SHARES dropped 14 per cent at Omega Diagnostics as it announced pre-tax profits were up but didn't produce guidance on a key product as it reaches commercialisation.
The markets appeared to react as the Alva-based life sciences firm delayed an update on its CD4 HIV testing kit which is now not expected until the end of the month.
David Evans, Omega chairman, said in his outlook that the Clackmannanshire company's "challenges are not inconsequential".
The report brought a drop to 14.25p as Omega, which focuses on food, allergy and disease diagnostics, posted interim results for the six months ended September 30, 2018.
On revenues of £5.3m - down 27% - an adjusted pre-tax loss of £500,000 was reported, set against a profit of £200,000 for the same period last year.
Read more: Omega shares dip as firm reveals effects of restructuring
However, exceptional items of £1.45 million led to a pre-tax profit of £800,000.
A company restructuring included the closure of plants in Germany and India and sale of legacy infectious disease business.
Colin King, Omega chief executive, above, said: "Our results are where we expected them to be.
"Obviously over the last six months we’ve gone through a period of restructuring the business.
"I’m pleased with how that’s going, and once we get that clear it allows us to completely focus on our key growth areas, which are food, allergy and our CD4 test.
"In terms of progress in those three areas, again I’m pleased with the progress we are making.
"Where we do expect to see significant revenue uplift is with CD4.
"In terms of CD4, we have two products, the 350 test which is used as a gatekeeper for starting treatment for HIV patients.
"We are targeting the countries where we believe that test will be adopted."
Read more: Scottish biotechnology firm hails progress made with HIV test
Progress is being made in Nigeria and Zimbabwe.
He added: "Both countries are in the process of doing an in-country evaluation and we expect them to be completed during January or February time, so we expect the first commercial order for CD4 to Nigeria in February or March, so that is great news.
"At this stage we had hoped to give a bit of guidance on what that would look like.
"Unfortunately we don’t have that just yet - we are still running through that with our partner.
"There is a key meeting next week in Nigeria and we will get a better feel for what that will look like when our meeting is concluded.
"But we do expect it to be significant for us.
"Where we see the higher potential is in the advanced disease test (the second CD4 product) that we are developing.
"Overall we are making good progress there."
Read more: Omega Diagnostics sells its infectious disease business for up to £2.175m
He said: "Probably the biggest challenge is where you can’t fully control your own destiny where you are working with other countries and they have to go through in-country evaluations, you always wish these things would go quicker than they do.
"They will happen, it is just more a case of timing that is probably the biggest frustration there."
He added: "I’m obviously speculating but my impression is that the markets were expecting us to guide on CD4 and obviously we haven’t given guidance there so there may be a little bit of disappointment on not guiding on CD4 but clearly what we want to do is when we do guide we get the numbers."
"By Christmas or early New Year we hopefully will be giving that guidance and hopefully that will get the share price back up again."
Kieron Harbinson, Omega finance director, said: "The overall message is that we’ve re-shaped the business, we are a leaner outfit and we’ve got three key product areas to focus on that can deliver growth."
Analysts at house broker FinnCap said the interim results were "in line with the October trading update, albeit complicated by the disposal of its legacy infectious diseases business, closure of loss-making German and Indian operations and exceptional profits/write-backs" and made no changes to its full year forecast which assumes an adjusted pre-tax profit of £200,000 in the second half.
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