Christmas Stock picks: Optos

In today’s volatile markets, a company with new products addressing real medical needs and with a multinational reach has much to commend it as a non-cyclical play. Medical retinal screening specialist Optos has pleased fans with annual pre-tax profits up 43 per cent to $25.1 million (£16.1 million).

The fully listed company, with a declared ambition to become the world leader in its field, increased turnover by 35 per cent to $143.3 million in the year to September, helped by a trend from rental to outright sales, which rose more than fourfold to $37.6 million. Steered by chief executive officer Roy Davis, Optos grew North American sales 25 per cent to $117.1 million, nearly 82 per cent of the total, and opened new markets in the European Union, Japan, Australia and the Middle East. 

Optos is pushing into ophthalmology in the USA and elsewhere and making acquisitions – Opto Global, which should break even in its first year, and Opko Instrumentation. Davis says Optos has felt no impact from the economic downturn and sees ample scope for further market penetration. 

New opportunities should be opened up by the commercial launch of Daytona, the company’s ‘next-generation’ desktop retinal device that should be on sale in 2012’s first quarter, which should enhance the company's medium-term prospects. At 194p, Optos shares, even though they pay no dividend as yet, should make mileage, whether or not they attract acquisitive interest.

Optos
Ticker: OPTS
Listing: Full List 
Sector: Health Care, Equipment & Services
Share price: 194p
Market cap: £138.25m
52-week high/low: 227.75p/129.75p