The deal with the Department of Health and Social Care (DHSC) for the firm’s lateral flow antigen tests forms part of the UK government’s well-publicised target of producing two million lateral flow tests per day.
As part of the contract, DHSC will loan a number of key pieces of manufacturing equipment. Omega said this would lead to the expansion in production capability at its Alva facility in Clackmannanshire, “to ensure the tests are made available as soon as possible”.
The group believes that it will have the capacity to produce some two million tests per week by the end of April, when combining the government-loaned equipment with its own manufacturing kit.
News of the contract came as the firm updated investors on trading saying that it had been encouraged by the recent sales performance at its food intolerance division.
Group revenue for the year to the end of March is expected to be about £9.3 million with an underlying loss in the region of £2.1m to £2.3m.
Despite the “considerable investment” in the scaling-up of production capacity, the firm’s year-end cash position is expected to be in the region of £5.5m to £6m.
Looking ahead, the group noted: “The timing of the antigen supply contract with the DHSC coming so close to the deadline of the financial year-end means that it will have very little impact, if any, on the results for the year ended 3 March 2021 but the group expects that this supply contract will lead to significant volumes of tests being delivered over the coming weeks and months.”
Chief executive Colin King said: “We are delighted to formalise our relationship with the UK government and to utilise our lateral flow test production capacity to support the Covid-19 mass testing programme being rolled out across this country.
“I appreciate that trading in our core business has been softer than expected for the current financial year, however the on-going opportunity for growth in CD4 testing and food intolerance revenues is unchanged.
“The new financial year will see this growth opportunity realised, and will also see the full impact of Covid-19 antigen testing, and so we are likely to deliver substantial revenue growth compared to this financial year which ends next month.”
He added: “These are very exciting times for the business and I am delighted that we can play a part in supporting the UK government’s national effort to control the spread of the coronavirus.”
Separately, Omega announced the appointment of Simon Douglas, who has over 25 years of board level experience across a variety of diagnostics, life science and biopharma companies, as its new non-executive chairman.
As a result of the appointment, Bill Rhodes has stepped down from his position as interim chairman with immediate effect, but he remains as a non-executive director of the company.
Rhodes said: “It has been my honour to serve as interim chairman for nearly three years now.”