Abingdon Health (LSE:ABDX) — Final results for the year ended 30 June 2026

0:01 Good morning, and welcome to the ABDON HEALTH PLC final results investor presentation. Throughout this recorded presentation, investors will be in listen only mode. Questions are encouraged, and they can be submitted at any time using the Q and A tab situated on the right hand corner of your screen. Simply type in your questions and press send. Before we begin, I would like to submit the following poll. I would now like to hand you over to executive chairman, Chris Hand. Good morning to you. Good morning. Thank you, Alex, and good morning, everyone. Thank you for joining the presentation of ABDON HEALTH's financial year twenty six results for the year ended June 30. I'm Chris Hand, executive chairman, and I'm joined by Tom Hayes, CFO. Hi there. So we have a disclaimer, which we'll move through to the next slide.

0:56 As I say, I'm I'm Chris Hand. I'm one of the founders of ABINGDON HEALTH, which we in 2008. I'm executive chairman at Royal Life Health for the past eighteen months or so, and I've been previously nonexec chairman of the company. My cofounder Chris Yates is currently CCO and has moved to our... Looking after our USA operations. But in terms of my background, it's thirty years in the medical diagnostics industry. Founded a company called Cozart PLC, which is also on AIM, which specialized in rapid diagnostic tests similar to those we now manufacture at ABDON HEALTH. And that company was sold to Concordano PLC in twenty o seven and is now part of Abbott. So my background is the development and commercialization of rapid diagnostic and other in vitro diagnostic tests.

1:50 Okay. Thanks, Chris. So I'm Tom Hayes. I'm the CFO of ABDON HEALTH. So my background is chartered accountancy. I was... I've worked across a range of industry and corporate finance roles. Previously, I was finance finance director at another enlisted group of companies, and I joined ABDON in January 2025. So the agenda for the presentation today, we'll give a brief overview of who we are as ABDON HEALTH PLC and financial year '26 at a glance. Tom will run through the financial review and then hand back to me for about and medium term. And then, obviously, we're we're happy to answer any questions that you may have. Please submit those as we go.

2:48 So in terms of who we are, ABDON HEALTH is a end to end partner for the development through to manufacture, regulatory approval, and delivery of rapid diagnostic tests. That's been our background. Increasingly, since acquisitions we made two years ago, that full service offering extends to other areas of med tech by the, med tech regulatory and quality consultancy firms we bought two years ago, those being CS Life Sciences and IV ideology. And those two companies are now increasingly incorporated into our full service offering for our customers. We operate from three sites.

3:35 Headquarters are in York, the biotech campus, where we do all the activities from design for development through to manufacture, regulatory, and delivery. We have two other sites. The site we have in Doncaster, South Of York, is ABDON HEALTH PLC, which operates an independent performance evaluation service and acts really as a bridge between product development and regulatory approval. That facility we've invested in further over the past year, and we'll we'll explain as we go through what we're doing at ABDON analytical. And then the third site is important for us, the ABDON HEALTH USA facilities, which are on the University Research Park in Madison, Wisconsin.

4:26 And again, we'll tell you more about how we're expanding that site as we move through the presentation. In terms of financial year twenty six, this slide gives an overview, a glance... At a glance. So our revenue is up 30% over the previous year to £11,000,000, up from 8,400,000 in financial year twenty five. Both years had additional income from grant funding, and that relates to the project we're running with the institute, the pastor, and others to develop tests for malaria. So there was initial naught 300,000 in the just... We're we're presenting today versus naught 200,000 in '25.

5:14 Our gross margin has increased to 47.1% from 44, driven largely by a mix of how the revenue is mixed. And it was a milestone second half of the year for us in that we achieved an adjusted EBITDA profit of £200,000. So that was a that was a big milestone for us, and it illustrates that our business model coming through and working, that our infrastructure is is in place to create that type of movement. And then cash at the end of the financial year was at £2,900,000. That was following a a 3,200,000 net placing we did in the autumn of twenty five. So, yeah, it's a... At a glance, it's a good year for us moving moving towards that second half. Profit was an important point for us.

6:08 And at this point, I'll hand over to Tom Hayes who will run through the financial review. Thank you, Chris. Okay. So this slide just gives a bit more detail on the numbers Chris has just run through. Really, as per the summary, we've just covered the key the key numbers on here for us are the the the revenue where we've got 30% reported revenue growth up to 11,000,000 or 11,300,000 including some grant funded projects income, which we have to show on another income line. The the second key number is the gross margin where we've got an improved margin year on year. And then the the third one is the the adjusted EBITDA line where we've seen some some operating leverage come through in line with higher revenues.

