Immunodiagnostic Systems, the diagnostic testing kit concern originally backed by Growth Company Investor at 100p, continues to deliver in style.

Recent results for the year to March from ‘IDS’, which supplies kits to the clinical and research markets, showed profits surging more than 70% north to £3.8m on turnover increased 88% to approaching £18.7m. Given the strength of the results and a balance sheet bolstered by £3m cash, the management team was able to increase the dividend by 20% to 1.5p.

Demonstrating good organic growth, the numbers were also boosted by acquisitions, which contributed 80% of the top line increase. During a transformational year, IDS acquired Nordic Bioscience Diagnostics, a highly profitable Denmark-based concern, for £18.8m and Biocode Hycel, a Belgian kit-maker, for £19.4m in a transaction bringing with it state-of-the-art technology for automating diagnostic tests. Dubbed 3X3, this technology will help IDS gun for bigger contracts in bigger markets and is a source of much excitement for management and investors alike.

Revenues are forecast to surge strongly to £25.9m this year, driving profits higher to £5.8m, ahead of sales of £33.5m and £11m pre-tax for 2010. Based on the earnings estimate of 29.8p for 2010, the dividend-paying shares are swapping hands for just 8.3 times next year’s earnings, and with Oriel Securities’ Mike Mitchell setting a 340p target, we think there is much more to come from IDS, which remains very good value.

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Immunodiagnostic Systems	AIM	£47.56m	198.00p	0.00p
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