The Courier & Advertiser (Angus and Dundee)
‘Headwinds’ weigh on test kit group’s performance
TRADING: Omega remaining confident
Shares in Scottish medical testing kits firm Omega Diagnostics plummeted after it said it was facing a “number of short-term headwinds”.
The Alva-based group saw almost a fifth wiped off its market value in morning trading after it used its half-year markets update to flag several issues included a disappointing “potential setback” with its Allergodip allergen dipstick test.
Omega said it had been developing a new range of panels for the test – which is designed for use in emerging markets – and had encountered some technical challenges.
It is unclear at this stage whether the issue can be overcome and the company said its second-half performance is likely to be impacted by an asset impairment charge of up to £800,000 as a result.
Omega reported a 5% decline to £1.67 million in its overall allergy/ autoimmune business and flagged a disappointing decline in its German operation where Euro-denominated sales declined by 9%.
One of the reasons for the fall was a wet July in the country which led to a lower pollen count in the air and less demand for its inhalant products.
On a positive note, the group’s food intolerance business pushed ahead in the period with overall sales up 8% to £4.13m, driven in large part by a 17% rise in revenue from its Foodprint laboratory system.
The infectious diseases business also delivered a 7% rise in sales to £1.31m, while the group’s flagship Visitect CD4 range – a hand-held HIV indicator test designed to be used in rural locations in Africa and other emerging markets – was granted a CE marking in the period, allowing it to be immediately rolled out for sale in some countries.
Total group revenue moved 4% higher to £7.11m for the six months to September 30, while pre-tax profits came in at £72,681, down from the £314,316 of a year earlier.
Chairman David Evans said: “Overall, we remain confident about our long-term prospects.
“Whilst we are experiencing a number of short-term headwinds in our core business, we believe that the impact will be more than mitigated by the success we expect from positive achievements over the medium term as we complete the commercialisation of key products for allergy, malaria and now CD4.”
In a separate move, the group announced that founder and chief executive Andrew Shepherd had stood down from the board.
He will remain with the group as global ambassador-life president, while chief operating officer Colin King takes on the CEO role.
Shares closed down 3.75p at 16.50p business@thecourier.co.uk