Optos eyes expansion routes

Retinal imaging specialist Optos plans to push into new markets after a first-half turnaround to £1.8m pre-tax profits.

Chief executive officer Roy Davis says the fully-listed company, which provides wide-imaging proprietary eye tests capable of picking up early signs of diabetes and other non-optical illnesses around the peripheries of patients' eyes, is preparing to expand its drive beyond optometrists, who sell or rent the screening equipment, and target opthalmologists, who treat eye diseases.

Davis, who has been steering Optos towards a leaner, more streamlined and commercial approach, says opthalmologists would enhance the company's medical status and thus help win new business. He is also preparing a drive for Optos products in continental Europe and Asia, where he sees big opportunities.

At present, Optos, which lost $3.8m (£2.5m) in the year to last September on $97.2m turnover, does 90% of its business in the USA, where awareness of the advantages of medical screening is more ingrained than over here, and Davis argues that there are big potential markets to be tapped elsewhere. Optos, which has $170m of future contract revenues already booked, is working on introducing new products, including the HRA AF addressing autofluorescence.

Acquisitions are also on the cards. Patents on Optos technology expire in 2014, but Davis contends that the company's current strong market presence will weather that change.

Analysts see Optos as capable of more than £5m pre-tax in the year to September, with £9.6m on the cards for 2010-11. At 105p, the shares could repay a punt.