REG - Abingdon Health PLC - Final Results
17/10/2023 07:00
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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.
· Continuing 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™ range, with 12 self-branded products now available and
further own brand and third-party product launches expected.
· Salistick™, the first ever saliva pregnancy test, launched in 400
Superdrug stores and online, via Amazon and on the Abingdon Simply Test
(https://www.abingdonsimplytest.com/) 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 £4.0m (2022: £2.8m), with H2 2023 revenue of £2.9m
being over 2.5x that of H1 2023 (H1 2023: £1.1m) 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 £2.9m (2022: £10.0m loss).
· Gross margin of 51% (2022: minus 116% or 3% when adjusted for £3.7m
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: £3.2m (2022: £2.4m), in-line with the
Board's expectations.
· Net cash inflow from operating activities of £0.8m (2022: outflow
£7.7m).
· 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/ (http://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 Nominated Adviser) Tel: +44 (0)20 7496 3000
Peter Steel, Alex Bond (Corporate Finance)
Tom Salvesen (Corporate Broking)
Walbrook PR Limited Tel: +44 (0)20 7933 8780 or abingdon@walbrookpr.com
(mailto:abingdon@walbrookpr.com)
Paul McManus / Phillip Marriage Mob: +44 (0)7980 541 893 / +44 (0)7867 984 082
Alice Woodings +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(®) 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
(http://www.abingdonsimplytest.com) ® 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(®) 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
(http://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
£6.3m 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 (https://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™
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™, 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 (http://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 £4.0m, 43% higher than FY22 (£2.8m) 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 £2.9m which
was more than 2.5x that of H1 FY23 (£1.1m), 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™ 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™ 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™ and our Abingdon
Simply Test™ range both in the UK and into the EU. We will launch a
rebranded Abingdon Simply Test™ 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
(https://polaris.brighterir.com/public/abingdon_health/news/rns/story/xlkg0gw)
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 £3.2m. 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™ 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)
(https://www.globenewswire.com/FL/news-release/2023/07/09/2701436/0/en/Lateral-Flow-Assays-Market-Size-to-Surpass-US-11-7-Billion-by-2032-Fact-MR-Study.html#:~:text=In%202021%2C%20market%20sales%20on%20a%20global%20scale,1.5X%2C%20reaching%20around%20US%24%2011.7%20Billion%20by%202032.)
Operating and Financial Review
Revenue and Margins
The Business delivered strong revenue growth in the period, growing 43% to
£4.0m (2022: £2.8m), and increased by 126% when stripping out COVID-19
revenue from both fiscal years.
Revenue by Geographical Market
2023 £m % * 2022 %* (Decrease)/Growth
Geographical Market £m
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
Operating Segment 2023 £m %* 2022 %* (Decrease)/
£m 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™ 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
£3.7m 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 30 June 2023 Year Ended 30 June 2022
£'000 £'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 £2.9m (2022: loss £10.0m), 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 £4.0m (2022: £5.3m) 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 £0.2m
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 £0.4m (2022: £1.5m). Excluding the
non-recurring and DHSC related costs in the previous year, FY22 costs were
£0.6m, illustrating the underlying improvement of £0.2m results from a
reduction in external consultancy and professional advisory services.
Premises costs were £0.6m in the year (2022: £1.0m), with underlying costs
being £0.9m when adjusted for the one off £0.3m 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 £0.2m. This saving
was partially offset by an increase in the utility costs of the business of
£0.1m.
Marketing and Travel costs increased to £0.2m (2022: £0.1m) 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™ own label product range.
Cash Resources
Net cash inflow from operating activities was £0.9m (2022: outflow £7.7m). 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 £0.8m when compared to the
prior year, and a closing cash position of £3.2m (2022: £2.4m).
Financing
In July 2022 the Company received £6.3m 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 £(3.56)m
Add: Share Based Payments £0.03m
Add: Nonrecurring legal fees £0.03m
Add: Nonrecurring employment costs £0.16m
Add: Impairment charge £0.09m
Add: Depreciation and Amortisation £0.67m
Deduct: Finance Costs £(0.02)m
Deduct: Lease modification £(0.39)m
Add: Other exceptional costs £0.09m
Adjusted Loss attributable to Shareholders £(2.89)m
Adjusted EPS (0.95)
Consolidated Statement of Comprehensive Income
For the Year Ended 30 June 2023
Year ended 30 June 2022
Year ended 30 June 2023
£'000 £'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: (3,451) (21,262)
Equity holders of the parent
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
£'000 £'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 2,033 5,059
Trade and other payables
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 Capital Share premium Share based payment reserve Accumulated deficit Total equity attributable to owners of the parent
£'000 £'000 £'000 £'000 £'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
£'000 £'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, plant and equipment 1 -
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
£'000 £'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 £nil (2022 - £364,000) 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
(https://www.abingdonhealth.com/) .
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 £24,000 per annum (which qualify for capitalisation
as a right of use asset), utility fees of £104,000 per annum, and ongoing
shared costs of £72,000 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 £161,000.
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 £3.2m. 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 £nil (2022 - £nil). 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
£'000 £'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
£'000 £'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
£'000 £'000
Current tax
UK Corporation tax on profits for the current year 46 -
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
£'000 £'000
(Loss) before taxation (3,608) (21,593)
Expected tax (credit)/charge based on a corporation tax rate (740) (4,103)
of 20.5% (2022 - 19%)
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 (£'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
£'000 £'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
£'000 £'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 options Weighted average exercise price
30 June 2023 30 June 2022 30 June 2023 30 June 2022
Number Number £ £
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
£0.00025 to £0.70 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 of shares Exercise price per share (£) Fair value of scheme Vesting period
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 2023 30 June 2022 30 June 2023 30 June 2022 £'000
£'000 £'000 £'000
Expenses recognised in the year
Arising from equity settled share-based payment transactions 28 231 19 87
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