- Omega Diagnostics Group reported a statutory loss of £2.75 million for the H1 2021, as its contract with the UK Department of Health and Social Care (DHSC) ended.
- Omega Diagnostics’ revenue from its Global Health division rose by 170% year-on-year to £1.56 million from £0.58 million.
The shares of Omega Diagnostics Group Plc (LON: ODX), a specialist provider of immunoassay and in-vitro diagnostics (IVD) products, are currently trading at GBX 27.75, down by 30.63% at 10:34 AM BST on 25 November 2021.
FTSE AIM-listed Omega Diagnostics Group is also a part of the UK Rapid Test Consortium (UK-RTC) engaged in the joint development and manufacturing of the COVID-19 point-of-care antibody test as part of the Government's five-pillar national COVID-19 testing strategy.
What led to the slump in share prices?
Omega Diagnostics Group’s share price declined dramatically after the company announced its interim results for the first half ended 30 September 2021. It reported a statutory loss of £2.75 million for the H1 2021, as its contract with the UK Department of Health and Social Care (DHSC) expired. The company’s loss was higher than the previous year’s £0.28 million.
Omega Diagnostics said that the UK DHSC did not provide the license required for manufacturing COVID-19 tests, and therefore, the second phase of the contract was not renewed, and hence no new orders were placed.
The medical-diagnostics company firm reported a loss before taxation of £3.14 million ($4.5 million) for the six months ended 30 September. Its revenues from operations, however, rose by 81% year-on-year to £5.73 million in H1 2021 compared to £3.16 million in H1 2020, driven by significant advances in the company’s Global Health and Health and Nutrition business segments.
Omega Diagnostics’ Health and Nutrition revenue grew 62% to £4.17 million in H1 2021 compared to the previous year’s £2.58 million, as the division recovered from the impact of the pandemic. Sales of FoodPrint® returned to pre-pandemic levels, representing year-on-year growth of 191% to £2.76 million.
While Omega Diagnostics’ revenue from its Global Health division rose by 170% year-on-year to £1.56 million from £0.58 million. In the first half, majority of the COVID-19 revenues were driven by the signing of business contracts for the manufacture and assembly of antigen test kits.
Future growth plans
Despite the lack of renewal of government contracts, Omega Diagnostics remains optimistic about future growth prospects. In Health & Nutrition, the company aims to capture opportunities in the Chinese and US markets and introduce new products in the microbiome and nutrigenomics categories. Additionally, the company is strategising to improve operational efficiencies and control costs.