Interim Results

Omega Diagnostics Group PLC 30 March 2007 OMEGA DIAGNOSTICS GROUP PLC ('Omega' or the 'Company') INTERIM RESULTS FOR THE 9 MONTH PERIOD ENDED 31 DECEMBER 2006 Omega, a medical diagnostic company whose business produces and sells a wide range of immunoassay and infectious disease in-vitro diagnostic (IVD) test kits and other products through its international distribution network announces results for the 9 months to 31 December 2006. The interim results to 31 December 2006 are the first for the enlarged group following admission to AIM on 18 September 2006. The Company has chosen not to adopt IAS 34, 'Interim financial statements', in preparing its interim results for the 9-month period to 31 December 2006. The interim statements included herein are unaudited. Prior to the acquisition the Company was an 'investing company as defined in the AIM Rules for Companies and, as such, the comparative financial information for the 9 month period to 31 December 2005 has not been included as it does not give holders of ordinary shares or potential investors additional information. 9 months to 12 months to 31 December 31 March 2006 2006* Turnover 1,503,698 2,143,806 Gross profit 637,104 868,145 Operating (loss)/profit (233,478) 131,650 Retained (loss)/profit before tax (238,026) 197,722 * Omega Diagnostic Limited, audited financial information prior to the acquisition on 18 September 2006, included for information purposes only. • Improvement in gross profit margin to 42.4% (40.5%: 31 March 2006) • European patent grant for Branched Peptide technology • Results reflect the investment in pursuing the acquisition strategy Omega operates in a niche market, in supplying tests for specific infectious diseases and other clinical conditions. The tests are based on Agglutination, Enzymeimmunoassay (EIA), Fluorescence and Rapid Test technologies. The infectious diseases include Syphilis, TB, Dengue Fever and Malaria. All products are designed for use in clinical laboratories and Rapid Tests are designed for use at the point of care. CHAIRMAN'S STATEMENT Financial Review Turnover Turnover has remained static throughout the period as the Company continues to operate in a highly competitive market. The board believes that future opportunities for growth in the Company's range of infectious disease test kits can be derived from the possible acquisition of new technologies. Gross Margin Gross margins have improved to 42.4% as the Company has continued to look for efficiencies within its operations. Goodwill Further to the Company's acquisition of Omega Diagnostics Ltd ('ODL') on 18 September 2006, in line with IFRS3 Business Combinations, the Directors believe ODL should be identified as the acquirer as it had the power to govern the financial and operating policies of the enlarged group through the appointment of its directors onto the Company's board and through the ongoing equity interests in the Company of the ODL shareholders. Accordingly, the acquisition has been treated as a reverse acquisition. As set out in IFRS3 B9, the cost of the business combination shall be allocated by measuring the identifiable assets and liabilities at their fair values at the acquisition date. Any excess of the cost of the combination over the acquirer's interest in the net fair value of those items shall be accounted for as goodwill. Goodwill arising on the acquisition has been calculated at £243,683. As the Company had minimal net assets and no inherent operations or trade at the time of the acquisition, there was no underlying cash generation to support the carrying value of goodwill. Accordingly, the board are of the opinion that the goodwill arising from the acquisition has been impaired and has therefore been written down in full. Results The net result for the period is a loss before tax of £238,026. In addition to the goodwill charge referred to above, the Company has incurred additional overheads in excess of £50,000 as a result of pursuing an acquisition-led strategy. Operating Review A European Patent has been granted in respect of the Company's Branched Peptide technology which has been exclusively licensed from the Medical Research Council (MRC). The Patent covers the enabling technology that allows assays to be developed with resulting superior sensitivity and specificity, which are key features of any new diagnostic test. The technology is currently being applied to a new test for Herpes Simplex Virus 2 (HSV-2) and it has already been shown to be effective in increasing the efficacy of other tests such as Human Immunodeficiency Virus (HIV). HSV is a chronic disease that infects over 1 billion people worldwide. It is also estimated that there are over 60 million adults in the US infected with HSV-2 and because HSV-2 is difficult to diagnose, the need for more accurate diagnosis is acute. There has been a delay to the planned launch of the Company's new test for HSV-2 as technical challenges took longer to overcome. These challenges have since been resolved and the Company is confident of being able to launch a product within the first half of the new year. Strategy Since re-admission on 18 September 2006, Omega has actively pursued its acquisition strategy. Discussions and negotiations are progressing with a number of opportunities but there can be no certainty as to the outcome or timing of these discussions at this stage. David Evans Chairman OMEGA DIAGNOSTICS GROUP PLC Consolidated Profit and Loss Account NINE months ended 31 DECEMBER 2006 Unaudited Audited 9 months to 12 months to 31 December 2006 31 March 2006* Notes TURNOVER 1,503,698 2,143,806 Cost of sales (866,594) (1,275,661) GROSS PROFIT 637,104 868,145 Selling & distribution costs (50,188) (80,469) Goodwill impairment (243,683) - Administrative expenses (576,711) (656,026) OPERATING (LOSS)/PROFIT (233,478) 131,650 Other income 7,015 96,011 (LOSS)/PROFIT on ordinary activities (226,463) 227,661 before interest and taxation Interest receivable 8,502 182 Interest payable (20,065) (30,121) (LOSS)/PROFIT ON ORDINARY ACTIVITIES (238,026) 197,722 BEFORE TAXATION Tax on loss on ordinary activities - 57,057 (LOSS)/PROFIT ON