Recommended by Growth Company Investor at 100p, Immunodiagnostic Systems (IDS) is a growing, profitable, specialist in the design, production and sales of diagnostic testing kits for monitoring the amount of vitamin D in the blood.

Low levels of vitamin D in human blood serum can indicate a susceptibility to skeletal diseases such as osteoporosis or Paget’s disease, an illness that causes bone destruction and abnormal re-growth resulting in deformity. While the health community is now beginning to recognise the importance of monitoring levels of vitamin D in the human body as a diagnostic tool, IDS is enjoying a rise in sales of its ‘immunoassay kits’, which retail at around £800 each.

This is due to successful expansion of its distribution network in the UK, US, Germany and France. With the UK making up only 9% of the European share of the IVD (in vitro diagnostic) market, IDS’ expansion into direct distribution in France and Germany (20 and 22% of the market share respectively) has been a key growth driver for the business. This focus on direct distribution in core geographic territories has helped operating margins improve.

For the half to September, IDS scored a 579% pre-tax profits push – admittedly off a low base – to £387,000, on turnover lifted nearly 50% to £3.72m. In other upbeat news flow, IDS recently won the Queen’s Award for Enterprise towards the end of April, an indication of the company’s growing reputation.

A recent pre-close trading update assured figures for the year to March would meet market forecasts when they emerge in July. Howard Miller at Teather & Greenwood predicts sales growth of 40% to £7.6m, giving earnings of 7.6p, up from last year’s 2.7p. On a prospective p/e of 20.3, the shares no longer look particularly cheap, but remain well worth holding for further growth.