Omega Diagnostics (LON: ODX) shares plunged Wednesday after the company said full-year revenue is expected to be lower and they see an EBITDA loss.
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ODX shares are down more than 18% at the time of writing.
The company said that while demand for its food sensitivity tests remains robust, it has faced several headwinds that have impacted its ability to fulfill orders ahead of March 31, 2023. Therefore, even though its current order book is £2.5 million and it expects further orders, it has had to move several orders will move into FY24.
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As a result, Omega said it has become apparent that it has insufficient manufacturing capacity at its Littleport site to meet anticipated demand over the remainder of the current financial year. Omega's current and forecasted orders can no longer be fulfilled before the year's end, but the company says they will contribute to a “stronger than expected opening order book for FY24.”
It means the company now expects to experience significant revenue growth in FY24, as well as a return to positive EBITDA.
However, FY23 revenues from the company's Health and Nutrition business are now expected to be between £7.5 million and £8 million, resulting in an EBITDA loss from continuing operations of around £1 million.
Omega said it has identified several opportunities to improve near term operational efficiency and manufacturing capability and will invest £1 million from existing funds for the improvements, which includes a longer-term technology investment in production equipment.
“Whilst we have experienced production challenges in recent months, this is being addressed and we still are extremely confident of growing our service revenue and our installed base,” said Jag Grewal, Chief Executive Officer of Omega. “Introducing our new digital platform and signing new partnership agreements will help expand our footprint and drive revenue growth.”
Nevertheless, Omega stated that year-end cash levels are expected to remain substantial and will be around £5 million.
The company also confirmed it is now pursuing a partnership route into the US.
YOUR CAPITAL IS AT RISK. 76% OF RETAIL CFD ACCOUNTS LOSE MONEY.