Immunodiagnostic Systems warns of revenue decline

Immunodiagnostic Systems confirmed sales will fall year-on-year as demand trends have not improved substantially since November, while significant asset write-downs could send it into the red.

Total revenues are expected to fall 13.3% to roughly £39m for the year to 31 March, the AIM-listed company said, while also warning that it expects to make "significant asset write-down of goodwill and capitalized costs", though the level was unquantified it stated these would not affect cash levels.

Closing cash equivalents were £26.6m at year end, up from £23.5m at the end of September.

The company, which provides immune diagnostic assays to clinical laboratories, has been hit by declining demand for its manual tests as the industry moves towards its and rivals' automated tests.

Furthermore, it confirmed demand for its automated vitamin-D tests was continuing to be hit by larger laboratories moving to high-throughput 'workhorse' analyzers when their contracts with Immunodiagnostic Systems come up for renewal, with a net new direct placements for the year were down 12, only a slight increase from the -10 in the first half of the year.

Due to instrument returns, the total number of instruments sold to or placed with distributors or OEM partners during the year was a net 35, down from 49 the previous year, with 24 placements in the second half versus 11 in the first.

IDS, which will announce preliminary results on 22 June, said it expects the revenue trends to continue into the current financial year.

Since Patricio Lacalle joined as chief executive a year ago, the company has begun to focus more on universities, reference laboratories and physician office laboratories as part of his 'four pillars' strategy to broaden the automated assay menu, increasing net new placements, focus on costs and efficiencies and corporate development.

The shares were down to their lowest level since the financial crisis, falling 16% to 158p by 1000 BST on Monday.