Axis-shield (LON:ASD) suffered the wrath of investors this morning who didn't take kindly to news that a mild flu season and heightened public awareness over the spread of swine flu had badly affected revenues at the in vitro diagnostics company. Reporting on its performance since the start of January, Axis-Shield said the relatively mild 2009/2010 season had particularly impacted on the sales of NycoCard, its single biggest revenue generator. As a result its shares were down by 23% at 319p. Nevertheless, the company insisted that its balance sheet remained strong and pointed to signs of progress elsewhere, particularly in its Point-of-Care division.
The company said that its problems in the year to date had been compounded by increasing evidence that continuing global uncertainty was contributing to a reduction in discretionary healthcare expenditure, which has seen slower growth than expected in sales of HbA1c tests and lower third party product sales by its distribution companies. As a result, revenues for the 18 weeks to the end of April 2010 were slightly above those for the same period in 2009 - adjusting for the sale of the non-core Plasmatec business in 2009 - but were lower than management expectations. The company warned that if the trends continued throughout 2010 there would be a material shortfall in revenues and profitability compared to expectations.
On a brighter note, at Axis-Shield's Point-of-Care (PoC) division, its installed base of Afinion instruments continued to grow, with some penetration in hitherto PoC-resistant markets such as the UK. Elsewhere, it said the March buy-back of US distribution rights from drugs giant Abbott would contribute to increased Afinion profitability in 2011 and beyond.
In March, Axis-Shield revealed that reported revenues in the year to December 31, 2009, had risen by 13.4% to £96.7m, with Point-of-Care sales up 24.2% to £42.6m and Afinion sales up 72.1% to £14.8m. Underlying pre-tax profits were up 80% to £8.1m.
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