Optos moves into black as European sales surge

OPTOS, the Dunfermline-based eye-care technology company, has banked a full-year profit of $1.6 million (£776,000), boosted by strong sales in its new European markets.

The company, which manufactures and installs devices which scan the human retina, recovered from losses of $1.1m in the previous 12 months, off the back of a 28 per cent surge in sales to $86.8m.

Strong sales in Europe, led by Germany, where revenues surged by 183 per cent, were the main revenue drivers, while North America alone generated $82.2m in sales in the year to the end of September.

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Optos - which reports in dollars - added that, while it was making forays into other European countries, such as France and Switzerland, Germany would remain its key market in the region due to the set-up of its eye health care system.

It said a decision would be made on a possible commercial launch of its products into the Japanese market in 2008.

Assistant company secretary John McNeil said: "Japan is the second-largest market in the world for ophthalmic products after the US. If we do decide to go there, it is an enormous market."

He added: "We are delighted with our pre-tax profits for the fiscal year of 2007 and we would fully expect to continue with this trend in 2008."

For the year to 30 September, 2008, Optos said it expected revenue growth of 20 per cent to 25 per cent over this year's result and added that contract renewal rates would be likely to continue to be above the company's target of 85 per cent. Currently, the rate stands at 89 per cent.

Optos chief executive Thomas Butts said: "Strong levels of new business in all of our markets generated excellent results for 2007. We are pleased that our technology is used as a standard-of-care measure in primary care and that the prospects for our new 'P200MA' device are so promising."

He added that the rise in eye-related conditions such as diabetes was constantly increasing Optos' market.

"The ultra wide-field image of the retina that our devices capture responds directly and uniquely to the demographic and lifestyle trends that are raising certain eye and non-ete diseases, including diabetes, to epidemic levels," he noted. "2008 will be an exciting year for Optos."

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Analyst Piper Jaffrey rated Optos' shares a buy in the short-term and added that the outlook was positive for the company.

Revenue at the firm is chiefly generated through pay-per-customer examinations from the sale of the company's optomap Retinal Exam by the practitioner to the patient. The number of pay-per-patient customer locations grew by 26 per cent in the 12-month period to 3,266.