Medical tests maker slumps to a loss after difficult year

Abingdon Health, which develops and makes rapid medical tests, says its trading performance for the year ended 30 June 2022 has been “disappointing”.

The York-based company says its FY22 revenues are expected to be about £2.8m (FY21: £11.6m (£3.6m excluding DHSC revenue and a one off COVID customer order)) and a “substantial loss for the year will be incurred.”

A significant proportion of these losses are due to an increase in operational infrastructure related to the firm’s AbC-19™  test product, its contract with the Government for these tests and the subsequent unwinding of this investment.

As previously reported, Abingdon had to wait to be paid more than £8m owed to it by the Government’s Department for Health & Social Care (DHSC) for Covid-19 tests and services, despite having agreed non-binding Heads of Agreement through mediation.

The company, which eventually received £6.3m from the DHSC last month after it took legal action, said its cashflow was put under severe pressure because of the Government’s non-payment.

Chris Yates

Chris Yates, CEO, said: “Despite what has been a challenging year for the company, we are nonetheless encouraged by our progress, with a range of new COVID-19 and non-COVID-19 opportunities.

“We believe FY23 will see a return to revenue growth and that our programme of investment will see us begin to generate meaningful commercial traction.

“FY22 was disappointing in many respects, particularly the distraction of the Judicial Review and the challenges in resolving the lack of payment from the DHSC.

“Despite this hindrance we have built a solid base of international opportunities and we look forward to the new financial year with a growing base of contract service customers.”

Abingdon says it further restructured its operations early in Q4 FY22 with a reduction in headcount from 123 employees at the end of December 2021 to 86 employees at the end of July.

Along with other cost saving measures, this has significantly reduced the ongoing monthly operational cash outflow.

The company’s cash balance at the end of July was £7.6m, following the settlement of the outstanding monies owed by the DHSC, including £1.5m that is held in a blocked account awaiting the outcome of a Judicial Review.

Abingdon notes its current cash balance should give it sufficient working capital beyond the end of the current fiscal year ending 30 June 2023 without material revenue growth.

The firm adds it will look to grow its headcount again once the commercial situation improves.