Omega Diagnostics Group PLC Trading update
January 18 2023 - 02:00AM
UK Regulatory (RNS & others)
TIDMODX
RNS Number : 0469N
Omega Diagnostics Group PLC
18 January 2023
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES
OF ARTICLE 7 OF THE UK VERSION OF THE MARKET ABUSE REGULATION (EU)
NO.596/2014, WHICH FORMS PART OF UK LAW BY VIRTUE OF THE EUROPEAN
UNION (WITHDRAWAL) ACT 2018 ("UK MAR").
OMEGA DIAGNOSTICS GROUP PLC
("Omega", the "Company" or the "Group")
Trading update
Omega (AIM: ODX), the specialist medical diagnostics company
focused on promoting a personalised and functional approach to
health and nutrition, provides a trading update which reflects
lower than expected revenue, significant back-end phasing of
orders, but a stronger opening order book for FY24.
Whilst demand for Omega's food sensitivity tests remains strong
and the order book continues to grow, the Company has faced a
several headwinds that have impacted the ability to fulfill orders
ahead of 31 March 2023. Whilst the current order book is GBP2.5
million and further orders are expected, a number of orders will
move into FY24.
With the later than anticipated receipt of customer orders, it
has now become apparent that the Company has insufficient
manufacturing capacity in the Littleport site to meet anticipated
demand over the remainder of the current financial year, primarily
due to the availability of machine time for FoodPrint(R)
manufacture and COVID-related staff absences within key production
functions. Potential stockbuilding opportunities have been limited
in recent months, given the shelf life required by customers and
the close management of working capital ahead of the receipt of the
GBP4 million of CD4 deferred consideration.
The current and forecasted orders are no longer able to be
fulfilled before the year end, but will contribute to a stronger
than expected opening order book for FY24. This gives much improved
visibility into FY24 which is still expected to be a year of
significant revenue growth and a return to positive EBITDA. Full
year revenues from the Health and Nutrition business are now
expected to be in the range of GBP7.5-GBP8.0 million for the year
ended 31 March 2023. This will result in an EBITDA loss from
continuing operations of c. GBP1.0 million. Year-end cash levels
are expected to remain substantial and will be c. GBP 5.0 million,
a level that is more than adequate to allow Omega to deliver
against its growth strategy from existing funds.
The Company has identified a number of opportunities to improve
operational efficiency and manufacturing capability in the near
term. The Board also believe that longer term technology investment
in production equipment associated with FoodPrint(R) slide
manufacture will improve capacity, flexibility and overall
production yield and that a capital investment programme of c.
GBP1m can be delivered from existing funds and deliver improvements
once executed next year.
Finally, further to the recent announcement regarding US
expansion, the Company confirms it is now pursuing a partnership
route into the territory as a first step. Working via an
established partner network in the territory will ensure Omega can
benefit from established commercial infrastructure and
relationships whilst helping to gain a better understanding of the
market before committing the necessary capital and revenue
expenditure to set up its own laboratory as originally
envisaged.
Jag Grewal, Chief Executive Officer of Omega, said: "Whilst we
have experienced production challenges in recent months, this is
being addressed and we still are extremely confident of growing our
service revenue and our installed base. Introducing our new digital
platform and signing new partnership agreements will help expand
our footprint and drive revenue growth. We are now bringing forward
our plans to improve our manufacturing capabilities in order to
meet expected demand. We remain confident in our decision to focus
our growth plans on the US market, as it remains the largest market
for food sensitively testing globally. We still fully expect FY24
to be a year of significant revenue growth and a return to positive
EBITDA."
Contacts:
Omega Diagnostics Group PLC www.omegadx.com
Jag Grewal, Chief Executive Officer via Walbrook PR
Chris Lea, Chief Financial Officer
finnCap Ltd Tel: 020 7220 0500
Geoff Nash/Edward Whiley/George Dollemore (Corporate
Finance)
Alice Lane/H arriet Ward (ECM)
Walbrook PR Limited Tel: 020 7933 8780 or omega@walbrookpr.com
Paul McManus Mob: 07980 541 893
Lianne Applegarth Mob: 07584 391 303
Sam Allen Mob: 07502 558 258
About Omega Diagnostics Group PLC
Omega (AIM: ODX) is a specialist medical diagnostics company
focused on promoting a personalised and functional approach to
health and nutrition .
www.omegadx.com
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