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(Alliance News) - Shares in Abingdon Health PLC tumbled on Monday after the lateral flow test maker shared a disappointing update on its annual performance.
For the financial year ended June 30, the York-based firm said revenue is expected around GBP2.8 million, which would be a 76% decrease year-on-year from GBP11.6 million.
It expects to report a "substantial" loss, especially due to the increase in operational infrastructure related to its AbC-19 tests, the contract with the UK government's Department of Health & Social Care, as well as the unwinding of this investment that followed.
Shares in Abingdon were down 26% to 6.88 pence each in London on Monday morning.
In financial 2021, it reported a pretax loss of GBP7.0 million.
It also said that a "significant contract" with a European customer has stalled, due to issues in the technical transfer process. There is now a "high degree of uncertainty" about whether it will see any revenue from the contract, and when that would happen.
In May, it had announced that the contract would bring in GBP2.7 million in revenue in the first year.
It also noted "uncertainty" around the timing of revenue from the Vatic contract announced in April, but said there was potential for "significant manufacturing volume" if Vatic receives emergency use authorisation in the US.
Abingdon explained it has continued to restructure its operations to cut costs, reducing headcount to 86 employees at the end of July from 123 at the end of December.
"When the company begins generating meaningful commercial traction, it will look to grow its headcount sustainably and in line with the anticipated growth of the business and revenues," the company explained.
The firm said its self-tests for flu and Lyme disease should reach proof of concept stage "shortly".
Chief Executive Officer Chris Yates commented: "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 that 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."
By Elizabeth Winter; elizabethwinter@alliancenews.com
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