Omega Diagnostics

Chaired by industry guru David Evans, tiny Omega Diagnostics has ambitious plans for recent niche acquisitions and is already rolling out their products abroad.

Omega, which reversed onto AIM in September 2006 alongside a £1m fundraising, has developed a niche portfolio of tests for infectious diseases, including dengue fever and syphilis. A total of 97% of its revenues come from overseas – Omega sells to more than 100 countries – with its leading markets being Brazil, Bangladesh and India.

Last September, Omega bought Genesis Diagnostics and CNS for an initial £5.7m, two companies with strong technology and products, yet, according to Omega chief executive Andrew Shepherd, without a strong sales and marketing focus and too small an export footprint. Omega’s strong marketing skills and large overseas network should be applied to the new companies’ products to great effect, with Genesis's and CNS’s technology helping to modernise Omega’s portfolio of tests.

CNS’s tests for food intolerance have so far been designed for the professional market, but a home-test version called the Food Detective has been given its European approval and a marketing push is imminent. US and Canadian approval processes are coming soon. A new ‘micro-assay’ version that can identify 200 food allergies in 90 minutes, has so far been sold to only one laboratory in Spain but has already generated ‘significant revenues at very high margins’, says Shepherd, adding that ‘we’re rolling it out in Paris and Italy as we speak’.

House broker Landsbanki is looking for pre-tax profits of £100,000 and 0.7p of earnings for the full year, ahead of a dramatic rise to £600,000 and 3p by 2009, when the prospective multiple drops from 40 to only 9.3. With plenty more to come from acquisitions and further deals likely, Omega could reward a speculative punt.

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