16th Mar 2005 07:00
Advanced Medical Solutions Grp PLC16 March 2005 For Immediate Release 16 March 2005 Advanced Medical Solutions Group plc ("AMS" or "the Group") Preliminary Results for the Year Ended 31 December 2004 Winsford, UK: Advanced Medical Solutions Group plc (AIM: AMS), the globalwoundcare technology company, today announces its preliminary results for theyear ended 31 December 2004. Highlights • Group revenues up 22% to £11.0 million (2003: £9.0 million) • EBITDA at break-even (2003: £1.3 million loss) • Pre-tax losses halved to £1.0 million (2003: £2.3 million) • Post-tax losses reduced to £0.4 million (2003: £2.1 million) • Positive cash flow in second half-year resulting in cash of £3.2 million at year-end, sufficient to take Group through to profitability (2003: £3.6 million) • Management strategy of broadening routes to market covering branded partners, private label distributors and direct UK business proving successful both during the period and post year-end - Johnson & Johnson Wound Management launches silver alginate range in US in April and Europe in February 2005 - Further licensing and distribution deals signed including three year supply agreement with Cardinal Health for private label woundcare products in the US in July - Collaborative agreement signed with Nitto Medical for Japan in May - Good progress made with UK direct business: - LiquiBandTM tissue adhesive range broadened - ActivHeal(R) advanced woundcare range widely available throughout NHS following inclusion on contracts for England in December and Scotland in January 2005 Commenting on the results Dr. Geoffrey Vernon, Chairman of Advanced MedicalSolutions, said: "AMS has made considerable progress during 2004. The Group's achievement ofEBITDA break-even on revenue growth of 22% is a major milestone in moving theGroup to profitability." For further information, please contact: Advanced Medical Solutions On 16.03.05: +44 (0) 20 7466 5000Don Evans, Chief Executive Officer Thereafter: +44 (0) 1606 545508Mary Tavener, Finance Director www.admedsol.com Buchanan Communications Tel: +44 (0) 20 7466 5000Mark Court, Mary-Jane Johnson Notes to Editors: Advanced Medical Solutions is a leading company in the development andmanufacture of products for the $15 billion global woundcare market. Founded in 1991 and currently quoted on AIM, Advanced Medical Solutions isfocused on the design, development and manufacture of innovative andtechnologically advanced products for woundcare and other medical applications. In-house natural and synthetic polymer technology is used to provide advancedwound dressings based on the moist healing principle. AMS's resources ensure aunique position as a vertically integrated 'one stop shop' to provide allcategories of moist wound healing products. The Company has the capability tomove from product design and development through to production and deliveryready for distribution into customer markets. The acquisition of MedLogic in 2002 has brought AMS products and technology incyanoacrylate based tissue adhesives that offer benefits over sutures andstaples for closing wounds sold direct to hospitals or through distributors. AMS's technology and products currently serve the majority of the key globalmarkets with strategic partners including 3M, Novartis, Johnson & Johnson,Molnlycke Healthcare, Smith + Nephew and Cardinal Health. CHAIRMAN'S STATEMENT Overview I am pleased to report that AMS has made considerable progress during 2004.Group turnover of £11.0 million was up 22% on prior year with growth beingachieved across both business units, Advanced Woundcare and Wound Closure, andall geographic regions. The broadening of its routes to market offers a win-win situation for AMS, itscustomers and its partners. Improved revenues and margins are available to AMSfrom offering a generic woundcare range direct to the NHS in the UK and throughprivate label distributors in overseas markets. These generic products addressthe increasing cost pressures on healthcare budgets and the savings made bycustomers allow them to purchase new generation products. The Group continuesto fund the development of new differentiated products for licensing to itsmajor woundcare partners for sale under their leading brands. Pre-tax losses were halved to £1.0 million. Post-tax losses were reduced to£0.4 million following recognition of R&D tax credits and deferred tax assets.The Group reached EBITDA break-even. This is a major milestone in moving theGroup to profitability. Operating Review The Group's core focus remains the development and manufacture