Omega to end ‘famine’ as investors react to loss

Omega Diagnostics non-executive chairman David Evans.
Omega Diagnostics non-executive chairman David Evans.

The chairman of a Scottish medical diagnostics firm has vowed to deliver shareholders’ “bread in their basket” after “years of famine”.

Omega Diagnostics non-executive chairman David Evans was speaking as the Alva-based company’s stock took a double digit plunge in early trading as it revealed a multi-million pound full year loss.

The group – which produces an HIV indicator kit and suite of allergen tests – saw sales drop from £14.24 million to £13.55m in the year to March 31.

The core business moved into the red with an operating loss of £990,337, but exceptional charges of £5.88m –primarily related to the closure of its Germany and India sites – took the bottom line loss before tax to £6.91m.

A tax credit of £265,404 was offset by exceptional items of £621,038, taking the loss after tax for the year to £7.26m.

In his overview of the year, Mr Evans said he was “extremely conscious of the level of criticism levelled at the board in terms of the underperformance of the business.”

However, he said the performance was “not borne out of fecklessness” but through various operational circumstances and a late recognition the business was “not sufficiently focused” for the resources it had available to it.

The results show revenues within the group’s largest operational division, food intolerance, fell by 6% to £7.56m.

The allergy and autoimmune unit turned in sales of £3.31m, down from £3.59m in 2017, while the infectious diseases operation and other revenues were 1% higher at £2.68m.

Mr Evans said investor feedback since the group’s April trading update had been valuable and given the board confidence in its strategic priorities.

He said the first stage in delivering value was the £2.1m sale of the infectious diseases business to Lab21 Healthcare in June.

Mr Evans said the sale gave the company the working capital it needed to significantly accelerate the commercialisation of HIV indicator test CD4, the “jewel in the crown” of the group’s assets.

“I am confident that we can deliver on the goals we have set with emphasis on realising in part value for shareholders,” Mr Evans said in his review of the year.

“I am also confident that we can deliver on CD4 and I look forward to updating you as we progress throughout the year.

“Ultimately, we are judged by our results and it may end up being a rather circuitous route to success, but I do believe that after many years of famine shareholders will see some bread in their basket by this time next year.

“The key thereafter will be to replenish that basket. I am confident we can achieve both.”

CEO Colin King – who stepped up to the top job after founder Andrew Shepherd’s retirement last year – said providing a shareholder return was key.

“That has been the whole point of what we have been working on,” he said.

“We have now tidied the business up and got the resources to deliver on the three product areas we are focusing on.

“I am optimistic we can deliver shareholder value in the short, medium and long term.”

Shares in Omega closed the trading session down 11.29% at 13.75p last night.