After quiet 2009, a 'normal' flu season a boost for Axis-Shield

MEDICAL testing kit maker Axis-Shield yesterday reassured investors by saying a "more normal" flu season - following the previous winter's quiet spell - means the Dundee-based firm is on course to hit City expectations.

In an update to accompany its AGM, held in London, the firm said that trading in the 19 weeks to 13 May had "started well". But it warned that it was facing "currency headwinds" due to the weak pound.

Consensus forecasts are for pre-tax profits of 9.2m, up from 7.5m last year, with revenue expected to rise from 101.7m to between 108m and 110m.

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The company said: "Trading in 2011 has started well, with revenues and profitability in line with market expectations.

"Despite on-going currency headwinds, Axis-Shield has made an encouraging start to the current financial year.

"The board remains confident about the trading outlook for the remainder of the year and believes that the results for 2011 will be in line with current market expectations."

The comments should help reassure investors, who watched in dismay as shares fell by nearly 23 per cent following last year's first-quarter trading update, in which the company reported a "quiet" flu season leading to lower sales of its influenza-testing kits.

Julie Simmonds, an analyst at Collins Stewart, which carries a "hold" recommendation, said yesterday: "The statement indicates solid trading, with each of the areas that caused a problem last year showing a stabilisation, in particular a better flu season increasing sales and an encouraging start from direct distribution.

"This gives us comfort in our full-year forecasts, though currency headwinds make us cautious of an early upgrade to our estimates."

Singer analyst Elizabeth Klein added: "The shares have started to show some improved performance again, and remain one of the better value diagnostics plays at this time."

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