The arrival of omicron in Australia has led to COVID test volumes spiking again and Australian Clinical Labs (ASX:ACL) is one of the companies benefiting.

This morning the company upgraded its guidance for the first half of FY22 for the second time in four months.

Again it credited the strong demand for COVID testing but also a positive performance of its non-COVID pathology business as well.

It previously tipped revenues between $437.5 million and $454 million and a profit between $86.3 million and $94.9 million.

But now it is tipping revenues to be between $497.3 million and $517.2 million, and a profit between $116.3 million and $128 million.

Australian Clinical Labs noted NSW and Victoria were strong where COVID-19 case numbers are higher in other states but also where residents can travel interstate once more but usually require pre-departure COVID tests.

“We anticipate heightened volumes of COVID-19 testing to continue during the remainder of FY22 due to the impacts of new variants and outbreaks, the lifting of travel restrictions and increased demand for both commercial and travel testing,” said CEO Melinda McGrath.

However, Australian Clinical Labs did not provide guidance for the full year noting COVID testing numbers were often volatile.

Shares in the company rose 9% this morning and are up over 35% since its listing earlier this year.

Australian Clinical Labs (ASX:ACL) share price chart


Other companies benefiting from COVID testing

While Australian Clinical Labs recently surpassed the $1 billion market capitalisation milestone, it is still a minnow compared to Healius (ASX:HLS) and Sonic Healthcare (ASX:SHL) which are currently capitalised at $3.35 billion and $21.48 billion respectively.

Both companies, like Australian Clinical Labs achieved bumper results in FY21 thanks to COVID tests as well as their other pathology services.

Sonic has been the most recent to provide a trading update, reporting revenue and earnings for the first four months of FY22 to be 5% and 16% higher than the prior corresponding period respectively.

This was off the back of a bumper FY21 result in which grew its net profit 149% to $1.3 billion and its revenue by 28% to $8.8 billion.

Healius likewise saw a bumper result in FY21 recording pre-tax earnings of $252.8 million – up 103% from the year before.

And both companies, along with Australian Clinical Labs, have been on the M&A trail recently with Healius buying Agilex Biolabs for $301.3 million and Sonic buying ProPath for an unspecified amount – with both transactions being revealed last week.

One small cap stock benefiting from the COVID test boom is Atomo Diagnostics (ASX:AT1) which provides rapid testing.

Rapid testing has only been permitted by the TGA in recent months and Atomo is one such provider. After selling less than 5,000 units in all of FY21, it told 100,000 units in the September quarter alone.