Omega Diagnostics Group PLC - Alva, Scotland-based diagnostics company - Expects annual revenue in the year that ended March 31 to be GBP7.5 million from continuing operations, down from GBP8.6 million a year before. This is in line with its guidance provided in January. Due to "lower-than-expected" production yields and higher costs for raw materials, its loss before interest, tax, depreciation and amortisation is now expected to be around GBP2.0 million. Back in September, at the time of its annual results, Omega had targeted breakeven Ebitda. Then in January, it guided for an Ebitda loss of around GBP1.0 million.
Omega says demand for its food sensitivity tests remains strong with an opening book of GBP2.4 million for financial 2024. Looking ahead, says guidance on financial 2024 is under review until the results of the production improvement plan are known, but maintains confident that the new year will witness significant revenue growth and an improving Ebitda performance. The firm also notes its dispute continues with the Department of Health & Social Care over a GBP2.5 million payment related to Covid-19 lateral flow tests. A formal mediation meeting is scheduled to take place late this month. "It is not clear what the outcome of this meeting will be or whether the outcome will be disclosable due to confidentiality arrangements," Omega says.
Chief Executive Officer Jag Grewal says: "Whilst it's disappointing to have challenges regarding the lower-than-expected production yields, we have taken swift action to bring in consultants to oversee a number of process improvements and are confident the actions being taken will deliver a material improvement in yield in the near term."
Current stock price: 2.65 pence each, down 8.6% on Monday around midday in London
12-month change: down 42%
By Xindi Wei, Alliance News reporter
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