bringing their
innovative tests to market.
We would like to thank all our employees for their hard work,
dedication and commitment during the past year as we returned to
growth. We are confident that our contract services customer base
and our current growing pipeline means we are well positioned to
grow our business and deliver shareholder value going forward. We
would like to thank shareholders for their support.
(1) Lateral Flow Assays Market Size to Surpass US$ 11.7 Billion
(globenewswire.com)
Operating and Financial Review
Revenue and Margins
The Business delivered strong revenue growth in the period,
growing 43% to GBP4.0m (2022: GBP2.8m), and increased by 126% when
stripping out COVID-19 revenue from both fiscal years.
Revenue by Geographical Market
2023 2022
Geographical Market GBPm % * GBPm %* (Decrease)/Growth
----------------------- ------ ----- ------ ----- ------------------
UK 1.3 32% 1.4 50% (8)%
USA/Canada 0.8 21% 0.2 6% 373%
Europe 1.7 41% 1.0 38% 55%
ROW 0.2 5% 0.2 6% 33%
Total 4.0 100% 2.8 100% 43%
----------------------- ------ ----- ------ ----- ------------------
* note - percentages are calculated on exact totals and not the
rounded amounts shown above
Revenue by Operating Segment
2023 2022 (Decrease)/
Operating Segment GBPm %* GBPm %* Growth
------------------------ ------ ----- ------ ----- ------------
Products 0.4 10% 0.4 16% (10)%
Contract Manufacturing 1.1 26% 1.1 40% (6)%
Contract Development 2.3 57% 1.3 44% 85%
Regulatory 0.3 7% 0.0 0% -
Total 4.0 100% 2.8 100% 43%
------------------------ ------ ----- ------ ----- ------------
*note - percentages are calculated on exact totals and not the
rounded amounts shown above
Contract Manufacturing (manufacture of products for third
parties) fell 6% over the period. However, when adjusting for
COVID-19 related sales, Contract Manufacturing grew 6%.
Product sales (own products) fell by 10% in the relevant period.
When excluding COVID-19 sales and Seralite (discontinued products)
sales increased 17%. Sales of products available through the
Abingdon Simply Test(TM) website grew in line with
expectations.
Contract Development (R&D activity based on a fee for
service and manufacturing of validation batches) increased 85%
year-on-year, and 445% when excluding COVID-19 sales which made up
over 65% of revenue in the previous fiscal year.
Regulatory Affairs, charged as a fee-for-service model, is a new
revenue stream that launched in 2022, and offers wrap around
services that range from acting as UK representative for our
contract manufacturing customers, to full regulatory support during
design, development, and submission for regulatory approval. It
encompasses ongoing regulatory support once the products are in the
market or any combination of the above services. This service
offering enhances the CRO/CDMO model to current and future
customers.
Gross margin in the financial year was 51% (2022: minus 116%
including underlying stock provision). Gross margin for FY23 is
also significantly higher than the underlying gross margin for FY22
which, when adjusted for the GBP3.7m in stock provisions, was 3%.
This increase is in part due to the restructuring activities in the
previous year, as well as the strong growth in Contract Development
revenue streams.
Adjusted EBITDA
Abingdon Health uses adjusted EBITDA as a measure, as this
excludes items which can distort comparability as well as being the
measure of profit that most accurately reflects the cash generating
activities of the Company. The reconciliation of these adjustments
is as follows:
Year Ended Year Ended
30 June 2023 30 June 2022
GBP'000 GBP'000
Adjusted EBITDA (2,893) (9,997)
Share based payment expense (28) (231)
Impairment charges (86) (7,192)
Gain on Lease Modification 390
Non-recurring legal and professional
fees (33) (688)
Non-recurring employee costs (162) (198)
Other Exceptional Costs (88)
DHSC related costs (1,585)
Net Finance income/(costs) 17 (65)
-------------- --------------
Statutory EBITDA (2,883) (19,956)
-------------- --------------
Amortisation (29) (121)
Depreciation (644) (1,516)
-------------- --------------
Loss before Tax (3,556) (21,593)
-------------- --------------
Adjusted EBITDA loss in the period was GBP2.9m (2022: loss
GBP10.0m), a significant decrease on the prior year driven by both
increases in the revenue and cost reductions year on year.
