By Samuel Indyk
Investing.com – Omega Diagnostics (LON:ODX) announced an 81% increase in revenue in the first half of the year but swung to a loss as the gross margin increased.
In the six months to 30th September, Omega recorded revenue of £5.73 million, up from £3.16 million in the same period of 2020. The company said its gross margin fell to 34.4% from 42.9%, caused by increased direct labour in anticipation of COVID-19 contract work from the UK Department of Health and Social Care (DHSC).
The AIM-listed company reported a statutory loss for the period of £2.75 million versus a profit of £0.28 million last year.
DHSC Contract
Earlier this year, Omega reached an agreement with the DHSC whereby they would provide manufacturing capacity for up to 200 million COVID-19 later flow antigen tests. The company had been in discussions with the government but has yet to receive details of a test to manufacture.
Omega said that there is no test to manufacture under the DHSC contract, but they remain in dialogue for commercial use of equipment.
The company said it is now shifting in focus for COVID-19 test manufacture to support commercial market opportunities.
“We are confident that revenues in the second half will see significant growth in Health & Nutrition and for our CD4 product, and while COVID-19 revenues remain extremely difficult to predict they are expected to be more reliant on commercial partnerships than UK Government supply opportunities and are impacted by the timing of pending regulatory approvals being granted,” Omega Diagnostics Chairman Simon Douglas said. “Overall, we expect to see an improved sales performance across the Group for the full year and to see losses reduced in the second half.”
At 09:16GMT, shares in Omega Diagnostics were trading lower by 27.4% at 29.05 pence per share.