of advancedwoundcare and wound closure products for sale in hospitals and long-term carefacilities. Advanced woundcare products are marketed and distributed into the$1.5 billion global market through either major woundcare companies, such as 3M,Johnson & Johnson, Smith & Nephew and Molnlycke under their leading brands, orthrough private label distributors such as Cardinal Health. Products based uponsuperglue technology address the emerging tissue adhesives segment of the $5billion wound closure market. This market is currently accessed through adirect sales force in the UK and through distribution partners in Europe. Thedirect UK sales force also carries a full range of standard advanced woundcareproducts for sale into the NHS hospital and community care markets under ourActivHeal(R) brand. The Group has made steady progress in reducing its dependence on the performanceof its major branded partners for delivering revenue growth and profit. Thestrategy of broadening its routes to market by complementing these relationshipswith the provision of private label standard products to major distributors andexpanding its direct sales presence in the UK home market is proving to besuccessful. Advanced Woundcare Sales of £8.9 million were up 20%, double the current woundcare market growthrate. This growth was spread across partners in Europe and the US and providesa solid business base for the future. New partners were added during the periodwith the Group establishing a broad presence in the important Far East market. The launch of our fibre based silver alginate technology into the US and Europeby Johnson & Johnson Wound Management under their SilverCelTM brand provides AMSwith a strong entry into this dynamic market segment. Silver is a broad spectrum antimicrobial that helps to prevent infection. Incombination with alginate, a biopolymer derived from seaweed, AMS can provideproducts ideally suited to treat a wide variety of acute and chronic wounds. The three-year agreement with Cardinal Health announced in July is a major stepforward in building our private label business. AMS will provide a full rangeof advanced woundcare products for Cardinal Health, for US distribution, underits Allegiance brand. The inclusion of our ActivHeal(R) advanced woundcare range on the NHS contractsfor England and Scotland at the year-end was earlier than expected andillustrates the commitment of the NHS to cost management of woundcare budgets.Response to our offering from senior management, purchasing officers andpharmacists of hospital Trusts has been very positive and conversion on the backof technical and clinical evaluations at the user level is already underway in anumber of centres. Wound Closure The tissue adhesive business continues to show good growth with sales up 33% at£2.1 million maintaining our market leadership position in the use of adhesivesin the UK Accident and Emergency (A & E) arena. Adhesives are routinely usedfor closing facial and scalp wounds, particularly children's, and our LiquiBandTM product is being used to close around 30,000 wounds per month in the UK. The launch of SkinlinkTM, an anchored adhesive strip, has strengthened ourproduct portfolio and allows us to address the majority of wounds traditionallyclosed with stitches, staples and adhesive strips. The introduction of LiquiBand SurgicalTM throughout Europe during 2004 forclosure of surgical incisions in the operating room arena has taken our adhesivetechnology into the largest segment of the $5 billion wound closure market. Outlook The outlook for the Group remains positive. With an established business basecovering leading edge advanced woundcare and wound closure products andtechnology, a direct sales team focusing on the UK home market supported bystrong branded and private label partners, the Group is well positioned tocontinue to grow and to reach profitability within current cash. Whilst the prime focus remains taking the Group through to sustainableprofitability, the Board continues to review all strategic options to increaseshareholder value. I would like to thank all AMS employees for their efforts over the past year. The Group looks forward to delivering a high value woundcare technology companyfor our stakeholders. Dr. G. N. Vernon,Chairman Consolidated Profit and Loss AccountFor the year ended 31 December 2004 Year ended Year ended 31 December 31 December 2004 2003 £'000 £'000 Turnover 11,019 9,015Cost of sales (6,913) (5,809)Gross profit 4,106 3,206Distribution costs (153) (86)Administration costs (5,352) (5,859)Other operating income 328 