Headcount in the Group was an average of 82 (2022: 130). Staff
costs overall reduced to GBP4.0m (2022: GBP5.3m) reflecting the
full year impact of the reduction in heads implemented during the
previous year, and the savings associated with further leavers
early in H1. Exceptional costs of GBP0.2m were incurred in the year
in relation to these leavers. Headcount at the end of the year was
82.
Professional costs in the year were GBP0.4m (2022: GBP1.5m).
Excluding the non-recurring and DHSC related costs in the previous
year, FY22 costs were GBP0.6m, illustrating the underlying
improvement of GBP0.2m results from a reduction in external
consultancy and professional advisory services.
Premises costs were GBP0.6m in the year (2022: GBP1.0m), with
underlying costs being GBP0.9m when adjusted for the one off
GBP0.3m gain (in exceptionals) due to a release of the Right of Use
asset resulting from releasing the contractual lease obligations on
space at the Company's York site during the year as laboratories
and manufacturing premises were rearranged to improve efficiency.
This, as well as the continued mothballing of the Doncaster site,
saw a reduction in rent and other associated costs by GBP0.2m. This
saving was partially offset by an increase in the utility costs of
the business of GBP0.1m.
Marketing and Travel costs increased to GBP0.2m (2022: GBP0.1m)
as travel bans were lifted and the Company was able to attend more
exhibitions and visit more customers in person. Increased spend was
also incurred on website costs as we launched the Abingdon Simply
Test(TM) own label product range.
Cash Resources
Net cash inflow from operating activities was GBP0.9m (2022:
outflow GBP7.7m). A reduction in payables, stock and the unwinding
of the DHSC contract stock and payable amounts following the
satisfactory conclusion of the dispute with DHSC were the main
drivers of the improvement.
The net proceeds from financing activities were from a drawdown
against an existing Innovate UK product development loan
arrangement.
Altogether this represented a net cash increase of GBP0.8m when
compared to the prior year, and a closing cash position of GBP3.2m
(2022: GBP2.4m).
Financing
In July 2022 the Company received GBP6.3m cash in full
settlement from the DHSC of the disputed amounts.
Key Performance Indicators ("KPIs")
The Company considers various factors when determining the KPI
measures and these evolve as the business changes to meet differing
market demands to ensure continued success. In this financial year
the KPI measures focused on revenue growth, reduction in (adjusted)
EBITDA loss and reduction in the cash burn of the business. These
metrics are felt to be the most important to ensure that the
business achieves cash breakeven and profitability. Other internal
measures introduced in the new financial year will focus on
contract progression from Development to Manufacturing, as well as
the number of tests manufactured per FTE.
Earnings per Share
Earnings per share was a loss of 1.14p in the period and
adjusted EPS was a loss of 0.95p in the same period.
