SHARES in Omega Diagnostics have surged more than 18 per cent after a positive trading update which suggested problems with its long anticipated HIV testing kit are close to being resolved.

The AIM-listed company, which is based in Alva, Clackmannanshire, said it expects annual revenue to be up around four per cent to £12.1 million in spite of a £500,000 negative impact from foreign exchange.

Omega said its food intolerance and infectious disease testing divisions both showing solid growth although allergy and autoimmune revenue slipped nine per cent from £3.96m to £3.61m.

Underlying pre-tax profits are predicted to be around £1.4m in the 12 months to March 31 this year, up from £540,000.

The Visitect CD4 test for HIV provides a quick method of finding out if a person's white-blood-cell counts have fallen to levels where retroviral drug treatment is needed.

The product is likely to be of particular use in developing countries but initial field tests in Kenya showed variable performance.

Omega said it is now moving closer to a formal launch after bringing manufacturing in-house and increasing the number of sites available to test the devices.

Final testing is now taking place with Omega expecting to provide a further update before the end of this month. It added: "We believe we have identified and corrected the root cause issues that had previously led to test variability."

The company is also developing allergen products for the IDS-iSYS system, which is used in laboratories around the world.

Commercial quantities of 27 allergens are now being produced with beta evaluations to take place in Italy and Spain in the coming weeks.

Shares rose by as much as 20 per cent during the day before falling back slightly. They still closed the day up 2.38p to 15.25p.