IDH.L Regulatory News (IDH)

 14 September 2012

Immunodiagnostic Systems Holdings PLC

AGM Statement and Trading Update

Immunodiagnostic Systems Holdings PLC ("IDS" or "the Company" or "the Group"), a leading producer of manual and automated specialist diagnostic testing kits and instrumentation for the clinical and research markets, will today hold its Annual General Meeting at noon at its registered office at 10 Didcot Way, Boldon Business Park, Boldon, Tyne & Wear, NE35 9PD. At the meeting Chairman, Anthony Martin, will make the following statement to shareholders.

Strategy update

The Board continues to believe that IDS-iSYS' carefully selected portfolio of specialised assay panels provides the Group with a compelling market opportunity that will appeal to a range of laboratories which will be increasingly enhanced as further assays are successively launched.

The recent launches of 1,25 Dihydroxy vitamin D, renin and aldosterone automated assays have been well received in the market, although the timing of some of the launches were later than planned. There have also been some significant account openings with other automated assays, particularly IGF-1. As part of the Group's strategy of expanding its automated assay menu, all of these new automated assays have helped the placement rate of IDS-iSYS systems and reinforced the Board's belief in this core element of the Group's strategy.

The Board was delighted to announce the appointment of Patrik Dahlen as Chief Executive Officer in July 2012. Patrik will provide additional detail as to the Group's strategy at the interim results which are expected to be released in November 2012.

Trading Update

Unaudited revenues for the five months ended 31 August 2012 are £19.9m (2011: £22.7m) and reflect an adverse £0.5m impact of exchange differences between the two periods. The following revenue comparisons in this statement are reported at constant exchange rates. Like-for-like revenues reduced by 9% over the prior period. The five month period to 31 August 2011 included a £0.4m one off licence fee and no such fees were generated in the comparable period to 31 August 2012. This licence fee has been excluded from prior period revenue to calculate the like-for-like revenue variance.

IDS-iSYS revenues (excluding the one off licence fee in 2011) grew strongly by 15% over the prior period whereas manual revenues declined, as expected, by 19%, reflecting the continuing competitive environment of this market place and the transition of certain laboratories from manual to automated testing.

A total of 32 IDS-iSYS instruments have been sold or placed to reagent rental IDS end user customers during the period, net of returns, representing an increase of 18% over the installed base as at 31 March 2012. The Board has recently reviewed the criterion that is used to both classify instrument placements and also to define a live system. This has resulted in the following adjustments to the Group's installed base of IDS-iSYS instruments.

*Period reported is to 31 August 2012 representing five months of the Group's H1.

Average revenue per instrument from the Group's reagent rental accounts was £79,000 (31 March 2012: £84,000).

The volume of IDS-iSYS system placements with reagent rental IDS end user customers reported for the last two financial years has averaged 80 systems per year and it is expected to be at a similar level in the current financial year.

Operating costs are being carefully managed and remain in line with our expectations for the full year. Importantly, the Company has continued to be strongly cash generative over the first five months of the current financial year. Unaudited net cash as at 10 September 2012 was £11.0m, an increase of £4.2m from the reported net cash balances at 31 March 2012.

Outlook

The Board expects the impact of exchange rates compared to the prior year to continue to have an adverse effect on full year revenues. The earnings impact of this exchange difference is expected to be mitigated to some extent as the cost base of the Group's foreign currency denominated operations will generate a favourable variance.

The anticipated decline in manual vitamin D test volumes combined with more competitive pricing in this market continues to be in line with our expectations. The planned increase in IDS-iSYS derived revenues from new placements and an increasing number of automated assays, whilst encouraging, is however not materialising at a rate that will fully offset the ongoing manual revenue decline in the current financial year and accordingly the Board's expectation is that revenues for the year ending 31 March 2013 will be in the range of £48m to £50m.

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