Unaudited Preliminary Results

Advanced Medical Solutions Group plc

("AMS" or the "Group" or the "Company")

Unaudited preliminary results for the year ended 31 December 2024

~ Strong underlying growth maintained, and excellent progress made integrating recent acquisitions ~

Winsford, UK: Advanced Medical Solutions Group plc (AIM: AMS), a world-leading specialist in tissue-healing technologies, today announces its unaudited preliminary results for the year ended 31 December 2024.

Financial Summary:

Business Highlights (including post Period end):

AMS is pleased to report Full Year 2024 results in line with consensus forecasts and excellent progress in integrating the recent acquisitions of Peters Surgical and Syntacoll.  

Operational

· Successful implementation of the new route to market strategy in late 2023 has resulted in strong growth from US LiquiBand® throughout 2024.

· Transformational acquisition of Peters Surgical SAS ("Peters Surgical") at an enterprise value of €132.5 million (£113 million) was completed on 1 July 2024. The acquisition added £37.2 million of revenue from the July acquisition date.

· Acquisition of Syntacoll GmbH ("Syntacoll") for €1 million on 1 March 2024, a specialist manufacturer of drug-eluting collagens has significantly strengthened the capacity and capability of the Group's existing Biosurgical business. The acquisition added £5.6 million of revenue from the March acquisition date.

· The full in-market launch of LIQUIFIXTM, the first atraumatic hernia fixation device in the US, resulted in better-than-expected initial orders. On the back of major Group Purchasing Organisation ("GPO") approvals, accelerated in-market growth is expected in 2025 and record monthly end user sales were recorded in January and February 2025.

Financial

· Group revenue increased by 43% at constant currency to £177.5 million (2023: £126.2 million), driven by strong growth in US LiquiBand®, other key surgical product categories and the acquisitions of Peters Surgical and Syntacoll. Excluding both acquisitions, group revenue increased by 10% at constant currency.

· Adjusted profit before tax increased by 14% to £29.4 million (2023: £25.9 million) and reported profit before tax decreased by 54% to £9.8 million (2023: £21.2 million) as a result of acquisition and integration costs.

· Net debt at 31 December 2024 stood at £55.8 million (2023: Net cash of £60.2 million) following the acquisition of Peters Surgical.

· Investment in R&D increased to £12.9 million (2023: £12.6 million), representing 7% of revenues (2023: 10%). Whilst the gross investment in R&D has increased following the addition of Peters Surgical, R&D expenditure as a proportion of revenue has been diluted by the acquisition and by reduced Medical Device Regulation ("MDR") related investment.

· Surgical Business Unit revenues (excluding Peters Surgical) increased to £98.6 million (2023: £79.1 million), an increase of 28% at constant currency, driven by strong performances from all key product categories.

· Woundcare Business Unit revenues decreased to £41.8 million (2023: £47.1 million), a decrease of 11% at reported and constant currency due to a number of factors. Strategic initiatives within the Woundcare business are being successfully implemented, which are expected to positively impact margins in 2025. 

· Reflecting management's ongoing confidence in the Group's outlook, the Board proposes an increased final dividend of 1.83p per share (2023: 1.66p) bringing the total proposed dividend to 2.60p per share (2023: 2.36p).

Commenting on the results Chris Meredith, Chief Executive Officer of AMS, said: "I am very pleased to report such a strong set of results during a year where AMS went through such a significant transformation. The integration of both Peters Surgical and Syntacoll has established the Group as a larger, more diverse tissue-healing specialist with a broader geographic reach. 2025 has started well and we remain confident that the strong, underlying momentum of our core business, combined with the broader portfolio, synergies and benefits from the acquisitions, will drive future strong topline growth and greater profitability."

