| 20 September 2023 |
Interim Results for the six months ended 30 June 2023
Winsford, UK, 20 September 2023: Advanced Medical Solutions Group plc (AIM: AMS), the world-leading specialist in tissue-healing technologies, today announces its unaudited interim results for the six months ended 30 June 2023 (the “Period”).
Financial Highlights:
| H12023 | H12022 | Reported change | Change at constant currency¹ | |
| Revenue (£ million) | 63.1 | 58.3 | +8% | +5% |
| Adjusted Measures | ||||
| Adjusted² profit before tax (£ million) | 13.8 | 13.6 | +1% | |
| Adjusted² profit before tax margin % | 21.8% | 23.4% | -1.6pp | |
| Adjusted² diluted earnings per share (p) | 4.97 | 5.01 | -1% | |
| Reported Measures | ||||
| Profit before tax (£ million) | 11.8 | 12.3 | -5% | |
| Profit before tax margin % | 18.7% | 21.2% | -2.5pp | |
| Diluted earnings per share (p) | 4.06 | 4.42 | -8% | |
| Net operating cash flow (£ million) | 4.1 | 12.5 | -67% | |
| Net cash3 (£ million) | 69.1 | 75.3 | -8% | |
| Interim dividend per share (p) | 0.70p | 0.64p | +10% |
Business Highlights (including post period end):
The Group made significant progress in a number of key projects during the period which are expected to establish substantial, new commercial opportunities in the short to medium term. As previously highlighted, the results were impacted by the temporary de-stocking impact of the US LiquiBand® strategic growth initiative but included strong growth in other parts of the business.
Financial
· Revenue increased by 8% to £63.1 million (2022 H1: £58.3 million) driven by growth in non-US markets, which averaged 20% against the first half of last year
· Gross margins reduced to 56.5% (2022 H1: 58.9%) due to temporary adverse product mix
· Total investment in R&D increased to £6.0 million (2022 H1: £5.4 million), representing 9.5% (2022 H1: 9.3%) of revenue, as progress was made on key projects including new product development and Medical Device Regulation (“MDR”)
· The Group reports a 1% increase in adjusted profit before tax to £13.8 million (2022 H1: £13.6 million) with adjusted profit before tax margin of 21.8% (2022 H1: 23.4%)
· Net cash decreased to £69.1 million from a 2022 year-end position of £82.3 million (2022 H1: £75.3 million) following the acquisition of Connexicon Medical Ltd (“Connexicon”) in February
· Surgical Business Unit revenues increased to £39.4 million (2022 H1: £35.9 million), an increase of 5% at constant currency
· Woundcare Business Unit revenues increased to £23.7 million (2022 H1: £22.4 million), an increase of 4% at constant currency
· Given the Group’s strong net cash position and reflecting the Board’s continued confidence in the future, the proposed interim dividend is increased to 0.70p per share (2022 H1: 0.64p)
Operational
· Good progress towards establishing new US LiquiBand® distribution agreements with hospital partners and executing new route-to-market strategy. As previously reported, associated destocking was greater than expected but end-user sales were unaffected and the Board remains confident that this initiative will achieve its objective of creating the foundation for accelerated growth for LiquiBand® in the US
· Acquisition of Connexicon completed, adding to the Group’s ability to develop and commercialise innovative adhesive and sealant technologies and to offer the increased differentiation and exclusivity sought by our US partners. Integration is going well, financial performance is in line with initial expectations and its pipeline approvals are progressing well
· Recruitment of the Seal-G® and Seal-G® MIST human clinical trials completed in July 2023 with data to be made available for a European soft launch in H2 2023. Initial data shows significant reduction in leakage rates in cases using Seal-G®
Post Period End
· Announced 18 September, the Group has signed a US LiquiBandFix8® commercialisation agreement with TELA Bio Inc (“TELA Bio”) ahead of a September launch under the brand name LIQUIFIXTM, entering a new $200 million addressable market with a unique, differentiated product
· The Group can confirm very good progress has been made with all the new US LiquiBand® distribution agreements and is highly confident that the new route-to-market strategy will be fully operational and driving accelerated growth by the end of 2023
Commenting on the interim results, Chris Meredith, Chief Executive Officer of AMS, said: “I’m pleased to report first half growth at Group level driven by our diverse portfolio of products, despite the short-term disruption to US LiquiBand® sales and the changes to the Organogenesis royalty stream. This demonstrates the increasing strength of our existing portfolio which will play a big part in generating and sustaining stronger growth in the future. I am particularly excited at the breadth of opportunities now open to us as a number of new initiatives and product launches, such as LIQUIFIXTM in the US and Seal-G® in Europe, come into effect this year. With so many potential growth drivers in place, I remain confident that we will see accelerated growth from 2024.“
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