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Omega Diagnostics clarifies state of DHSC Covid-19 test contract
15th Mar 2021 11:37
(Sharecast News) - Medical diagnostics company Omega announced on Monday that a public sector contract disclosure had been published in relation to its contract with the Department of Health and Social Care (DHSC) to provide manufacturing capacity for Covid-19 lateral flow antigen testing.
The AIM-traded firm noted that in the disclosure, the contract was estimated to have a total value of £374m, adding that under UK public sector contract disclosure rules, that number necessarily represented a maximum of the potential value of the contract.
It cautioned that the number was an estimate or forecast of the actual likely value of purchase orders to be received by the company under the contract, adding that the value of future purchase orders could be "substantially less" than stated in the disclosure.
In addition, the board said the company was still awaiting confirmation that a Covid-19 lateral flow antigen test had passed the necessary performance evaluation, as as a result there were no such tests that could be manufactured by Omega on behalf of the government as yet.
It said that as soon as the DHSC had access to a test that had successfully passed performance evaluation, it would be licensed to Omega for manufacture.
When the test was ready for production, Omega said it expected to receive purchase orders from the DHSC for the tests and, where appropriate, it would make further statements given that the production volumes were expected to result in "substantial" revenue growth for the new financial year.
"Although the disclosed contract value for our agreement with the UK government is only an estimate of what the total value could be worth, it is very encouraging, and is an indication of the substantial impact on Omega's future performance that such a level of utilisation of our lateral flow test production capacity might have," said chief executive officer Colin King.
"We look forward to receiving notification of which test will be produced under this arrangement and we will update shareholders as these tests move towards production and purchase orders are received."
At 1533 GMT, shares in Omega Diagnostics Group were down 4.19% at 94.38p.
The AIM-traded firm noted that in the disclosure, the contract was estimated to have a total value of £374m, adding that under UK public sector contract disclosure rules, that number necessarily represented a maximum of the potential value of the contract.
It cautioned that the number was an estimate or forecast of the actual likely value of purchase orders to be received by the company under the contract, adding that the value of future purchase orders could be "substantially less" than stated in the disclosure.
In addition, the board said the company was still awaiting confirmation that a Covid-19 lateral flow antigen test had passed the necessary performance evaluation, as as a result there were no such tests that could be manufactured by Omega on behalf of the government as yet.
It said that as soon as the DHSC had access to a test that had successfully passed performance evaluation, it would be licensed to Omega for manufacture.
When the test was ready for production, Omega said it expected to receive purchase orders from the DHSC for the tests and, where appropriate, it would make further statements given that the production volumes were expected to result in "substantial" revenue growth for the new financial year.
"Although the disclosed contract value for our agreement with the UK government is only an estimate of what the total value could be worth, it is very encouraging, and is an indication of the substantial impact on Omega's future performance that such a level of utilisation of our lateral flow test production capacity might have," said chief executive officer Colin King.
"We look forward to receiving notification of which test will be produced under this arrangement and we will update shareholders as these tests move towards production and purchase orders are received."
At 1533 GMT, shares in Omega Diagnostics Group were down 4.19% at 94.38p.