Notes

1. Constant currency removes the effect of currency movements by re-translating the current year's performance at the previous year's exchange rates

2. Reconciled in the Financial Review

3. Reconciled in note 6 of the financial information

4. Net debt consists of cash and cash equivalents of £17.0 million and £72.8 million of borrowings, excluding the impact of IFRS16 as reconciled in note 7 of the financial information. (2023: £60.2 million of cash and £nil debt)

5. Growth excluding acquisitions excludes the impact of acquisitions in the year on a constant currency basis

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For further information, please visit www.admedsol.com or contact:

About Advanced Medical Solutions Group plc - see www.admedsol.com

AMS is a world-leading independent developer and manufacturer of innovative tissue-healing technology, focused on quality outcomes for patients and value for payers. AMS has a wide range of surgical products including tissue adhesives, sutures, haemostats, internal fixation devices and internal sealants, which it markets under its brands LiquiBand®, RESORBA®, LiquiBandFix8®, LIQUIFIX™, Peters Surgical, Ifabond, Vitalitec and Seal-G®. AMS also supplies wound care dressings such as silver alginates, alginates and foams through its ActivHeal® brand as well as under white label. Since 2019, the Group has made seven acquisitions: Sealantis, an Israeli developer of innovative internal sealants, Biomatlante, a French developer and manufacturer of surgical biomaterials, Raleigh, a leading UK coater and converter of woundcare and bio-diagnostics materials, AFS Medical, an Austrian specialist surgical business, Connexicon, an Irish tissue adhesives specialist, Syntacoll, a German specialist in collagen-based absorbable surgical implants and Peters Surgical, a global provider of specialty surgical sutures, mechanical haemostasis and internal cyanoacrylate devices.

AMS's products, manufactured in the UK, Germany, France, the Netherlands, Thailand, India, the Czech Republic and Israel, are sold globally via a network of multinational or regional partners and distributors, as well as via AMS's own direct sales forces in the UK, Germany, Austria, France, Poland, Benelux, India, the Czech Republic and Russia. The Group has R&D innovation hubs in the UK, Ireland, Germany, France and Israel. Established in 1991, the Group has more than 1,500 employees. For more information, please see www.admedsol.com.

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Chief Executive's Review

Summary and Outlook

Growth across all surgical product categories has resulted in a strong financial performance for the Group in the twelve months to December 2024, including a significant contribution from Peters Surgical from 1 July. The integration of Peters Surgical and Syntacoll has been a key focus in the second half of the year, and excellent progress has been made, supported by detailed operational plans to deliver further synergies and cost efficiencies from the enlarged Group over the next three years. 

The business has continued to perform well in Q1 2025, and the Board's expectations are in line with current consensus forecasts for the full year. As more revenue and operational synergies are generated, the Board expects further growth across the business in 2026 and 2027.

Surgical Business Unit

The Surgical Business Unit includes tissue adhesives, sutures, biosurgical devices and internal fixation devices marketed under the AMS brands LiquiBand®, RESORBA®, LiquiBandFix8®, LIQUIFIXTM, Peters Surgical, Ifabond, Vitalitec and Seal-G®.

Organic growth in the Surgical Business was driven by strong performances from LiquiBand® in the US, Traditional Closure, Other Distributed and Internal Fixation products. Revenue increased to £98.6 million (2023: £79.1 million) during the Period, an increase of 28% on a constant currency and 25% on a reported basis.

Advanced Closure

LiquiBand® is a range of topical skin adhesives, incorporating medical grade cyanoacrylate in combination with purpose-built applicators. These products are used to close and protect a broad variety of surgical and traumatic wounds.

LiquiBand® revenues increased in the Period by 28% on a constant currency basis and 25% on a reported currency basis driven by strong US growth.

New agreements, greater incentives and more brand differentiation for the Group's US partners were successfully implemented towards the end of 2023 and made a significant impact on Advanced Closure US revenue growth during the Period. Sales increased to £26.9 million (2023: £18.2 million), 52% at constant currency and 48% on a reported basis. This positive performance during the Period reflects improved partner engagement under the new distribution agreements, as well as the strength of the pipeline of new business. Reported sales were positively impacted by re-stocking of one of the Group's partners in H1 and the phasing of orders in Q4 related to some of the LiquiBand® products. This is expected to impact reported growth in the first half of 2025.