6:57 The the 1.5 loss for the year overall, but there there was significant weighting towards h two on the back of higher revenues. Well, we did we did make small adjusted EBITDA profits in the half, which was, you know, a great a great milestone for us. Okay. So just moving on to the next slide. So we... We've got breakdown of revenue just by by segment. These are the different activities we, you know, we do within the business. This is really showing that most of the growth is driven by contract development revenues, which is on back of a number of significant programs we've announced over the past twelve, eighteen months. There... There's some modest growth on the regulatory services side as well. Contract manufacturing was relatively flat year on year, but we we expect over time that should step up as some of these bigger development programs progress through regulatory approvals and into into manufacture.

7:50 And then finally, just products we have split out separately. That's mixture of some somewhat, you know, white label products that we make and also the ABDON simply test products where we where we have noted in these results that we'll we'll carry on doing those as a b to b product, but we're we're stepping back from the b to c sales through our websites, which was quite quite a small number for us, and it's not really part of the key strategy moving forward. K. So this so this slide's quite quite key just in explaining how the... How last year played out. We've got significant weighting of revenue towards h two in f y twenty six. The the reason for that, h one, the the challenge for us was really securing and starting some of the data programs that we've been announcing. H two was very much full full steam ahead with significantly higher revenues as a whole, particularly on the contract development side.

8:43 And that's... That has fed into the the adjusted EBITDA profits in h two. The reason for that is a lot of the cost base is fairly fairly fixed in terms of the people we've got in the business, the premises that we've got in The UK and in The USA. And so really having delivered the higher revenues in h two, you know, that that... That's how we've got to the the overall profitability. Okay. And then this this slide is just kinda zooming out a bit and giving a more of a a view on a four, five year view. It's showing that the the the reason we started with f y twenty two is that's the first year where we are taking out some COVID revenues where the business has been kind of rebuilt around, you know, kind of broader contract developments and regulatory manufacturing piece.

9:30 And and it's showing that over... On that four or five year view, we've had significant revenue growth. The... We've got a compound revenue growth of 41% from '23 through to '26. The contract development revenues is a significant part of that, you know, the revenue growth over those years, and that's that's all organic growth. We did also acquire the two regulatory consultancy businesses, CS Life Sciences and IV Theology in FY '24 or just early in FY '25, which is why they're part of regulatory growth. But but overall, we've got, you know, significant compound growth over this period. Okay. Now this this final slide is just a bit more detail on the cash movement between June 25 and June 26.

10:18 It's just showing that we... Obviously, we did the the last fundraiser we did in October 25, which was for both the expansion of our US facilities and also for working capital. We have that cash coming in. We've got an operating cash outflow of 1.6, which is not not not not dissimilar to the the adjusted EBITDA loss for the period. And but but again, in the split of that, it's quite similar to the adjusted EBITDA line, and most of that outflow was in h one. There was a a modest outflow in in h two. And so and so, yeah, really, so showing that, you know, caption EBITDA, we have moved fairly similarly. And at the end of June, we had 2,900,000 of of caption bank. Thank you, Tom. In the next section, I'll I'll cover on our operations and give some insight into some of the contracts we're actively working on, the increased capability we've created and some of the expansions we're doing in The US, but also in The UK at our York site and ABDON and analytical.

11:25 So as far as contracts concerned, we've spoken previously about our full service offering now allowing us to gain larger contracts, which give us greater visibility of revenue over longer periods of time. Inevitably, some of these will move and and be replaced by others. But for us as managing the company, it gives us a lot of insight as to what we need to continue to operate, as I say, over a longer time period and have a greater visibility of that revenue. So some examples we put on here, fourteen four is a German biotech pharmaceutical company that we work with. They were... They're happy for us to to name them as a as a partner, and we've been doing a lot of work with them developing a quantitative lateral flow test, which is acting as a companion diagnostic for their therapy.

12:21 The therapy being to help cardiac shock and other types of shocks. And then the diagnostic test is being developed alongside the pharmaceutical to ensure that companion diagnostics is ready at the same time as the pharmaceutical. Other programs of a similar size, you can see illustrated on this slide, the $2,500,000 clinical self test program is is well underway, and that's been project managed with technical support from ABINGDON, including some technical work being done at our York site. And then The U... At the top right, The USA multiplex test system. We unfortunately have to talk quite vaguely about some of these contracts and that the customer has confidentiality agreements with us. But this is just an example of a similar size contract being signed end of last year, but this time to be run out of our USA Madison Laboratories.