EPS
Basic EPS (1.14)p
Loss attributable to Shareholders GBP(3.56)m
Add: Share Based Payments GBP0.03m
Add: Nonrecurring legal fees GBP0.03m
Add: Nonrecurring employment costs GBP0.16m
Add: Impairment charge GBP0.09m
Add: Depreciation and Amortisation GBP0.67m
Deduct: Finance Costs GBP(0.02)m
Deduct: Lease modification GBP(0.39)m
Add: Other exceptional
costs GBP0.09m
Adjusted Loss attributable to Shareholders GBP(2.89)m
Adjusted EPS (0.95)
--------------------------------------------- -----------
Consolidated Statement of Comprehensive Income
For the Year Ended 30 June 2023
Year ended Year ended
30 June 30 June
2023 2022
GBP'000 GBP'000
Revenue 4,045 2,835
Cost of sales (1,970) (6,427)
------------- -----------
Gross profit/(loss) 2,075 (3,592)
Administrative expenses (5,220) (6,645)
Other income 252 240
Adjusted EBITDA (before adjusting
items) (2,893) (9,997)
Amortisation (29) (121)
Depreciation (644) (1,516)
Impairment charges (86) (7,192)
Share based payment expense (28) (231)
Non-recurring legal, professional
and fundraising fees (33) (688)
Non-recurring redundancy costs (162) (198)
Lease Modification 390 -
Other exceptional costs (88) -
DHSC exceptional costs - (1,585)
-------------------------------------- ------------- -----------
Operating loss (3,573) (21,528)
Finance income 89 4
Finance costs (72) (69)
------------- -----------
Loss before taxation (3,556) (21,593)
Taxation credit 105 331
Loss for the financial period (3,451) (21,262)
------------- -----------
Other comprehensive income for the
year net of tax - -
------------- -----------
Total comprehensive loss for the
year (3,451) (21,262)
------------- -----------
Attributable to:
Equity holders of the parent (3,451) (21,262)
------------- -----------
Basic losses per share (pence) (1.14) (7.29)
------- -------
Diluted losses per share (pence) (1.14) (7.29)
------- -------
Consolidated Statement of Financial Position
As at 30 June 2023
30 June 30 June
2023 2022
GBP'000 GBP'000
Non-current assets
Goodwill - -
Other intangible assets 90 36
Property, plant, and equipment 1,209 1,777
1,299 1,813
Current assets
Inventories 329 534
Trade and other receivables 1,147 7,844
Income tax receivable 50 183
Cash and cash equivalents 3,236 2,397
--------- ---------
4,762 10,958
--------- ---------
Total assets 6,061 12,771
--------- ---------
Current liabilities
Trade and other payables 2,033 5,059
Borrowings - 115
Obligations under leases 87 150
2,120 5,324
Non-current liabilities
Borrowings 708 435
Obligations under leases 224 580
932 1,015
Total liabilities 3,052 6,339
Net assets 3,009 6,432
--------- ---------
Equity
Attributable to the owners of the
parent:
Share capital 76 76
Share premium 30,309 30,309
Share based payment reserve 80 153
Accumulated deficit (27,456) (24,106)
--------- ---------
Total equity 3,009 6,432
--------- ---------
Consolidated Statement of Changes in Equity
For the Year Ended 30 June 2023
Share Share Share Accumulated Total equity
Capital premium based deficit attributable
payment to owners
reserve of the parent
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 1 July
2021 69 24,180 44 (2,966) 21,327
Year ended 30 June
2022:
Profit and loss - - - (21,262) (21,262)
--------- --------- --------- ------------ ---------------
Total comprehensive
loss for the year - - - (21,262) (21,262)
Other movements:
Share option expense - - 231 - 231
Share options exercised - - (10) 10 -
Share options cancelled - - (112) 112 -
Issue of shares 7 6,493 6,500
Cost of issue of shares - (364) - - (364)
Balance at 30 June
2022 76 30,309 153 (24,106) 6,432
--------- --------- --------- ------------ ---------------
Year ended 30 June
2023:
Profit and loss - - - (3,451) (3,009)
Total comprehensive
loss for the year - - - (3,451) (3,009)
Other movements:
Share option expense - - 28 - 28
Share options exercised - - (4) 4 -
Share options cancelled - - (97) 97 -
Balance at 30 June
2023 76 30,309 80 (27,456) 3,009
--------- --------- --------- ------------ ---------------
Consolidated Statement of Cash Flows
For the Year Ended 30 June 2023
30 June 30 June
2023 2022
GBP'000 GBP'000
Cash flows from operating activities:
Loss for the year (3,451) (21,262)
Adjustments for:
Other income (252) (240)
Net finance (income)/costs (17) 65
Tax charge/(credit) (105) (331)
Amortisation and impairment of intangible
assets 29 1,270
Share based payments 28 231
Depreciation and impairment of property,
plant and equipment 730 7,559
