Omega Diagnostics gets shot in arm from weak pound

The weakening pound is fuelling double-digit sales growth at Omega Diagnostics as the Scottish firm posted a positive trading update yesterday.
By The Newsroom
Published 18th Oct 2016, 06:51 BST
Updated 25th Oct 2016, 17:11 BST

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Omega Diagnostics said the weaker pound has helped to boost its revenues. Picture: ContributedOmega Diagnostics said the weaker pound has helped to boost its revenues. Picture: Contributed
Omega Diagnostics said the weaker pound has helped to boost its revenues. Picture: Contributed

Shares in the group jumped as the Alva-based maker of medical testing kits revealed that turnover in the six months to 30 September lifted by 11 per cent on the same period last year.

Sales of £6.83 million on a constant currency basis during the period rose 3 per cent on last year due to factors including continuing strong demand in the US for food intolerance tests.

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The headline turnover figure was boosted by a £500,000 contribution from the weakening of sterling against the US dollar and euro.

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Omega secures £1.8m grant from Scottish Enterprise

The company also revealed that last week 41 of its allergen tests had met the requirements of European health and safety legislation and it was starting to see commercial progress.

“We have received a first purchase order from one end-user customer and we aim to fulfil this once we conclude a long-term supply contract with them in the very near future,” Omega Diagnostics said.

It added it was “continuing to advance discussions” over the longer term supply of allergy tests on a wider basis.

Chief executive Andrew Shepherd said progress across all Omega’s key business areas meant he was “looking to the future with increased confidence”.

Profits before tax at the company, which will announce its interim results on 21 November, are expected to be in line with management’s hopes.

The group also said that its new manufacturing facility in Pune, India, underwent a final factory inspection last month and it has now been recommended for a government licence to begin commercial operations.

Omega said it was on course to bring the facility online with malaria and pregnancy tests available for sale in the final quarter of the current financial year.

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“We believe our increased investment in infrastructure to support our core business and development opportunities provides a stronger

foundation for the future,” it said.

House broker FinnCap described the overall outlook for the company as “positive”, with progress being made across all divisions.

In August, Omega received £1.8m from Scottish Enterprise to help boost its workforce and ramp up its range of allergy testing products. It said the research and development grant would be used to accelerate the growth of its “menu” of allergens from 41 to 120 over the next three years “to cope with anticipated increasing demand”.

It will also recruit 14 extra members of staff at its headquarters where it currently employs about 50 people. The allergy diagnostic market is forecast to grow at a compound annual rate of 12.67 per cent by 2019.

Shares in Omega closed up 1.12p or 6.16 per cent at 19.38p.

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