Following a stronger H2 and Abzena's (LON:ABZA) FY18 results, we have made major changes to our model across both the services business and the Abzena Inside royalty portfolio. The FY18 reported revenues of £22.0m were ahead of our forecast and up c 18% over FY17. This was driven by 60% growth in bio-manufacturing where fortunately, most of the investment in capacity was directed in FY18. Last week’s announcement of a proposed royalty monetisation will help to address the FY19 working capital requirement.
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Positive FY18 announcement
After last year’s trading update, the tone of Abzena’s FY18 results announcement was much more upbeat. A stronger H2 resulted in FY18 revenues growing by about 18% to £22.0m (FY17, £18.7) and beat our £21.6m estimate. The investment programme increased the FY adjusted EBITDA loss to £12.0m (FY17 £7.5m, and our FY18 estimate of £10.8m). Encouragingly for the future, the value of the contracts secured in the second-half of FY18 was £15.4m; a 42% jump over the more sedate £10.8m in H118. The year-end cash position of £6.8m reflected the continued investment programme, which drove the FY loss to £14.2m.
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