Loss on disposal of property, plant
and equipment - 240
Impairment of inventories (including
DHSC) - 9,676
Changes in working capital:
Decrease/(increase) in inventories 205 (2,322)
Decrease in trade and other receivables 6,647 2,134
(Decrease) in trade and other payables (3,180) (5,170)
Cash generated from/(used in) operations 634 (8,150)
Interest paid (including leases) (48) (58)
Income taxes received 325 323
Insurance claim proceeds 2 146
Net cash inflow / (outflow) from
operating activities 913 (7,739)
Interest received 89 4
Purchase of intangible assets (82) (78)
Purchase of property, plant and equipment (75) (682)
Proceeds on disposal of property, 1 -
plant and equipment
Net cash used in investing activities (68) (756)
-------- ---------
Consolidated Statement of Cash Flows
For the Year Ended 30 June 2022
30 June 30 June
2023 2022
GBP'000 GBP'000
Financing activities
Proceeds from issue of own shares
(net of costs *) - 6,136
Cash withheld for SAYE scheme (1) (7)
Proceeds from new bank loans and
borrowings 250 167
Payment of loans (115) (125)
Payment of lease obligations (141) (144)
Payment on settlement of accrued
lease obligations - (112)
Net cash (used in)/generated from
financing (7) 5,915
-------- --------
Net increase/(decrease) in cash
and cash equivalents 839 (2,580)
Cash and cash equivalents at beginning
of the year 2,397 4,977
-------- --------
Cash and cash equivalents at end
of the year 3,236 2,397
======== ========
Recognised in the Statement of
Financial Position as:
Cash at bank and in hand 3,236 2,397
Overdrafts - -
-------- --------
3,236 2,397
-------- --------
* Net of costs of GBPnil (2022 - GBP364,000) set against the
share premium account only.
Notes to the Financial Statements
For the Year Ended 30 June 2023
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") incorporates 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.
Basis of preparation
The financial information set out in this preliminary
announcement does not constitute statutory accounts as defined by
section 434 of the Companies Act 2006.
The financial information for the year ended 30 June 2023 and
the year ended 30 June 2022 does not constitute the Company's
statutory accounts for those years. Statutory accounts for the year
ended 30 June 2022 have been delivered to the Registrar of
Companies. The statutory accounts for the year ended 30 June 2023
were approved by the Board on 16 October 2023 and will be delivered
to the Registrar of Companies in due course. The statutory accounts
for the period ended 30 June 2023 will be posted to shareholders at
least 21 days before the Annual General Meeting and made available
on the Group's website .
The Group's statutory financial statements for the year ended 30
June 2023, from which the financial information presented in this
announcement has been extracted, were prepared in accordance with
international accounting standards in conformity with the
requirements of the Companies Act 2006. The financial statements
have been prepared on the historical cost basis with the exception
of certain items which are measured at fair value as disclosed in
the principal accounting policies set out in the Group's Annual
Report. These policies have been consistently applied to all years
presented.
The preparation of financial statements in conformity with IFRS
requires the use of estimates and assumptions that affect the
reported amounts of assets and liabilities at the date of the
financial statements and the reported amounts of revenues and
expenses during the reporting period. Although these estimates are
based on management's best knowledge of the amount, event or
actions, actual results ultimately may differ from these
estimates.
The auditor's reports on the accounts for 30 June 2023 and 30
June 2022 were unqualified and did not contain a statement under
498(2) or 498(3) of the Companies Act 2006.
Judgements and key sources of estimation uncertainty
The preparation of the financial statements in conformity with
IFRS requires management to make judgments, 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.
Critical judgements
The following judgements (apart from those involving estimates)
have had the most significant effect on amounts recognised in the
financial statements:
Right of use asset recognition
Management have assessed each lease liability for recognition
under IFRS 16 and recognised a right of use asset where
appropriate.
