Shares in engineered electronics-maker TT Electronics (TTG) leapt as much as 50% after the firm announced the launch of a ‘ground-breaking’ Covid-19 screening device.
Shortly after the market open shares were changing hands for 285p compared with last night’s close of 190p. By mid-morning they had settled around the 250p level, marking a 33% gain on the day.
TT has been working with UK start-up firm iAbra and its partners, including US chipmaking giant Intel, on the design and manufacture of a Covid screening device called Virolens.
The device uses microscopic holographic imaging and artificial intelligence software to detect the virus from a non-intrusive saliva swab test within just 20 seconds, and doesn’t need to be administered by healthcare professionals.
INITIAL TESTS POSITIVE
A first round of testing at Heathrow Airport was successful and iAbra is about to embark on clinical trials so that the device can be certified for medical use.
In theory it could allow safer access for everyone to places of work, transport and events by offering a quick, easy, repeatable and importantly low cost Covid test.
TT has so far received orders for devices and testing cartridges worth around £2 million, but iAbra has indicated that it intends to order up to £280 million worth of products, based on demand from more than a dozen end customers who are currently assessing the technology and subject to it meeting the necessary regulatory requirements.
STEP CHANGE IN GROWTH
To put this in perspective, last year TT recorded revenues of £478 million, up from £429m the previous year, meaning orders for Virolens could ‘deliver a step change in TT’s organic growth’ and accelerate reaching its target operating margins, according to chief executive Richard Tyson.
The firm will initially manufacture the device at its Hartlepool plant and is investing £5 million to support the launch. Further production is likely to require more capacity at other plants.
As Jefferies analyst Andy Douglas observed, today’s announcement is ‘not only fascinating and a good news story, the numbers quoted are very significant’, although there is ‘a potentially wide range of outcomes for follow-on orders’.
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