Abingdon health’s share price has struggled for the past two trading sessions following the announcement that the company was expecting a substantial loss in its full-year results. The company also reported a £2.8 million revenue, which is a 76 percent year-on-year decline from £11.6 million reported last year.
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Despite the losses reported, the company also assured its investors that a return to profitability was nigh, indicating that it might come as soon as the next financial year. However, without shying away from its shortcomings, the company expressed disappointment in the results it posted.
Upon announcement of the poor performance, Abingdon Health Share price dropped by more than 20 percent in yesterday’s trading session.
Why Did Abingdon Health Make Losses
One of the reasons cited for Abingdon’s poor performance is the rising cost of operational infrastructure related to AbC-19 and the DHSC contract. In addition, the unwinding of this project has also been blamed for the company’s poor performance.
To address this problem, the company was able to reduce its headcount in the fourth quarter from 123 employees in December 2021, to 86 employees by the end of July. If such measures would not have been taken early, the company would have dealt with huge monthly operational cash outflow, which would have further increased its losses.
Abingdon Health Share Price Analysis
After yesterday’s drop of more than 20 percent, today’s trading session is continuing the bearish trend, with prices already down by a percentage point. Looking at the chart below, there is a high likelihood that, in the next few trading sessions, we will see prices setting a new price low when it trades below the 6.5p price level.
Part of the reason I don’t foresee Abingdon Health’s share price recovering is due to its recent poor performance. As the financial report continues to unravel, there is a high likelihood that we may see prices continuing to drop further downwards. In my opinion, a 20 percent recovery will be an uphill task for the company’s share price.