Outside the US, end user sales were not fully reflected in reported revenue due to the phasing of orders in some key markets. Stronger reported growth in Rest of World sales is expected to return this year.

Internal Fixation and Sealants

LiquiBandFix8®/LIQUIFIXTM is used to fix hernia meshes placed inside the body with accurately delivered individual drops of cyanoacrylate adhesive, instead of traditional sutures, tacks and staples.

Global supply of the LiquiBandFix8®/LIQUIFIXTM devices was affected by a supplier-driven quality issue in the year and although it has since been resolved, the issue did impact sales during 2024. Despite this, LiquiBandFix8®/LIQUIFIXTM revenues increased by 30% on a constant currency basis and by 28% on a reported basis to £6.4 million (2023: £5.0 million), following the successful US launch through our distribution partner TELA Bio.

Having already obtained listings for LIQUIFIXTM from two important US GPOs, the company now expects to receive approval from the largest and most significant GPO by the end of March with an anticipated go-live date in mid-2025. An extensive training programme for TELA Bio's specialist hernia sales force was completed during the Period, and the initial response from surgeons has been positive. US pre-launch orders in H1 2024 were ahead of expectations and 2025 has started positively, with record monthly end user sales in January and February 2025. It is worth noting that the initial stocking coupled with later than expected GPO approvals in 2024 and 2025 will impact overall reported sales in 2025, albeit we do expect to be reporting continued strong end user growth.

The pancreatic study for our novel, internal, biological sealant, SEAL-G®, continues to progress with interim results expected mid-2025; as does the development of a next generation device that will remove the necessity for a gas supply connection and regulator. We expect to be able to give a meaningful update on these two workstreams at the time of our 2025 interim results. Since our acquisition of Sealantis in 2019, the company has been investing in the development of the SEAL-G® product and the amortised carrying value of the capitalised development costs stands at £6.8 million at 31 December 2024.

Traditional Closure

RESORBA® branded Absorbable and Non-absorbable Suture ranges are used in general surgery and a wide range of surgical specialties including dental and ophthalmic surgery. Revenues (excluding Peters Surgical sutures) grew strongly during the Period, increasing by 10% to £19.9 million and by 15% at constant currency (2023: £18.1 million). The brand continued to generate good growth in its core German market and across multiple other markets as hospital appetite for progressing suture conversions continues to build.

Biosurgical Devices

Biosurgical Devices comprise antibiotic-loaded collagen sponges, collagen membranes and cones, oxidised cellulose, synthetic bone substitutes and bio-absorbable screws. Revenues increased 38% to £22.6 million (2023: £16.4 million) and 42% at constant currency, following the acquisition of Syntacoll which contributed £5.6 million during the Period.

As reported in September 2024, technical and manufacturing issues at the Nuremberg facility had restricted the Group's ability to fulfil all RESORBA® collagen customer orders during the first half. The integration of Syntacoll's facilities and its expertise has addressed these issues and supply of product has improved during the second half. However, this has resulted in end user demand not being fully reflected in reported sales for the Period.

Syntacoll's expertise has enabled the Group to accelerate its regulatory pathway to access the substantial opportunity for its distinctive collagen portfolio in the lucrative US market. The first US collagen approval, for a dental application, is expected in 2026. Multiple avenues are also being explored to obtain US approval of our wider antibiotic loaded collagen portfolio within the next few years.

The Group's innovative next-generation Freeze Dried Bone Substitute (FDBS) presents another considerable opportunity given its ability to significantly improve bone re-growth through its highly differentiated cohesiveness, mouldability and capacity to mix with various biological fluids and compounds. AMS is targeting US 510(k) submission at the end of 2025 with approval expected around of the end of 2026. Launch into Europe is expected to be on a similar timeline.

Other Distributed Products

The Other Distributed category comprises bought-in minimally invasive access ports and laparoscopic instruments predominately sold by AFS. Revenues increased to £6.3 million during the Period (2023: £5.0 million), growth of 26% on a reported basis and 30% at constant currency.

