Key points:
- Omega Diagnostics (ODX) shares plunged 12.7% on its annual update.
- Investors ignored the significant surge in its revenues compared to 2020.
- However, they were more concerned about the unresolved DHSC tussle.
The Omega Diagnostics Group Plc (LON: ODX) share price plunged by 12.7% after releasing a mostly positive annual operations update, which did not resonate well with shareholders.
The medical diagnostics company revealed that it expects to report a 41% increase in revenues generated during the fiscal year ended 31 March 2022. The company expects its revenues to surge 41% to £12.3 million compared to the £8.7 million recorded in the previous year.
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Omega attributed the higher revenues to its Health and Nutrition (H&N) division, contributing £8.6 million, significantly improving on the £6.8 million generated during the 2020 fiscal year.
The surge in revenues from the H&N division was driven by a massive improvement in Food Print® product sales that soared 82% on an annualised basis. The company reiterated that the H&N division is one of its key areas of focus since it had identified significant growth potential in the US and China for its Food Print® products.
Omega’s Global Health division also registered remarkable improvements after sales surged 97% to £3.8 million versus the £1.9 million recorded in 2020. The growth was fueled by CD4 sales, which rose to £1.0 million from £0.1 million.
The company noted that high demand for CD4 testing in countries with a high prevalence of HIV combined with rising demand from aid agencies and non-governmental organisations were responsible for the soaring CD4 revenues.
ODX confirmed that its current order book was higher than its current production and that long term demand remained constant as it moves on with the roll-out of its VISITECT® CD4 Advanced Disease test.
Omega said that it was still considering multiple options for its CD4 business despite shareholders voting against the disposal of the business. However, investors were not happy to see that the firm was willing to go against the wishes of its shareholders.
Furthermore, Omega revealed that revenues from its COVID-19 business rose to £2.6 million from the £1.7 million recorded in 2020. However, the company expects its COVID-19 revenues to remain minimal over the long term as it focuses on other growth areas.
The company said it submitted the additional information required for the CE-Mark application for its VISITECT® COVID-19 antigen test by the 31 March 2022 deadline. Still, some of the data were not available at submission.
Omega still has an ongoing dispute with the DHSC and was waiting for a response from the government body to its last correspondence sent on 8 February 2022. As a result, investors were concerned that the company’s tussle with the DHSC was still unresolved.
*This is not investment advice. Always do your due diligence before making investment decisions.
Omega Diagnostics share price.
Omega Diagnostics’ share price plunged 12.68% to trade at 4.89p, falling from Wednesday’s closing price of 5.60p.
