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Omega Diagnostics shares sink on widened loss and stifled contract

Thu, 25th Nov 2021 11:19

(Alliance News) - Omega Diagnostics Group PLC on Thursday said it was disappointed, alongside its shareholders, at the lack of commitment from the UK Department of Health & Social Care regarding a Covid-19 test contract.

Shares in the firm sunk 30% to 28.01 pence each in London on Thursday morning.

The Alva, Scotland-based medical diagnostics company posted a pretax loss in six months to September 30, widened to GBP3.4 million from GBP1.8 million year before.

The loss was largely due to a rise in administration costs to GBP4.3 million from GBP2.6 million due to a of ramp up of work for a contract with the UK Department of Health & Social Care.

However, the company said it is disappointed with the lack of progress and commitment from the DHSC to place an order for the manufacture of Covid-19 lateral flow tests.

In February this year, Omega inked a contract with the DHSC to provide manufacturing capacity for Covid-19 lateral flow antigen tests.

Revenue however, jumped 78% to GBP5.7 million from GBP3.2 million.

"Whilst we still remain confident that we are well-positioned for future growth, we recognise that many investors will be disappointed in the lack of progress with the DHSC, and uncertainty about their future utilisation of our manufacturing capacity. This is a disappointment that we share," company says.

The company added: "Phase 2 of the contract, covering manufacturing, has not been activated and therefore no orders have been placed. We now have confirmation that the contract expired at the end of Phase 1, although both parties remain in dialogue and DHSC are still providing us with access to their Government-funded equipment to provide the infrastructure to grow our businesses."

By Greg Roxburgh; gregroxburgh@alliancenews.com

Copyright 2021 Alliance News Limited. All Rights Reserved.

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