Peters Surgical

The acquisition of Peters Surgical on 1 July 2024 has contributed revenue of £37.2 million to the AMS Group during the Period. As anticipated, the business ended the year strongly, generating sales growth of 8%, for continuing products, in the second half, compared with proforma 2023 results with good year-on-year growth in sutures, glues and with its innovative Vascular Temporary Occlusion (VTO) portfolio.

Integration

The organisational integration of the AMS and Peters Surgical teams has been completed, with the establishment of a single Group-wide team for all key functions including Sales, Marketing and R&D.

The program of delivery for commercial synergies is well underway with some due to start in 2025 and others expected to follow in the next few years depending on contractual restrictions.

In mid-2024, the Group created a dedicated integration team to deliver the other key synergies relating to branding, product portfolio, manufacturing and supply chain of sutures. This team consists of individuals with key capabilities from both AMS and Peters Surgical, is supported by external consultants and will be fully focused on building and delivering critical elements of the integration plan.

To maximise the significant commercial opportunity, it will be necessary to invest in increased manufacturing capacity and to enable the supply of alternative suture winding cards to allow deeper penetration of the substantial US market. Good progress was made in the Period, and the Group remains on track to deliver the majority of the planned operational synergies from early 2027.

Further 510(k) approvals of Peter Surgical suture ranges were granted in 2024, leaving one final suture family awaiting US approval which is expected during 2025, paving the way for the US launch before the end of the year. 

In addition, a development project has been started to combine the IFABOND® portfolio of internal hexyl cyanoacrylate adhesives with AMS's more precise delivery device technology which will allow the improved portfolio to be optimised for use in a range of internal applications.

Woundcare Business Unit

The Woundcare Business Unit is comprised of the Group's multi-product portfolio of advanced woundcare dressings sold under its partners' brands and the ActivHeal® label, plus a portfolio of specialist medical bulk materials including multi-layer woundcare and bio diagnostics products.

Revenues decreased by 11% to £41.8 million (2023: £47.1 million) on a reported and constant currency basis due to ongoing and challenging market conditions and reducing royalties.

Since the announcement in September of AMS's plans to restructure the Woundcare business by focusing on higher margin business and reducing investment in certain areas, excellent progress has been made and these initiatives are on track to positively impact margins from Q2 2025.

Infection and Exudate Management

Infection and Exudate Management revenue decreased by 7% at reported currency and 6% at constant currency to £36.9 million (2023: £39.5 million), as the business implemented its strategy to focus on more profitable product categories.

Other Woundcare

Other Woundcare comprises royalties, fees and woundcare sealants. Revenue reduced by 36% at reported currency and by 35% at constant currency to £4.9 million (2023: £7.6 million) due to the continued reduction in royalty from Organogenesis following US reimbursement reviews announced in 2023.

Regulatory

Despite enforcement dates for the Medical Devices Regulation (MDR) being delayed until 2027-2028, AMS has already substantially completed its established schedule of work to meet the new standards. Consequently, capitalisation of regulatory costs is expected to start to decline in 2025.

Environmental, Social & Governance

The transformational acquisition of Peters Surgical has created the opportunity to leverage the considerable CSR program already established in the Peters Surgical group and to create an optimised combined ESG program for the enlarged group. This alignment will include combining emissions data for the two businesses and rebasing the initial carbon footprint for the enlarged group, progressing its Pathway to Net Zero project, which has a commitment date of 2045.

All sustainability activities are now being optimised and managed by a single team across the enlarged group.

On 18 March it was announced that Grahame Cook, Senior Independent Non-Executive Director, will become Non-Executive Chair on 31 March following Liz Shanahan's decision to step down for personal reasons. In his new role, Grahame will retain his positions on the Audit, Nominations and Remuneration Committees. Grahame was appointed to the Board in February 2021 and has substantial global equity markets experience, having formerly worked as a managing director at UBS and joint Chief Executive of Panmure Gordon.

Stakeholders

On behalf of the Board, I would like to thank the Group's staff, partners and other stakeholders, without whose help and commitment, the achievements of this year, and the years prior, would not have been possible.

