Omega Diagnostics trading in line as it refocuses on nutrition
() , an international diagnostics testing business, announced its results for the year ended 31 March 2023, a year which has overseen the final steps of restructuring the business as a more focused company dedicated to delivering personalised nutrition diagnostics.
Revenues stood at £7.55m, with sales growing by c.80% in the UK. Despite this, revenues fell 12% year-on-year, resulting in adjusted EBITDA of -£2.0m (from +£0.3m in FY22) and pre-tax losses of £2.5m (from -£0.3m). Cash at 31 March was c.£5.1m.
2023 saw the final steps in the withdrawal from the Global Heath business, sold for £5.3m in July 2023, and its subsequent refocus on its Health and Nutrition business.
Looking ahead, Omega said the demand for its food sensitivity tests continues to be strong and the order book is holding up well, continuing to build from £2.4m as of March 31.
Omega will also continue to target the US market, continuing to build a wider menu of complementary gut health tests to sell.
Commenting, Simon Douglas, Chairman, Omega Diagnostics said: "This year has seen the final steps in the withdrawal from the Global Heath business through the divestment of the loss making CD4 business and the full relocation to our Health and Nutrition manufacturing site in Ely, Cambridgeshire. We have started our journey into the U.S. market and entered into two agreements with established testing laboratories which will be installing and validating our core food sensitivity testing product, FoodPrint®.
View from Vox
Omega's refocus on its Health and Nutrition Business is timely given the growing demand for food sensitivity tests, attributed to an increase in the number of food borne illnesses, evolution of regulatory environment, and the rise in consumer awareness against food intolerance. This is further shown through Omega’s strong order book of £2.4 million.
Omega's food sensitivity tests are made for those with a condition where there is a delayed adverse physiological response to particular foods, as opposed to an allergic reaction to food.
On projected forecasts, the broker finnCap said “We reintroduce forecasts for FY 2024, calling for revenues of £9.0m (+19%) and adjusted EBITDA breakeven. This translates to an adjusted pre-tax loss of £0.6m and adjusted EPS of -0.2p. We forecast cash at 31 March 2024 to be £3.2m, which would be sufficient to meet both capex and opex growth plans.”
On valuation, finnCap said Omega is trading at £2.7m over forecast year-end cash, implying an EV/Sales of 0.3x.
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