Axis-Shield accelerates test kits roll-out

AXIS-SHIELD is to ramp up the expansion of its medical testing platform after faster than expected growth in 2009.

The Dundee-based group said it had installed 2,700 of its Afinion testing kits last year, 200 more than the market had expected.

Designed to be used in a doctor's office, the "point of care" kits provide results of tests for a range of conditions within minutes.

Chief executive Ian Gilham said the firm was taking advantage of the "clear current market superiority" of Afinion, increasing its target for machine installations in 2010 by 1,000 to 3,500.

The expansion will increase Axis-Shield's costs this year by about 2 million, as it increases the number of sales staff in the US, Germany, Switzerland and Norway.

Gilham said the group would also increase its research and development spending to raise the number of tests available on the Afinion platform.

Axis-Shield installs the machines at a loss, making a profit on sales of high-margin tests, a similar model to that used by razor blade manufacturers.

The group also announced plans to pay its maiden dividend when it declares its results for 2010, assuming the company performs in line with expectations.

Reaction to the statement was mixed, with the expansion expected to cut profits this year.

Chris Glasper at Brewin Dolphin said that while he was pleased with the 2009 roll-out, the expansion "is clearly not without risk". Shares closed up 12p at 399p.