StockMarketWire.com - Omega Diagnostics said due to careful management of costs and an improved segmental mix of business its underlying pretax profit is expected to be about £0.56m, some 30% up on the year.

It defined underlying pretax profit as before acquisition costs, share based payments, IFRS-related discount unwinds and amortisation of intangible assets. Turnover is expected to be £5.69m, slightly ahead of last year's H1 result (£5.59m).

First half trading performance is in line with management expectation, and ahead of last year, despite the strengthening effect of sterling reducing reported revenue by £0.25m in the period, as compared to the prior period.

The company's future growth continues to be strongly influenced by the prospects for Visitect CD4 but management does not now anticipate receipt of any revenues from this product in the current financial year.

Accordingly, management expects that this year's financial performance will be below that previously envisaged. While it is not uncommon that issues are discovered as one moves from small batch production to large-scale manufacturing, these are certainly frustrating events for both management and shareholders.

However, Omega must deal with these issues and solve them prior to launch, to ensure that only high quality, reliable product enters the market. The engagement with high level expertise is a significant step that the company feels will be instrumental in achieving resolution of the current issues.

Omega is convinced that Visitect CD4 remains in a strong prospective position with regard to the competition and will be a major success for the Group. Omega will however, continue to operate in an environment of timing uncertainty until the company resolve the issues it faces and evaluations lead to full market acceptance of the product.

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