Chris Meredith

Chief Executive Officer

Financial Review

Summary

IFRS reporting

To provide the clearest possible insight into our performance, the Group uses alternative performance measures. These measures are not defined in International Financial Reporting Standards (IFRS) and, therefore, are considered to be non-GAAP (Generally Accepted Accounting Principles) measures. Accordingly, the relevant IFRS measures are also presented where appropriate. AMS uses such measures consistently at the half-year and full-year and reconciles them as appropriate. The measures used in this statement include constant currency revenue growth, adjusted operating margin, adjusted profit before tax, adjusted EBITDA and adjusted earnings per share, allowing the impacts of exchange rate volatility, exceptional items, unwind of Inventory fair value accounting, amortisation, and the movement in long-term acquisition liabilities to be separately identified. Net debt/cash are an additional non-GAAP measure used.

Overview

Revenue increased by 43% at constant currency and by 41% at reported currency to £177.5 million (2023: £126.2 million).

Gross margin decreased to 52.2% (2023: 55.6%) whilst adjusted gross margin which excludes the impact of the fair value accounting on the acquisition of Peters Surgical results in a gross margin of 53.1% (2023: 55.6%). Despite the strong performance of US LiquiBand® several factors are contributing to the reduced gross margin including the acquisition of Syntacoll which has had a dilutive impact as it currently achieves a significantly lower gross margin than the Group's average and the reduced Organogenesis royalty. The addition of Peters Surgical has also had a slight dilutive impact as its gross margins are marginally below those of the AMS group.

As part of the IFRS3 acquisition accounting of Peters Surgical, the Inventory valuation has been increased by £1.7 million to its fair value. This increased Inventory valuation has resulted in higher cost of goods sold in the second half of the year and has been treated as an adjusted item.

Administration expenses before exceptional items increased to £69.0 million (2023: £50.7 million) due to the addition of Peters Surgical which added approximately £16 million of additional cost into the second half of the year and includes £3.2 million of Peters Surgical related amortisation of acquired intangible assets. The remaining increase in administration expenses in the year relates to increased sales and marketing activity and expenditure in Research, Development, Regulatory and Clinical as the Group continues to invest in growth opportunities.

Exceptional items of £10.9 million were incurred in the year in relation to the acquisition and integration of Peters Surgical and Syntacoll. Given the significance of these costs in the year, in comparison to costs incurred for acquisitions in previous years, they have been disclosed separately. Syntacoll exceptional costs relate to legal fees, staff termination costs, an initial idle Period following when no manufacturing was undertaken and some integration related costs. Risk management exceptional costs relate to foreign currency risk management costs to protect against adverse movements in the euro rate whilst the Group awaited FDI approval to complete the acquisition of Peters Surgical. Risk and warranty insurance was also obtained.

Acquisition related costs include costs for advisory services, legal, financial, tax, HR and operational due diligence services, as well as legal services relating to the share purchase agreement and related banking facility required as part of the acquisition funding.

Integration-related costs predominately relate to consultancy services to lead the integration project as well as the costs of an internal dedicated integration team and other relevant integration activities.

The Group incurred £12.9 million of gross R&D spend in the Period (2023: £12.6 million), representing 7.3% of sales (2023: 10.0%), maintaining investment in innovation and in meeting the increasing regulatory standards. As shown in the table below, part of this cost is capitalised and amortised over the following 5 to 10 years with the amount capitalised declining in the year as a result of the substantial MDR progress made.

Amortisation of acquired intangible assets increased to £7.8 million (2023: £4.9 million) due to the acquisition of Peters Surgical in July 2024.

Other Income remained consistent at £0.9 million (2023: £0.9 million) and relates to R&D claims in the UK and Ireland.

In the Period, finance income declined to £2.2 million (2023: £3.8 million), as the majority of funds held on deposit were used to fund the acquisition of Peters Surgical. Finance costs increased to £3.6 million (2023: £1.5 million) following the acquisition of Peters Surgical which was funded by an initial £80 million of borrowing. Finance costs are expected to reduce as SONIA rates are widely expected to reduce in the coming year and the Group repays its borrowings.

