Omega Diagnostics shares fall as company reports loss
Omega Diagnostics shares fell as the company posted an annual loss caused by the scrapping of its allergens research division.
The company swung to a £6.8m net loss for the year to the end of March from a £974,253 profit a year earlier as revenue was little changed at £9.82m from £9.76m.
Profit was reduced by a £7.73m exceptional loss compared with £1.66m of gains a year earlier. The loss comprised the cost of writing off development of allergy products. Omega will continue to produce the 69 allergens developed for its partner Immunodiagnostic Systems' platform but is winding down further development.
Omega is instead concentrating on producing Covid-19 test kits. Its shares have more than quadrupled since the start of April on expectations for new revenue but have almost halved since peaking at about 72p in early June. The shares fell 9.3% to 34.5p at 09:55 BSt.
"We continued to be disappointed with sales progress in this area," interim Chairman William Rhodes said. "Given the costs to develop additional allergens, the slow pace of increasing sales, and the need for us to focus our resources on areas that promise to yield higher near-term returns, such as Covid-19 test kit development and production, we have taken the necessary steps to discontinue development of additional allergens."
Rhodes said the outlook for the new financial year was excellent as it works to develop new Covid-19 tests rapidly to sell hundreds of thousands or millions of units.
"We are meeting this challenge by deploying more of our company's resources in this area, as well as looking to expand our manufacturing capabilities to handle the tremendous increases in volume that will be needed," Rhodes said. Other product lines are growing again as the world resumes testing for other severe diseases while trying to combat Covid-19, he said.