One lease includes a material component of service charge by
comparison to the headline rental payments, where this service
charge partially covers shared areas and facilities which would
normally form part of a rental price. The Directors have applied
judgement in splitting this service charge into rent-like
components of GBP24,000 per annum (which qualify for capitalisation
as a right of use asset), utility fees of GBP104,000 per annum, and
ongoing shared costs of GBP72,000 per annum (which the latter two
do not qualify for capitalisation as a right of use asset, nor
recognition as a lease liability). The lease runs for a 7-year term
and the total value of rent-like components capitalised (prior to
amortisation) is GBP161,000.
Revenue recognition
In line with IFRS 15 management are required to determine
appropriate revenue recognition points for all revenue streams.
Where multiple contracts are entered into with a single
counterparty any instalment payments are not considered to be a key
indicator of the satisfaction of a performance obligation, although
linked contracts with a counterparty are considered in conjunction
when identifying the appropriate point for revenue recognition.
Key sources of estimation uncertainty
The estimates and assumptions which have a significant risk of
causing a material adjustment to the carrying amount of assets and
liabilities are as follows:
Valuation and impairment of cash generating units (including
goodwill)
Goodwill is tested annually for impairment as part of a cash
generating unit ("CGU"). The test considers future cash flow
projections of each CGU on a group basis, as the group as a whole
is considered to be a single CGU. In the current year, two tests
have been performed, a discounted cash flow model and a
value-in-use model, which have both approximated to the same
value.
Where the discounted cash flows are less than the carrying value
of the CGU, an impairment charge is recognised for the
difference.
Share based payments
The determination of the fair values of EMI and SAYE options has
been made by reference to the Black-Scholes model.
Going concern
Since the end of the last financial year, the monies were
received from the DHSC, and outstanding liabilities in relation to
the DHSC were all settled. To reduce the cashburn of the group, the
management team undertook a restructuring of the group to reduce
headcount and operational infrastructure in line with the
anticipated revenue generating activities. As part of this exercise
the group focused its commercial activities in its CRO/CDMO model
and specifically moved away from COVID-19 projects towards a
broader lateral flow contract proposition. The impact of this
restructuring has been a significant increase in the number of
contract service customers combined with a reduced operational cost
base which has led to a reduction in the groups cashburn. As
discussed in the Strategic Report, this model is continuing to
progress well and the group has sufficient visibility of commercial
opportunities to give confidence in the pipeline revenue and the
base model in the financial forecasts.
The Directors have prepared cash flow forecasts under a number
of scenarios, that being the budget, sensitised to increase costs
in areas such as headcount and additional inflationary pressure,
and also other plausible downside scenarios including little to no
growth in revenues for the next fiscal year.
These forecasts cover a period of at least 12 months from the
expected date of approval of the financial statements and the
Business continues to evaluate financial forecasts on a regular
basis.
The models are underpinned by a high percentage of forecast
revenues up to December 2024 being based on committed
milestone-based contracts. The focus of the group remains on
expanding its fee for service CRO/CDMO model and any increase in
headcount and/or operational footprint will be on the basis of an
increase in the number of secured contracts, revenue and cash
inflows. At 30 June 2023 the bank balance was GBP3.2m. Cash burn on
a monthly basis continues to reduce. The Board is satisfied that
based on the above and the current forecasts, there is sufficient
headroom and concluded that it is appropriate to prepare the Annual
Report and Accounts on a going concern basis.
Non-recurring income and costs
The Group seeks to highlight certain items as exceptional
operating income or costs. These are considered to be exceptional
in size, frequency and/or nature rather than indicative of the
underlying day to day trading of the Group. These may include items
such as acquisition costs, restructuring costs, obsolescence costs,
employee exit and transition costs, legal costs, profits or losses
on the disposal of subsidiaries, and loan impairments. All of these
items are charged or credited before calculating operating profit
or loss.
The Directors apply judgement in assessing the particular items,
which by virtue of their size and nature are disclosed separately
in the Statement of Comprehensive Income and the notes to the
financial statements as non-recurring income and costs. The
Directors believe that the separate disclosure of these items is
relevant to understanding the Group's financial performance.