ORDINARY ACTIVITIES (238,026) 254,779 AFTER TAXATION Dividends - Retained profit for the period (238,026) 254,779 Basic and diluted losses per share 3 - basic (0.44p) - diluted (0.38p) All amounts relate to continuing activities. There are no recognised gains and losses other than those reported in the profit and loss account. Omega Diagnostic Limited, audited financial information prior to the acquisition on 18 September 2006, included for information purposes only. OMEGA DIAGNOSTICS GROUP PLC Consolidated Balance Sheet As at 31 DECEMBER 2006 Unaudited Audited As at As at 31 December 31 March 2006 2006* Notes Fixed Assets Intangible - - Tangible 2 80,090 91,641 80,090 91,641 Debtors: due after more than one year Current assets Stocks 280,432 258,298 Debtors 512,190 519,959 Cash at bank and in hand 724,245 8,401 1,516,867 786,658 Creditors: amounts falling due within (678,065) (748,463) one year Net current assets 838,802 38,195 Total assets less current liabilities 918,892 129,838 Creditors : amounts falling due after (31,600) (60,250) more than one year Net assets 887,292 66,921 Capital and reserves Called up share capital 860,175 80,036 Share premium 434,734 156,476 Shares to be issued under share based payment schemes Profit and loss account (407,617) (169,591) Total equity shareholders' funds 887,292 66,921 * Omega Diagnostic Limited, audited financial information prior to the acquisition on 18 September 2006, included for information purposes only. OMEGA DIAGNOSTICS GROUP PLC Consolidated Cash Flow Statement NINE months ended 31 DECEMBER 2006 Unaudited Audited 9 months to 12 months to 31 December 31 March 2006 2006* Notes Reconciliation of operating loss to net cash flow from operating activities Operating( loss)/profit (233,478) 131,650 Share based payments charged against operating profit Amortisation charges 248,031 96,011 Depreciation 21,177 35,273 Movements in working capital: (Increase)/decrease in stocks (22,133) 48,422 Decrease/(increase) in debtors 7,769 (14,341) (Decrease)/increase in creditors (2,131) (155,920) Net cash (outflow)/inflow from 19,235 141,095 operating activities Cash Flow Statement Net cash (outflow)/inflow from 19,235 141,095 operating activities Tax credit - 57,057 Returns on investments and servicing of (11,563) (29,939) finance Capital expenditure and financial (9,621) (12,390) investment Cash outflow before financing (1,949) 155,823 Financing (i) 763,560 (125,055) Increase/(decrease) in cash in the 761,611 30,768 period Reconciliation of net cash flow to movement in net debt Increase/(decrease) in cash in the 761,611 30,768 period Cash decrease/(increase) 51,151 125,055 from change in debt and lease financing Change in net (debt)/funds 812,762 155,823 Net (debt)/funds at the beginning of (ii) (418,804) (574,627) the period Net funds/(debt) at period end 393,958 (418,804) * Omega Diagnostic Limited, audited financial information prior to the acquisition on 18 September 2006, included for information purposes only. NOTES TO THE CASH FLOW STATEMENT FOR THE 9 MONTHS TO 31 DECEMBER 2006 Unaudited Audited 9 months to 12 months to 31 December 31 March 2006 2006 (i) FINANCING Issue of ordinary share capital 1,000,000 - Expenses paid in connection with share (185,289) - issue Loan repayments (51,151) (125,055) New loans 763,560 (125,055) (ii) analysis of changes in net (debt)/FUNDS Cash Flow As at 31 December 2006 Cash at bank 715,844 724,245 Debt 96,918 (330,287) 812,762 393,958 Notes to the Financial Statements 1. Basis of preparation The interim results for the nine months ended 31 December 2006 are unaudited and do not constitute accounts within the meaning of section 240 of the Companies Act 1985. The interim results have been drawn up using accounting policies and presentation consistent with those applied in the audited accounts for the period ended 31 March 2006. The information in respect of the period ended 31 March 2006 has been extracted from the statutory accounts for the period which has been delivered to the Registrar of Companies . The report of the auditors on those statutory accounts was unqualified. 2. Tangible fixed assets and depreciation Tangible fixed assets are stated at cost less depreciation. Depreciation is provided at rates calculated to write off the cost of fixed assets, less their estimated residual value, over their useful life on the following bases: Leasehold improvements - 10% straight line Plant and machinery - 25% straight line Office equipment - 25% straight line The company capitalises tangible fixed assets in accordance with Financial Reporting Standard 15 'Tangible Fixed Assets'. Expenditure of a revenue nature is taken to the profit and loss account when it is incurred. 3. Earnings per share Basic earnings per share is calculated on the loss on ordinary activities after taxation of £238,206 and on 53,713,909 ordinary shares, being the weighted average number in issue during the period. The calculation of diluted earnings per share is based on the consolidated loss on ordinary activities after taxation for the financial year of £238,206 and on 62,103,141 ordinary shares. This calculation is based on 53,713,909 ordinary shares diluted for the effect of 8,389,232 ordinary shares being the weighted average number of warrants and options in issue. Copies of this report are available to the public at the registered office of Omega Diagnostics Group plc at: One London Wall London EC2Y 5AB Directors' Responsibilities The interim report, including the financial information contained therein, is the responsibility of, and was approved by the directors on 30 March 2007. The continuing obligations of the AIM listing rules require that the accounting policies and presentation applied to the interim figures should be consistent with those applied in preparing the preceding annual accounts except where any changes, and the reasons for them, are disclosed. Date: 30 March 2007 Contact: Liam Murray, Nominated Adviser City Financial Associates Limited Telephone: 0207 090 7800 This information is provided by RNS The company news service from the London Stock Exchange

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