Abzena: Solid Trading Update Despite Increased Costs
Edison | Feb 23, 2017 08:12AM ET
Abzena (LON:ABZA) announced a solid business update including a 12th Abzena inside product entering the clinic. FY17 revenue is in line with expectations; however, costs are higher due to investment in increasing its US capacity being affected by a strong $/£ rate. Due to a revision of FY17 costs and using a FY17e cash position, our valuation decreases to £102m (74p per share), with upside expected as the increased investment delivers.
Dominated by restructuring and expansion in the US
Abzena has announced that its FY17 revenue is in line with its expectations, although the geographical revenue mix has proved to be different with the UK business performing more strongly, offsetting the lower than expected contribution from the US. The company has indicated that this is primarily due to timing, as it has invested in repositioning and enhancing its US offering over the past 12 months, and it expects the subsequent impact on revenues to come through moving forward. Abzena also indicated that its group costs in FY17 will be higher than expected primarily due to the impact of the current strong $/£ rate.
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