News blog

Omega Diagnostics

  • BY: Andrew Hore |
  • POSTED: 28/11/2011 |

Omega Diagnostics increased its revenues by two-thirds in the six months to September 2011 although most of this was due to the full six month contribution from the German allergy business acquired last year.

Omega produces diagnostic tests for allergies, food intolerance and infectious diseases. Revenues jumped from £3.3m to £5.53m with organic growth of 6%. Adding the German business has boosted gross margin from 57.4% to 63.6%. Underlying profit improved from £403,000 to £427,000 as R&D costs increased. All R&D costs are written off.

Omega continues to develop an automated allergy system using Immunodiagnostic Systems’ iSYS machine. The system should be launched by the end of 2012. Omega may licence or buy other technology to automate its Genarrayt diagnostics services.

Thermo Fisher is the distributor of Omega’s products in India but it has been taken over by a competitor. Omega is setting up its own distribution business in India, although, for the time being, Thermo Fisher continues to distribute the original products. No direct revenues are expected in this financial year.

Omega had cash of £1.88m at the end of September 2011 while borrowings and royalties owed to Immunodiagnostic Systems are slightly higher.

At 14p a share, Omega is valued at £11.9m. 

The share issue to finance the most recent acquisition has diluted earnings. The benefits of additional R&D on new products will show through in the medium-term. House broker Seymour Pierce forecasts a profit of £1m in 2011-12, rising to £2.2m in 2012-13. The shares are trading on seven times prospective earnings for 2012-13.

Download the latest AIM Journal from http://www.hubinvest.com/AIMPDFNovember2011_26.pdf

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