Disappointing trading update but outlook positive

Abzena announced a disappointing business update, indicating revenues for each of its service lines have been below expectations. This has an impact on H118 revenues, which the company now expects to be broadly in line with H117. Abzena has, however, indicated that there is good order cover and high engagement for new business and therefore expects H2 to be significantly stronger. We have reduced our forecasts and valuation to £110m (vs £160m) or 52p/share (vs 75p) following a review. A solid update at the interims (in November) is important in order to give confidence in its growth strategy and route to profitability.