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Profits hike on cards at Omega Diagnostics

OMEGA Diagnostics is on course to report a 10% hike in half-year profits and hopes to give an update on its heavily anticipated HIV test kit before the end of the month.

Turnover is expected to show a modest 1% rise from £5.53 million to £5.59m in the six months to September 30.

Yesterday, the life sciences firm said revenue from food intolerance products has grown by 9% from £2.06m to £2.25m while the allergy and autoimmune division saw 2% growth from £2.02m to £2.06m. However, there was a 12% fall in infectious disease and other income from £1.45m to £1.28m, which Omega said was because of one UK-based customer failing to meet its minimum contractual obligations. Omega confirmed that situation has now been resolved.

Underlying profit before tax in the period is likely to be 10% ahead of the £380,000 recorded in the same period of 2012.

The CD4 test kit for HIV was initially pencilled in to begin production in autumn this year but Omega, which raised £4m to help with the roll-out of the product, has already suggested that it is unlikely to be ready before the end of 2013. An update on the timeline for the launch will be given in the next fortnight and Omega said it is still working on a manufacturing protocol.

Kieron Harbinson, finance director, said: "There is a series of experiments which are ongoing and the intention is by the end of October we will have a clearer idea of the timetable through to the end of December."

The portable kit, based on technology developed by the Burnet Institute in Australia, can determine if an HIV patient's white blood cell count has fallen to a level where retroviral drugs are needed without a need to send the results to a laboratory. It is thought to have generated a great deal of interest from non-governmental organisations (NGO) working in developing countries.

Mr Harbinson said: "The CD4 test is the biggest and largest near-term opportunity for us."

Alongside that, Omega said work on allergy tests for the IDS-iSYS system, which is used in laboratories around the world, has been progressing.

Omega said it has added three additional scientists and a further three iSYS instruments, bringing the total to seven, as it hopes to launch a panel of up to 40 tests in the current financial year.

Further information on the allergy tests will be released at an interim results announcement in November.

The company added: "Overall, trading in the first half is in line with management expectation. The ability to meet expectation in the second half will require further growth in the core business and a successful outcome to the CD4 technology transfer to enable a contribution to be made before the end of the financial year."

Analysts at Finncap said: "We still anticipate the launch of the automated allergy assays by the end of the current financial year.

"Performance for the full year in line with our estimates is predicated on continued growth of the existing businesses and a successful conclusion to the technology transfer of Visitect CD4 to full-scale production in order to satisfy NGO orders.

"Our estimates include a contribution from this product to the full-year result."

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