Guarantees, commitments and contingent liabilities
At 30 June 2023, the Group and Company had no contingent
liabilities (2022 - none). The borrowings disclosed in note 20,
were secured over the assets of the Group including the
Company.
At 30 June 2023 the Group had contracted for capital commitments
of approximately GBPnil (2022 - GBPnil). These amounts have not
been reflected in the financial statements.
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
2023 2022
GBP'000 GBP'000
Product sales 418 465
Contract manufacturing 1,059 1,124
Contract development 2,301 1,246
Regulatory 268 -
Total revenue from contracts with customers 4,045 2,835
-------- --------
Revenue analysed by geographical market
2023 2022
GBP'000 GBP'000
United Kingdom 1,307 1,417
Europe (excluding Belgium) 1,179 334
Belgium 479 738
USA & Canada 861 182
Rest of the World 219 164
-------- --------
4,045 2,835
-------- --------
All revenue received in the current and comparative years has
been recognised at a point in time in accordance with the Group's
revenue recognition policy.
2. Taxation
2023 2022
GBP'000 GBP'000
Current tax
UK Corporation tax on profits for the current 46 -
year
Adjustments in respect of prior years (151) (331)
-------- --------
Total current tax (105) (331)
-------- --------
Deferred tax
Origination and reversal of temporary differences - -
Impact of change in tax rates - -
-------- --------
Total deferred tax - -
-------- --------
Total tax charge/(credit) (105) (331)
-------- --------
The charge for the year can be reconciled to the profit per the
Consolidated Statement of Comprehensive Income as follows:
2023 2022
As
A
GBP'000 GBP'000
(Loss) before taxation (3,608) (21,593)
------- --------
Expected tax (credit)/charge based on a corporation
tax rate of 20.5% (2022 - 19%) (740) (4,103)
Tax effect of expenses that are not deductible in
determining taxable profit (55) 717
Depreciation on assets not qualifying for tax allowances - 316
Change in unrecognised deferred tax asset 851 3,072
Timing differences between depreciation and capital
allowances (5) -
Share based payments 6 44
Prior year adjustment (151) (331)
Research and development (20) -
Tax movement on provisions (5) -
Other differences 14 (46)
Total tax charge/(credit) (105) (331)
------- --------
The UK corporation tax rate was 19% until 1 April 2023 when it
increased to 25%, giving a hybrid tax rate of 20.5% for the
year.
Deferred tax balances at the reporting date are measured at 25%,
which is the effective rate in place (2021: 25%; 2020: 19%).
4. Dividends
No dividends were paid in the current or prior year.
5. Earnings per share
The calculation of the basic and diluted earnings per share is
based on the following data:
2023 2022
Earnings used in calculation (GBP'000) (3,451) (21,262)
Weighted average number of ordinary
shares 304,033,363 291,622,638
Basic EPS (pence/share) (1.14) (7.29)
Weighted average number of dilutable
shares 305,820,420 291,622,638
Diluted EPS (pence/share) (1.14) (7.29)
The diluted EPS is the same as the Basic EPS as there is a loss
for each of the periods concerned.
In each period there were share options outstanding. As at 30
June 2023, options which are out of the money are excluded from the
calculation of the weighted average number of dilutable shares.
The Directors use adjusted earnings before certain non-recurring
costs ("Adjusted Earnings") as a measure of ongoing performance and
profitability. These non-recurring costs are presented as separate
items on the face of the Consolidated Income Statement.
