Omega Diagnostics Group PLC Trading Update and Notice of Interim Results (4734D)

TIDMODX

RNS Number : 4734D

Omega Diagnostics Group PLC

10 October 2018

Omega Diagnostics Group PLC

("Omega" or the "Company")

Trading Update and Notice of Interim Results

Omega (AIM: ODX), the medical diagnostics company focused on allergy, food intolerance and infectious disease, announces the following trading update for the six months to 30 September 2018, in advance of releasing its interim results on Monday 3 December 2018.

Financial update

Turnover is in line with expectations and expected to be GBP5.23m and reflects the decision to discontinue two loss making businesses. This decision was taken following the strategic review and consequently revenues declined by 27% on a headline basis (2017: GBP7.11m) and by 7% on a like-for-like basis as outlined below. There is expected to be a minimal currency effect between revenues for this half-year period compared to the prior period. Profit before tax (before share-based payments and amortisation of intangible assets) is in line with expectation at the half-year stage.

Segmental revenues are expected to be as follows:

 
                               6 month    6 month revenue        6 month revenue          % increase    % increase 
                               revenue                 to                     to           Sept 2018     Sept 2018 
                               30 Sept       30 Sept 2017               31 March         v Sept 2017    v Mar 2018 
                                  2018                                      2018 
 Food Intolerance             GBP3.84m           GBP4.13m               GBP3.42m                - 7%         + 12% 
 Allergy/Autoimmune           GBP0.79m           GBP1.67m              GBP1.64m                 -53%         - 52% 
 Infectious Disease/Other     GBP0.60m           GBP1.31m               GBP1.38m               - 54%         - 56% 
 TOTAL                        GBP5.23m           GBP7.11m               GBP6.44m               - 27%         - 19% 
 

Segmental revenues for the current financial year include a contribution for the first quarter only for Omega GmbH and the Company's infectious disease business unit, following the decision to close or sell these business units respectively. To provide a like-for-like comparison therefore, revenues for these business units have been excluded from Q2 in the prior half-year as follows:

 
                                 Revenue to       Revenue to                 % increase 
                               30 September     30 September 
                                       2018             2017 
 Food Intolerance                  GBP3.84m         GBP4.13m                       - 7% 
 Allergy/Autoimmune                GBP0.79m         GBP0.82m                       - 4% 
 Infectious Disease/Other          GBP0.60m         GBP0.66m                       - 8% 
 TOTAL                             GBP5.23m         GBP5.61m                       - 7% 
 

Strategic update

As previously announced on 28 June 2018, the Company successfully concluded the sale of its infectious disease business unit (excluding VISITECT(R) CD4) to Lab 21 Healthcare Ltd for a total price of GBP2.175m, of which GBP1.8m was received at completion, with GBP0.375m receivable over the coming months.

As also announced on 6 August 2018, the Company took the decision to close its German business unit and the Pune manufacturing facility in India.

These decisions have enabled the Company to focus more resource on key areas of the business most likely to deliver growth as follows:

VISITECT(R) CD4

The Company has made good progress with commercialisation activities for the 350 cut-off test. Distributor agreements have now been signed for Nigeria, Zimbabwe, Ghana, Zambia, Kenya, Colombia, Indonesia, Guatemala and Cameroon with agreements under negotiation in a further five countries. Product registration proceedings have also been initiated in 12 countries to date.

The VISITECT(R) CD4 Advanced Disease test (utilising a lower 200 cut-off) continues to progress well against plan. Since the last update on 6 August 2018, the Company has manufactured two validation batches which have been sent to testing sites in Zimbabwe and India and the final QC release results are awaited within the next few weeks.

Food Intolerance

Our Food Intolerance Division has reversed the decline in revenue when compared to the immediately prior six months (GBP3.84m vs GBP3.42m). This is due to a combination of factors including increasing demand and the timing of customer orders and we anticipate that full year on year growth will be maintained based on current initiatives.

Allergy

We continue to make good progress regarding developing new allergens to run on the IDS instrument. IDS themselves are making good progress with their commercialisation activities and, as recently announced, have placed their first purchase order which we plan to ship by the end of this month.

Outlook

The decisions we took earlier in the year, as part of our strategic review, are enabling us to focus on our key growth areas. Trading in the second half of this year is expected to improve over the first half and we remain confident, both in the improved outlook for the business overall and the potential to realise value for shareholders over the shorter term.

Colin King, CEO of Omega commented: "We are making great progress implementing our revised strategic direction and the narrower focus is already starting to deliver in our three key areas. Overall, we believe the actions we are taking will ultimately deliver shareholder value both in the short and long term."

The information communicated in this announcement is inside information for the purposes of Article 7 of EU Regulation 596/2014.

Contacts:

 
 Omega Diagnostics Group PLC                                    Tel: [phone] 
 David Evans, Chairman                                    www.omegadiagnostics.com 
  Colin King, Chief Executive 
 Kieron Harbinson, Group Finance 
  Director 
 
 finnCap Ltd                                                    Tel: [phone] 
 Geoff Nash/James Thompson (Corporate 
  Finance) 
 Camille Gochez (Corporate Broking) 
 
 Walbrook PR Limited                    Tel: [phone] or [e-mail] 
 Paul McManus                                                   Mob: [phone] 
 Lianne Cawthorne                                               Mob: [phone] 
 

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October 10, 2018 02:00 ET (06:00 GMT)