SHARES in Omega Diagnostics, the Scottish biotech business, sank nearly 13 per cent as the firm posted delayed results.
The Alva-based company reported revenues down 28% to £9.76 million, against £13.55m, which it said reflected divestitures, and narrowed adjusted losses before tax of £300,000, against £730,000, as it unveiled its final results for the year ended March 31, 2019.
Since August when the firm pushed its results back for “further time to gain clarity regarding certain ongoing commercial discussions”, it has announced a new partnership in China and, last week, said one of its HIV-related testing kits has been added to a global procurement list.
In its statement to the London Stock Exchange, however, it noted “the existence of material uncertainties with respect to timing of approvals and receipt of significant purchase orders and the resulting impact on short-term working capital requirements”.
It said Ebitda from continuing operations was £200,000 against a loss of £800,000, and like-for-like revenue of continuing operations increased by 5% to £8.75m. Statutory profit was £970,000 against a loss of £7.27m.
READ MORE: Omega shares rise after news on HIV kit
The firm also announced that it has conditionally raised £1.7m in a placing and subscription fundraiser.
It said the net proceeds of the fundraising will be used for working capital purposes and to continue the commercialisation of both versions of its Visitect CD4 test.
The issue price represents a discount of approximately 15.25% to the closing mid-market price of Omega’s existing ordinary shares of 11.8 pence on September 20, 2019.
The Clackmannanshire company is focused on allergy, food intolerance and infectious disease.
It highlighted the closure of Germany and Pune sites “eliminating associated losses” and the disposal of legacy infectious disease business to Novacyt SA for proceeds of £1.98m, adding that its food intolerance division returned to growth and the progress made in China in its results.
READ MORE: Omega secures first order for HIV test kit from Zimbabwe
Omega said the results “reflect the actions taken last year as part of the board’s strategic review to divest the non-core infectious disease business and to close the German allergy business”.
William Rhodes, interim non-executive chairman, said: “We have made substantial, industry-leading advances in the area of CD4 testing, having achieved commercial launch of the first, and still only, handheld, lateral flow CD4 test and have rapidly progressed the Advanced Disease test to commercial launch as well.
“We are confident that we will receive the necessary approvals for CD4 but note the existence of material uncertainties with respect to timing of approvals and receipt of significant purchase orders and the resulting impact on short-term working capital requirements."
READ MORE: Omega results delayed to gain clarity on deal talks
He said: "In recognising the existence of material uncertainties, we are encouraged as our existing and new shareholders have committed to invest £1.7m subject only to approval at the forthcoming general meeting; our Visitect CD4 Advanced Disease test has received ERPD approval;
"Our new Chinese partner for Food Detective has placed two significant purchase orders; our partner, IDS, has committed resources and trained its sales personnel, with Omega’s involvement, to focus on and build the market for our allergy tests; and we continue to explore unlocking the value within our three business units, whilst still managing to progress all three of them, namely, CD4 testing, allergy and food intolerance testing.”
Mr Rhodes will continue in the role until a new chairman is recruited after David Evans stood down in December.
The firm earlier unveiled a further order from a new partner in China, worth about £400,000, for a food-intolerance test, which followed a separate order from China, worth £290,000, announced in August.
One of its products, the Visitect CD4 Advanced Disease kit, detects when CD4 cell counts in HIV patients have fallen to such a level that they should be taken off antiretroviral drugs until such time as their immune system is strong enough to resume treatment.
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