304Operating loss (1,071) (2,435)Interest receivable and similar income 114 152Interest payable and similar charges (33) (35)Loss on ordinary activities before (990) (2,318)taxationTaxation 573 234Loss sustained for the year (417) (2,084)Basic and fully diluted loss per share (0.3)p (1.5)p The above results relate to continuing operations. There is no difference between reported and historical profits and losses. Statement of Total Recognised Gains and LossesFor the year ended 31 December 2004 Group Year ended Year ended 31 December 31 December 2004 2003 £'000 £'000 Loss for the financial year (417) (2,084)Currency translation differences on foreign currency net (13) (19)investments Total losses recognised since last annual report (430) (2,103) Reconciliation of Movements in Shareholders' FundsFor the year ended 31 December 2004 Group Company Year ended Year ended Year ended Year ended 31 December 31 December 31 December 31 December 2004 2003 2004 2003 £'000 £'000 £'000 £'000 Opening shareholders' funds 12,004 14,107 12,758 14,430Loss for the financial year (417) (2,084) (304) (1,672)Currency translation differences onforeign currency net investments (13) (19) - -Closing shareholders' funds 11,574 12,004 12,454 12,758 The loss for the Company includes an exceptional write-down in the value ofinvestments of £427k (2003: £1,842k). Balance SheetsAt 31 December 2004 Group Company 2004 2003 2004 2003 £'000 £'000 £'000 £'000Fixed assetsIntangible assets 2,070 2,238 - -Tangible assets 3,706 4,373 - -Investments - - 9,589 9,427 5,776 6,611 9,589 9,427Current assetsStocks 1,506 1,279 - -Debtors - due within one year 2,754 2,793 72 35 - due after more than 638 200 200 200one yearCash at bank and in hand 3,160 3,608 2,755 3,223 8,058 7,880 3,027 3,458Creditors: amounts falling duewithinone year (1,884) (2,139) (162) (127)Net current assets 6,174 5,741 2,865 3,331Total assets less current 11,950 12,352 12,454 12,758liabilitiesCreditors: amounts falling due aftermore than one year (376) (348) - - 11,574 12,004 12,454 12,758Capital and reservesCalled up share capital 11,782 11,782 11,782 11,782Share premium account 37,978 37,978 37,978 37,978Other reserve 1,531 1,531 - -Profit and loss account (39,717) (39,287) (37,306) (37,002)Equity shareholders' funds 11,574 12,004 12,454 12,758 Dr D W EvansChief Executive Officer 14 March 2005 Consolidated Cash Flow Statement For the year ended 31 December 2004 Year ended Year ended 31 December 31 December 2004 2003 £'000 £'000 Net cash outflow from operating activites (595) (1,708)Returns on investments and servicing of financeInterest received 102 158Interest element of finance lease rental and hire purchase (3) (5)paymentsInterest paid (30) (30) Net cash inflow from returns on investments and servicing 69 123of financeTaxation 389 153Capital expenditure and financial investmentPurchase of tangible fixed assets (284) (400)Sale of tangible fixed assets - 7 Net cash outflow for capital expenditure and financial (284) (393)investmentCash outflow before use of liquid resources and financing (421) (1,825)Management of liquid resourcesSale of term deposits 203 2,249FinancingRepayment of secured loan (11) (10) Net movement of capital element of finance lease rentaland hire purchase payments (3) (94) Net cash outflow from financing (14) (104) (Decrease)/increase in cash (232) 320 Notes to the Accounts 1. No dividend has been proposed. 2. The basic loss per share has been calculated on a weighted average number of shares in issue during the year, namely 142,082,536 (2003: 142,082,536) and loss of £417k (2003 : £2,084k) 3. This statement was approved by the Directors and agreed with the Group's auditors on 14 March 2005. A copy can be obtained from the Secretary at the Company's Head Office, Road Three, Winsford Industrial Estate, Winsford, Cheshire CW7 3PD. The accounting policies adopted for the Preliminary Results are consistent with the published accounts for year ended 31 December 2004. 4. The figures and financial information for the year 2004 do not constitute the statutory financial statements for that year. 5. The figures and financial information for the year 2003 do not constitute the statutory financial statements for that year. Those financial statements have been delivered to the Registrar and included in the auditors' report which was unqualified. 6. The Annual General Meeting will be held at The Park Royal Hotel, Stretton Road, Stretton, Warrington, Cheshire, WA4 4NS at 11:00am on Tuesday 24th May 2005. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Advanced Medical Solutions Group