Axis-Shield edges closer to maiden dividend as it reveals sales surge will take sales above £100m mark

TURNOVER at medical testing kit maker Axis-Shield is tipped to break through the £100 million barrier, pushing the Dundee firm closer to a maiden dividend.

In a trading update ahead of its final results, the company yesterday revealed that annual sales have risen by about 6 per cent, taking the firm past the 100m mark.

Barring any "unforeseen circumstances", the board now expects to be in a position to recommend its maiden shareholder payout.

Axis also announced a "streamlining" of its distribution business, which will see its UK customer support team and warehouse being relocated from Cambridge to Dundee at a cost of 500,000, followed by immediate cost savings. A spokeswoman said no staff were being made redundant.

Chief executive Ian Gilham said: "Performance across the divisions has been robust and in line with our expectations, despite challenging market conditions.

"These results demonstrate Axis-Shield's focus on ensuring sustainable profitability and continued growth," he added.

Paul Cuddon, an analyst at KBC Peel Hunt, commenced coverage of Axis-Shield with a "buy" recommendation.

He said the stock should benefit from a "more severe flu season" - which would lead to a higher demand from doctors for its testing kits - and that the maiden dividend showed the firm's "growing maturity", adding that the shares were "very cheap".

Axis-Shield closed up 2.7 per cent at 270p.