13:25 And that similarly to, from a technology point of view, moves things from a simple yes, no to a semi quantitative multiplex system. In other words, measuring many many analytes at the same time. And that's... That program will move through financial year '27. There's a series of contracts bottom left, which we announced earlier in the year. Some of those are are going through and completed. Others are being reviewed by the customer, and some some may continue, some may not. But I think, importantly, because of this visibility we have with contracts, the way we forecast things would take care of... We basically only forecast contracts if we're sure they're they're progressing. So...

14:10 But as I said earlier, as we move through working with different customers, some programs will continue, some will fade away. But importantly, we've got a good visibility of the whole due to this larger service offering. An interesting one in the middle... Bottom middle there is a product we've developed with a company called Upfront Diagnostics. The product's called LV one, and it's a test for triaging stroke. It's currently being piloted across the London Ambulance Service, and the idea of the test is to triage whether the patient has suffered a large vessel occlusion, which is the worst sort of stroke, which requires different treatment and potentially to be directed to a different health centre than a a than a different sort of stroke. So that's a really interesting product. That's coming through, as I say, being tribal and landman and service in this UKCA marked.

15:09 The idea of this slide is to illustrate, hopefully, to to you how the integrated full service offering that we now give to our customers is allowing us to gain these larger contracts and take things from feasibility right through to manufacture and sale. In terms of the capability, two key areas of growth for us, which were helped by the fundraiser last autumn, are ABDON HEALTH PLC, which is our Doncaster performance evaluation laboratory. That opened December 2024, so less than two years ago. It generates performance data that bridges between product development and regulatory approval. We're also offering a CRO service from that site now as some of these products come through and require clinical testing. We're managing that from the Doncaster site.

16:04 And importantly, we gained our first UCAS accreditation to a standard known as one seven zero two five, which is the laboratory testing standard, which illustrates that the highest level of laboratory work is being performed from the ABDON analytical site, which obviously gives our customer confidence that the results coming from that lab are of a high quality. So that's an area we put effort into expanding and and that's... We've got a lot of activity going on in in the Lancaster Lab. And then similarly with Madison, Wisconsin where we have ABDON HEALTH USA, which we established a year and a half ago, and we've now added manufacturing to that site from from now, basically. So the the opening happened very recently, end of September, and we'll be adding the appropriate quality standards to that site. So, basically, that customers can have products developed and manufactured in both The UK or The USA, both in the same quality system and the same standard of work.

17:24 So Madison is, as I say, has just been expanded to add a manufacturing hub. We did that from the pool from our customer base. So we continue to expand and have most of our activity from York, but Madison is an important site for us now as we're gaining an increasing number of US based customers who want both the development work and now increasingly the manufacturing work to be done from The USA. And this began before the advent of the president Trump that we're finding increasingly if a customer is operating via US grant funding, then that funding needs to be used in The USA. And, similarly, they want USA manufacturing made in The USA, which we can which we can now offer from our Madison site, which is on the university Research Park in Madison.

18:17 And Madison's a very... Sorry. Wisconsin's a very strong health tech state. They've been very supportive of us and to the extent that we've we've been certified for state support for up to $370,000 based around recruitment of people in that site. So as I said previously, we're adding the appropriate accreditations to the site. And because of the interest we've gained, certainly in Madison and the wider Wisconsin community and and beyond that, we've allowed our AIM listed shares to be traded on the OTC QB in in New York, and that's that's something we started earlier this year. It's a very low cost way of letting our shares be more widely traded in The USA.

19:12 So our strategy going forward this year and beyond, we're consolidating our activities into three pillars to give a more coherent offering to our customer base and indeed to investors. And we've we've divided things into three pillars, which you can see illustrated on this slide, with ABINGDON Diagnostics being the original core lateral flow development and manufacturing element of of our offering. It also includes new technologies which we can add our development skills to, which are very similar to the lateral flow skills, such as biosensors and other and other new IVD methods. AI and software as a medical device is something we've been offering as a consultancy via the companies we acquired a couple of years ago. We're finding a lot more incoming interest to add this consultancy service alongside our product development and other med tech consultancy.

20:12 So you can see AI and SAMD featured in both ABDON HEALTH ABDON HEALTH which is the third pillar here. And that's basically the same people operating operating across those three pillars. So the ABDON and AI and med tech is is the core of our med tech consultancy, which which goes beyond in vitro diagnostics. And then ABDON analytical in the center there bridges between the two actually, and it also allows performance evaluation and things like bioburden testing, which apply to other medical devices in addition to in vitro diagnostics. And then the CRO, clinical research offering, is complementary to the test house and performance evaluation offering as we're bringing products through from development to testing and regulatory approval.

