Optos turnaround on track as sales and revenues surge

Customers have been switching from renting Optos machines - which take pictures of the retina at the back of a patient's eye - to buying them.

The change helped to boost revenue by 10.3 per cent to $25.7 million (16m) during the three months to 31 December, the first quarter of Optos' financial year.

Some 85 per cent of the company's business is carried out in the United States and so the firm reports in dollars.

Turnover from leased machines fell from $22.7m to $20.7m but revenue from outright sales of devices more than made up for the fall, rising from $300,000 to $3.7m.

Optos generated $8m of cash during the quarter despite splashing out 9.2m in December on the acquisition of Opto Global, an Australian peer.

The Scottish firm will use Opto's sales network to sell its own products and will also offer the Australian companies devices for sale through its US business.

Chief executive Roy Davis is targeting 10 per cent revenue growth this year and expects next month's launch of a new device - the 200Tx - to contribute to the target.

Davis said: "We are pleased to report double-digit revenue growth and continued strong cash generation in the first quarter. Further growth is expected from the launch of our 200Tx device next month and as we begin to exploit the Opto Global opportunity."

Net debt rose to $29.4m compared with $21.1m at 1 October.

Gary Waanders, an analyst at Nomura, said: "Our year-end forecast revenue of $117m suggests sales growth of circa 10 per cent for the year and this update indicates that the company is on track to achieve this."

Waanders expects the "strong" cash generation from Optos to lead to net debt dropping to $18.5m by the end of the year.