Global growth pushes profits

Fast-growing biotech company IDS is expected to see profits rise by 74% this year as the business expands around the globe and becomes more efficient.

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Fast-growing biotech company IDS is expected to see profits rise by 74% this year as the business expands around the globe and becomes more efficient.

The South Tyneside drug test kit maker told investors of its upbeat forecast yesterday and broker Teather & Greenwood said it was increasing its estimates for the company's profits.

It makes testing kits which are used to help diagnose or monitor diseases, including osteoporosis and MRSA, or provide information for research.

IDS (Immunodiagnostic Systems) said it was benefiting from economies of scale as it sells larger volumes of its products than previously.

And so it expects pre-tax profits to hit £2.28m for the year to March 31, up from £1.31m last time - which it is particularly happy about because it says sales are set to increase by a strong, but not as striking, 20% to £9.9m. Paul Hailes, financial director, said: "We have been selling more of the products manufactured here in Boldon, and we have increased sales volumes by going direct to the end user, and now we are benefiting from economies of scale."

Mr Hailes said where IDS had been selling, as an example, 300 units of a product, it was now selling 900 or 1,200, which was much more efficient in manufacturing terms.

IDS also said its costs were "well under control" and trading in all of its main territories had increased year on year, as it had on all the group's key products.

The company said prospects for the new financial year looked buoyant.

IDS has established direct sales forces in the UK, US, Germany, France and has recently added Austria to that list. Managing director Dr Roger Duggan has also said he is keen to grow sales in India and China too.

Teather & Greenwood has not only increased its sales and profit forecasts for 2007, but for 2008 too - with pre-tax profits then expected to hit £2.95m on sales of £12.01m.

IDS is set to see even stronger performance when it rolls out its automation technology - where products that have only previously been supplied for manual use, will now be available to be used with bought or leased machinery.

IDS now has 58 staff in Boldon, with more at its overseas offices. One more is due to start in Finland next month, and another in the US.

Dr Duggan said more staff would be required in the North-East as IDS gets closer to launching automation - including in personnel and product support, and eventually the company will require engineers to service customers' machinery.

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