21:12 We're now also offering that clinical activity too. And importantly, we're promoting this as one... A one stop shop, if you like. So one ABDON and integrated consultancy across all these three pillars. So those three pillars are backed by these six priorities in terms of our strategy. Our people are very important to us. We develop our peep... People, and the culture and their capability is important as we continue to grow, that our people grow with the company. We need to grow efficiently, so we need to be constantly managing our costs and as we scale up, which is a which is a key feature of our activities.

22:03 And as I've just mentioned, outside world faces as one group and and a clear identity as a in vitro diagnostic and med tech consultancy. AI and software as a medical device is very important and increasingly so. It it it crosses all that we do. We're getting an increasing number of interest and incoming inquiries about our ability to help incorporate AI and software as a medical device into our current offering. And as I said, we've already got skilled people in that field within the company. The new tech services, again, leverages what we have in place. If we can develop and manufacture lateral flow tests, there's there's an easy pivot towards other similar rapid diagnostic tests such as bio sensors and microfluidics, which we've have experienced in the company of doing.

23:01 And then the key across all of this is to grow revenue and profits in The UK and The US, and obviously applying that globally, but from our two bases in The UK and The USA. For the outlook, as we said earlier, the contracts we've announced during the calendar year provide visibility to us to allow us to manage the company efficiently, giving us a solid base on which to build. And we... We've got a very good pipeline of of work coming through. Q one revenue was lower than we anticipated due to some delays in programs. Nothing that's gone away, but things such as specialty reagents not being available from from a customer, for example, or another example, which could create a debt...

24:02 A delay in revenue, maybe the customer altering the specification when we get to a certain milestone, which would mean, for example, re... Adding additional work, but it slows down the full program. So, again, nothing that's gone away, but can can potentially slow revenue and therefore make our half two more heavily weighted than than half one. Financial year twenty seven revenue and adjusted EBITDA will be therefore moved towards the second half. And I've mentioned the integration of our regulatory and quality med tech consultancy offering. As part of that restructuring, we'll be moving towards that integrated offering to a higher value IVD and med tech and AI work, which will...

24:59 By the the re the re integration will cause some short term revenue impact but a smaller impact on EBITDA, and we would expect that to pick back up pretty quickly. But for for now, we've we've lowered the revenue from that element of our activities. The board expects an improved EBITDA position for '27 versus '26. And importantly, our infrastructure is largely in place. Our priority is delivery of existing programs and converting our strong pipeline on that existing infrastructure base. So to summarize, we had good growth in the year, up 32 if we include the grant income from both both years, '25 and '26, or 30% if we don't.

25:51 The first half... It was our first half, sorry, of adjusted EBITDA profit, so that was an important milestone for us. And our multiyear contracts that we're obtaining now based upon the full service offering that we provide are allowing larger multiyear programs to allow us to have this greater visibility of activities. Our capability is where we want it to be, both in The UK and The US from a development, manufacturing, and regulatory performance evaluation, the whole process. Adding the UCAS accredited laboratory is important. And in terms of numbers, we expect to continue the revenue the revenue to continue to increase, and we expect EBITDA performance to improve over last year into this.

26:50 And at that point, I'll just have one more slide to those who who haven't seen this already. We're offering an open day on the October 21 at our York Biotech campus facilities. There's still places if those listening would like to attend. We'll be introducing members of the team, doing a tour of our facilities, and looking at some of the products we make. So if if anyone's interested in attending that, please do register because we we need names of people. So you can see the you can see the place to register your interest there at via ABDON at wallroppr.com. So please do that. And, yeah, we look forward to seeing those of you that can make it in York.

27:41 That's great. Thank you very much indeed for your presentation. I will now turn on your cameras for the Q and A session. Ladies and gentlemen, please do continue to submit your questions using the Q and A tab situated in the top right corner of your screen. While the company take a few moments to review those questions submitted today, I would like to remind you that recording of this presentation, along with a copy of the slides and the published Q and A can be accessed via our investor dashboard. Alice, at this point, if I may, I will hand back to you to take us through the Q and A session, and I'll pick up at the end. Thank you. Thank you, Alex. We've had a couple of questions submitted online, so I'll start with the first few from Ben. With the development revenues increasing, what's the time frame for this transition for this to transition into meaningful manufacturing revenues?