The calculated Adjusted Earnings for the current and comparative
periods are as follows:
2023 2022
GBP'000 GBP'000
Loss before taxation attributable to equity
owners of the Parent (3,556) (21,593)
Share-based payment costs 28 231
Impairment charges 86 7,192
Non-recurring legal fees 33 688
Non-recurring employee redundancy costs 162 198
Exceptional costs relating to settlement of
DHSC contract - 1,585
Depreciation and amortisation 672 1,637
Net finance (income) / cost (17) 65
Lease modification (390) -
Other exceptional costs 88 -
Adjusted Earnings (2,894) (9,997)
-------- ---------
Basic and diluted Adjusted Earnings per share
(pence/share) (0.95) (3.43)
-------- ---------
The calculation of Adjusted Earnings is consistent with the
presentation of Adjusted Earnings before Interest, Tax,
Depreciation, and Amortisation, as presented on the face of the
Statement of Comprehensive Income. This adjusted element also
removes non-recurring items, as explained further in note 5. The
Directors have presented this Alternative Performance Measure
("APM") because they feel it most suitably represents the
underlying performance and cash generation of the business, and
allows comparability between the current and comparative period in
light of the rapid changes in the business (most notably its
admission to AIM and associated costs), and will allow an ongoing
trend analysis of this performance based on current plans for the
business. Tax is excluded from this APM because the Group has
significant tax losses and so the tax charge is not representative
of the cash generated.
6. Share capital and reserves
2023 2022
Ordinary share capital
Authorised Number Number
Ordinary shares of 0.025p each 121,716,822 121,711,614
Deferred shares of 0.025p each 182,316,812 182,316,812
------------ ------------
304,033,634 304,028,426
------------ ------------
Allotted and fully paid Number Number
Ordinary shares of 0.025p each 121,716,822 121,711,614
Deferred shares of 0.025p each 182,316,812 182,316,812
------------ ------------
304,033,634 304,028,426
GBP'000 GBP'000
Ordinary shares of 0.025p each 31 31
Deferred shares of 0.025p each 45 45
76 76
------------ ------------
On 19 July 2022 there was an exercise of options over 5,208
Ordinary shares of 0.025 pence each.
Reconciliation of movements during the year:
Number
At 1 July 2022 304,028,426
Exercise of share options 5,208
At 30 June 2023 304,033,634
------------
Reserves of the Company represent the following:
-- Share capital - Shares in the Company held by shareholders at
a proportional level with equal voting rights per share.
-- Share premium - Excess over share capital of any investments.
-- Retained earnings - This comprises the accumulated trading results of the Group.
-- Share-based payment reserve - This reserve comprises the fair
value of options share rights recognised as an expense. Upon
exercise of options or performance share rights, any proceeds
received are credited to share capital .
7. Share options
Group & Company Number of share Weighted average
options exercise price
30 June 30 June 30 June 30 June
2023 2022 2023 2022
Number Number GBP GBP
Outstanding at 1 July 2022 219,781 729,467 0.3997 0.5071
Granted 4,119,285 - 0.07 -
Forfeited (86,648) (497,186) 0.4642 0.5755
Exercised (5,208) (12,500) 0.0025 0.0003
Outstanding at 30 June
2023 4,247,210 219,781 0.0773 0.3997
---------- ---------- --------- --------
Exercisable at 30 June
2023 70,836 115,632 0.0025 0.0025
---------- ---------- --------- --------
5,208 options were exercised during the year.
The options outstanding at 30 June 2023 had an exercise price
ranging from GBP0.00025 to GBP0.70 and a remaining contractual life
of up to 2 years and 6 months. The options exist at 30 June 2023
across the following share option schemes:
Number Exercise Fair value Vesting
of shares price per of scheme period
share (GBP)
EMI scheme granted in April
2021 70,836 0.00025 54,880 1 year
SAYE scheme granted in
March 2021 57,089 0.70 33,573 3 years
LTIP scheme granted in
December 2022 4,119,285 0.07 107,542 3 years
----------- -----------
4,247,210 195,995
----------- -----------
The fair value of the scheme is being expensed over the vesting
period. All share options expire 10 years after the date of
issue.
Group Company
30 June 30 June 30 June 30 June
2023 2022 2023 2022 GBP'000
GBP'000 GBP'000 GBP'000
Expenses recognised in
the year
Arising from equity settled
share-based payment transactions 28 231 19 87
--------- --------- --------- --------------
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END
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October 17, 2023 02:00 ET (06:00 GMT)
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