STRONG sales of vitamin D testing equipment at Immunodiagnostic Systems Holdings (IDS) mean the company is on course to push up its annual sales by an impressive 35%, it said yesterday.
The Boldon-based medical diagnostic company, which specialises in kits and machinery to find problems in bones and cartilage, said its turnover for the year to March 31 will be around £50.1m.
The trading update was welcomed by the City where analysts applauded the “strong” and “positive” figures from the group, which were ahead of expectations.
Brokers are now predicting the 2010/11 pre-tax profits to jump from last year’s £11.3m to be between £16m and £18m, with a further leap to around £24m the following year.
Sales of manual vitamin D testing kits were up by 27% to £27.9m from £22m last year, while the company also reported stronger sales of its specialist IDS-iSYS testing machine at £10.3m – up almost fourfold.
In the three years since it was launched, IDS has sold or placed 241 of the machines – 101 of these were in the second half of the financial year that has just finished. Income from the machines is worth more than a fifth of the group’s turnover.
IDS got the green light to sell the IDS-iSYS machines in the US last summer and this lucrative market is predicted to be a major source of income in the next few years.
A statement from Brewin Dolphin investment firm in Newcastle said: “IDS remains on track to deliver exceptional growth for the next few years on the back of a successful roll-out of the iSYS.
“Whilst we leave our forecasts unchanged for now, we believe there is scope for out-performance as the year progresses, particularly if the average revenue per machine metric can be maintained (we have factored in a 15% fall), although this will depend on successfully signing up new large accounts in the US.”
Investec Securities added: “More importantly, the average revenue per instrument has increased from £77,000 to £102,000, well ahead of the £82,400 assumed in our forecast.
“We suspect this has come from higher utilisation rates from US placements and this bodes well as IDS increases its US penetration.”
Although there is some concern about competition in the vitamin D testing sector, analysts Peel Hunt said IDS had superior equipment.
“In addition to having a very good vitamin D test, IDS has tests that provide clinicians with an understanding of the underlying problem often more complicated than a vitamin D deficiency alone,” it said in a statement. During the year, IDS also signed a deal to develop the Omega Diagnostics Group’s allergy products. The group’s full year results will be published on June 27.