28:27 Yeah. We've got a lot of programs which are moving... The the the way that the development moves through to manufacturing, manufacturing, there are various stages to that. So for example, once a product has finished being optimized, it moves through to what we call technical transfer where we manufacture three batches of the product at increasing sizes. And then the customer alongside us, if that's how we're working, will do the performance evaluation and clinical testing of those products, and that can take several months to do. So we would expect an increasing number of those products to come through to manufacturing this year, but, obviously, they'll they'll start at a at a lower level, and then that that will pick up as they gain traction with their own commercial activities.

29:23 So it's a key thing for us to do. We've got a couple of programs moving through in the same way in The US as we do in The UK. So, yeah, it's a question of it's a question of getting things through the regulatory approval process as well as just completing the development. Thank you, Chris. And then the next question from Ben. What revenue contribution do you see from the expanded US facility in the coming months, and does the profile look... What does the profile look like further out? Okay. Yeah. Do you want to take that to that, Tom? Yeah. Sure. Yeah. Well, the... I mean, it's a big big growth area for us in the The USA. We don't publicly split out, you know, the revenue by that business unit. But, I mean, essentially, they they were up and running in early twenty twenty five. We, you know, last month just kind of officially opened the manufacturing side of things. So, I mean, I think I think, you know, without giving exact numbers, you know, we want them in... You know, our expectation is they're into the sort of millions rather than hundreds of thousands of revenue.

30:27 And, you know, we we... We'd like to see that step up significantly in the future. Great. Thank you, Tom. And then we've had a couple of questions about the significant growth forecast for 2027. And Martin HEALTH says, given the improvement in financial performance in page two twenty six, I was slightly disappointed by the '27 outlook. What level of sales is required to become profitable? Okay. Well, I'll a start on both of those, Chris, and then check-in if you if you want. I think in the conclusion of the results, I suppose... I mean, covered this about published updated forecast this morning. Obviously, it's up to, you know, it's up to them what numbers they forecast.

31:16 But, you know, we're comfortable saying we think we're on for, you know, for significant growth this year. Although, as Chris has said, that is... That will be weighted more towards h two in terms of revenues just given we've had a couple of delays in in h one. Just picking up Martin's question around the the outlook. I mean, Cavendish, again, Cavendish have their numbers out there. I mean, h two twenty six, the numbers, I've got reported revenue of 6,800,000, not including the grant funded income, and that was an adjusted EBITDA profit of of no 200,000. So I mean, that... That's probably not a bad starting point, although just the caveat being obviously, you know, the cost base will evolve as the business grows. But I mean, I can't I can't really give a a kind of, you know, revenue or profit forecast, but, know, that... That's what we achieved in h two. Yeah. And the Cavendish forecast for '28 on a revenue of 13.7 is is forecasting a new adjusted EBITDA. Yeah.

32:17 Not point two. So we're we're not far from that position. And what we've done, as I mentioned earlier in the presentation, is we have we have taken a view with... As we integrate our regulatory services that we... The the revenue may take a dip in that particular area while we restructure things, but we'd expect that to come back. So, yeah, I think I think we're we're... If we if we look at the Cavamish note and the 13.7 or thereabouts takes us... Is that profitable? Yeah. Which sort matches with what we said in half two twenty six. I I think so. And and also just to note that we are... We obviously are managing costs as carefully as we can, you know, to to to align with with revenue.

33:09 So, you know, that's... You know, profitability is still very much on our, you know, on our... Keep out of our agenda. Thank you. And just a reminder, for those who aren't aware, Cavendish notes are available through the Cavendish website or Research Tree. Anybody can register to receive those. Thanks, Alice. Chris, do you want to wrap up with a few closing comments? Yeah. Yeah. Thanks, Alice, and thanks for the questions. We're we're very pleased with our progress. The the financial year '26 was was a good one for us, and we expect us to continue to to to grow as we go forward. We've got the full service offering now. We're we're attracting some prestigious customers from pharmaceutical and and large biotechs through to the smaller startups.

33:56 And by integrating everything together, having the three pillars that we present to our customers, we think we're we're well positioned for increased growth both in The UK and The US. So, yeah, thanks again for taking time to listen to the presentation, and, yeah, hopefully, we'll see some of you in York. Fantastic. Thank you very much indeed for updating investors today. Could I please ask investors not to close the session as you now be automatically redirected to provide your feedback, which help the company better understand your views and expectations. On behalf of the management team, we would like to thank you for attending today's presentation, and good morning to you all.