Property sale releases growth cash

Scottish medical testing group Omega Diagnostics has released cash after agreeing a sale and leaseback deal on one of its properties.

The Alva-based group – which has developed testing kits for a range of allergy targets and a hand-held HIV indicator test – has sold its Reinbeck unit in Germany.

The deal releases a total of €800,000 but the new landlord has retained a rent deposit of €100,000.

The move comes just days after the group announced it had raised £2.6 million in new growth funding from new and existing investors following a share placing.

The release of that cash is subject to approval being given by shareholders at a meeting later this month.

Omega said the proceeds from the property sale in Germany would go towards achieving the aims of the group’s accelerated growth strategy.

“We are pleased to be able to supplement our proposed fundraising from the placing and open offer with the sale proceeds from this property transaction,” Omega’s chief financial officer, Kieron Harbinson, said.

“The timing makes good sense as we embark on our accelerated growth strategy and given where the current euro/pound exchange rate sits.”

Late last month, Omega revealed it had achieved a 12% increase in revenues in the year to March 31, taking annual turnover to £14.2m.

Sales in each of its three divisions – food intolerance, allergy and autoimmune and infectious disease – all grew during the year.

At £9.2m, gross profit was 13% ahead of 2016’s outcome of £8.1m.

However, adjusted earnings per share dropped marginally in the year and cash held at the end of the period was £740,000, a significant drop-off from the £1.3m of 2016.

Chairman David Evans said the fundraising was to “ensure that a number of organic growth opportunities can be exploited across all three of our segments in terms of market expansion, manufacturing expansion and product line extensions.”

An Omega technician in the manufacturing facility. The group is embarking on an accelerated growth strategy.