Eye firm Optos counting on Daytona flagship product to revive earnings growth in 2014

* Optos posts 19 pct drop in annual revenue

* Cites drop in rental renewals but sees fast customergrowth

* Expects Daytona retina-screening product to drive rebound

By Freya Berry

LONDON, Nov 21 (Reuters) - Eye company Optos saidgrowing demand for a new flagship product in a number of marketswould underpin steady growth next year, after it posted an 19percent drop in annual revenue.

The retina-screening company said on Thursday that revenueand other operating income for the year to Sept. 30 fell to$159.5 million, in line with market expectations, as rentalrenewals on retina-screening equipment declined from theprevious year.

"Part of our strategy is to try to flatten out that renewalprofile," Chief Executive Roy Davis told Reuters, explainingthat most customers were on three-year rental contracts.

The drop in sales pushed adjusted pretax profit down 65percent to $9.2 million, but slightly ahead of market consensus.

"Despite what was a challenging year for us we actually sawstrong customer growth," Davis said.

The group, which generates 70 percent of its business in theUnited States, said its customer base rose by a quarter for theyear, its largest ever annual increase, with a further 25percent rise expected in 2014, according to analysts.

Take-up of Optos's new flagship ultra-widefield retinalimager Daytona was strong, the firm said. It has now installed5,945 retina-screening devices worldwide, with Daytona, whichwas launched in 2012, accounting for 1,474.

Davis said rising demand for Daytona, as well as moreclinical research on its eye healthcare technology and a broaderinternational reach left it "well placed to drive sales andprofitability in 2014".

Shares in Optos were last down 0.6 percent at 156.91 pounds.They have fallen 7.7 percent this year, missing out on a rallyin European stocks.

Numis analyst Charles Weston was upbeat about the outlook,pencilling in $20 million pretax profit for Optos in 2014.

"With Daytona momentum now being sustained, we areincreasingly confident that the company can deliver substantialprofit growth over the next few years," he said.

Optos was set up by Douglas Anderson in 1992 after hisfive-year old son went blind in one eye when a retinaldetachment was spotted too late.

The company said sales of all screening devices outsideAmerica rose 58 percent during the year through Sept. 30 and thecompany sold 410 Daytonas to major Australian opticians chainOPSM.

The global rise in diabetes, which causes one person to goblind every 30 seconds, has also created growth potential, withDavis pinpointing the Middle East as a particular opportunity.

Optos announced diluted pre-tax earnings per share of 12.4cents, down from 35.7 cents in 2012.