Omega Diagnostics Gp - Trading Update

Cambridge Nutritional Sciences

17/04/2023 07:00

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RNS Number : 3409W  Omega Diagnostics Group PLC  17 April 2023

 

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF
THE UK VERSION OF THE MARKET ABUSE REGULATION (EU) NO.596/2014, WHICH FORMS
PART OF UK LAW BY VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018 ("UK
MAR").

 

OMEGA DIAGNOSTICS GROUP PLC

("Omega", the "Company" or the "Group")

 

Trading update

 

Omega (AIM: ODX), the specialist medical diagnostics company focused on
promoting a personalised and functional approach to health and nutrition,
provides the following trading update for the year ended 31 March 2023.

 

The Company expects to report revenues of £7.5m from continuing operations
(2022: £8.6m), in line with the expected revenue range provided in the 18
January 2023 update. With lower-than-expected production yields and higher raw
material costs, the EBITDA loss for FY23 is now expected to be approximately
£2.0m. The year-end cash position was £5.0m, in-line with expectations, and
more than adequate to allow Omega to deliver against its growth strategy from
existing funds.

 

Demand for Omega's food sensitivity tests moving into the new financial year
remains strong with an opening order book for FY24 of £2.4m, and the Company
is taking action to improve operational efficiency and manufacturing
capability in the near term. Chartwell Consulting, a global specialist in
delivering operational performance improvements in healthcare manufacturing,
was appointed in February and over the coming months will continue to work
with Omega to deliver additional production yield improvements whilst reducing
the FoodPrint® slide manufacturing cycle time. Whilst the Company remains
confident that FY24 will be a year of significant revenue growth and an
improving EBITDA performance, guidance on FY24 is under review until the
results of the production improvement plan are known.

 

The Company also confirms that the new, purpose-built facility in Ely,
Cambridgeshire, has yet to be delivered by the landlord and the Company has
rejected the terms of the landlord's current proposal for delivery of the
site. The Company continues to consider all of its options in this regard. As
previously confirmed, an agreement has been reached to extend the Littleport
lease to June 2025, thus providing sufficient time to resolve the outstanding
issues and facilitate an orderly relocation in due course.

 

The Group remains in an ongoing dispute with the Department of Health and
Social Care regarding the potential repayment of a pre-production payment of
£2.5m under a contract to manufacture COVID-19 lateral flow tests and a
substantial counterclaim made in favour of the Company. A formal mediation
meeting is scheduled to take place in late April, although it is not clear
what the outcome of this meeting will be or whether the outcome will be
disclosable due to confidentiality arrangements.

 

In March 2023, Omega successful launched its, MyHealthTracker, a health and
wellbeing tool designed to be used alongside a trained healthcare
professional, allowing the patient to receive laboratory test results direct
to their smartphone thereby helping the patient make personalised changes to
their diet for optimal health. Access is by invitation only from an approved
healthcare professional with its main goal to elevate patient care by way of a
more personalised approach to health and wellbeing.

 

Following the two heads of term agreements already announced on 26 October
2022 and 14 November 2022 respectively, the bespoke microbiome and
nutrigenomic test reports are on track to be finalised for launch early in Q2
FY24. For a modest initial outlay, these tests have the potential to generate
more than £0.5m in additional revenue in the year ending 31 March 2024.

 

Omega remains confident about growth plans on the US market, the largest
market for food sensitively testing globally, and further to the announcement
of the first US purchase order ("PO") on 6 January 2023, the Company has now
received an additional PO for its FoodPrint® system from a second US
customer.

 

Jag Grewal, Chief Executive Officer of Omega, said: "As an international
diagnostic testing business that is passionate about improving lives around
the world by accurately informing health decisions, the recent launch of our
MyHealthTracker app helps our reach and connects us to our customers globally
while giving us a better understanding of gut health data and trends. It also
empowers people, via a healthcare practitioner, to become more proactive about
managing their health straight from their phone, which we believe is an
important step forward.

 

"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. The demand for our food sensitivity tests continues to be strong and the
order book is holding up well. We remain excited and confident for our
prospects in the US as we continue to build a wider menu of complementary gut
health tests to sell via our established channels and we look forward to
updating shareholders at our results in July."

 

Contacts:

 

 Omega Diagnostics Group PLC                               www.omegadx.com (http://www.omegadx.com/)
 Jag Grewal, Chief Executive Officer                       via Walbrook PR
 Chris Lea, Chief Financial Officer

 finnCap Ltd                                               Tel: 020 7220 0500
 Geoff Nash/Edward Whiley/George Dollemore (Corporate Finance)
 Alice Lane/Harriet Ward (ECM)

 Walbrook PR Limited            Tel: 020 7933 8780 or omega@walbrookpr.com (mailto:omega@walbrookpr.com)
 Paul McManus                   Mob: 07980 541 893
 Lianne Applegarth              Mob: 07584 391 303
 Sam Allen                      Mob: 07502 558 258

 

About Omega Diagnostics Group PLC

Omega (AIM: ODX) is a specialist medical diagnostics company focused on
promoting a personalised and functional approach to health and nutrition.

www.omegadx.com (http://www.omegadx.com/)

 

 

 

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