A net credit of £0.9 million (2023: £0.2 million credit) was recorded in relation to movements in long-term acquisition liabilities, primarily relating to deferred consideration and earnout from the Connexicon acquisition.

Adjusted EBITDA which consists of earnings before finance costs, tax, depreciation and amortisation as well as excluding exceptional items and the unwind of Inventory fair value accounting increased by 35% to £40.2 million (2023: £29.7 million) as a result of the addition of Peters Surgical.

Adjusted profit before tax which excludes amortisation of acquired intangibles, exceptional items, unwind of Inventory fair valuer accounting and movements in long term liabilities recognised on acquisition, increased by 14% to £29.4 million (2023: £25.9 million) whilst the adjusted PBT margin decreased by 400 bps to 16.5% (2023: 20.5%) as a result of the dilutive impact of the Peters Surgical acquisition and associated borrowing.

Reported profit before tax decreased by 54% to £9.8 million (2023: £21.2 million) as a result of £10.9 million of exceptional items, the £1.7 million unwind of Inventory fair value accounting following the acquisition of Peters Surgical in the second half of the year and the addition of £2.9 million of additional amortisation on acquired intangibles as a result of the Peters Surgical acquisition.

The Group's effective corporation tax rate, reflecting the blended tax rates in the countries where we operate and including UK patent box relief, increased to 27.3% (2023: 24.9%) with the main driver behind the increase being acquisition costs, some of which are not tax deductible, and the annualised impact of the UK Corporation tax rate increase to 25%, effective 1 April 2023. These are partly offset by lower profits in Germany as a result of the reduced Organogenesis royalty. The tax rate in Germany is higher than the Group's average tax rate and therefore a lower proportion of profit in Germany reduces the Group's effective tax rate.

Adjusted diluted earnings per share increased by 16% to 10.45p (2023: 9.05p) and diluted earnings per share decreased by 55% to 3.25p (2023: 7.25p), reflecting the Group's reduced earnings.

Reflecting its confidence in the Group's prospects, the Board is proposing an increased final dividend of 1.83p per share (2023 final dividend: 1.66p), to be paid on 20 June 2025 to shareholders on the register at the close of business on 30 May 2025. This follows the interim dividend of 0.77p per share (2023 interim dividend: 0.70p) paid on 25 October 2024 and would, if approved, make a total dividend for the year of 2.60p per share (2023: 2.36p) an increase of 10%.

Note 6: Adjusted for amortisation of acquired intangible assets and excludes exceptional items and the unwind of Inventory fair value accounting.

Table is reconciled to statutory information in note 3 of the financial information.

Surgical

Surgical revenues inclusive of Peters Surgical increased by 72% to £135.8 million (2023: £79.1 million) at reported currency. Adjusted operating margin decreased by 310 bps to 22.2% (2023: 25.3%) due to the dilutive impact of Peters Surgical at an operating margin level. Whilst Peters Surgical contributes significant sales, it only adds £4.5 million of adjusted operating profit. The previously mentioned impact on gross margin of the addition of low margin Syntacoll business is also impacting adjusted operating margin.

Woundcare

Woundcare revenues decreased by 11% to £41.8 million (2023: £47.1 million) at reported currency and constant currency. Adjusted operating margin decreased by 510 bps to 6.2% (2023: 11.3%) due to the factors noted in the Chief Executive's review. We are confident that the actions taken will improve the business unit's operating margin in 2025.

Currency

The Group hedges significant currency transaction exposure by using forward contracts and aims to hedge approximately 80% of its estimated transactional exposure for the next 18 months. In the financial year, approximately one half of sales were invoiced in Euros and approximately one quarter were invoiced in US Dollar.

The Group estimates that a 10% movement in the £:US$ or £:€ exchange rate will impact Sterling revenues by approximately 2.5% and 4.4% respectively and, in the absence of any hedging, this would have an impact on the Group operating margin of 1.7% and 0.7% percentage points respectively.

Cash flow

Net cash inflow from operating activities in the Period was £19.5 million, an increase on the prior year (2023: £12.3 million) as a result of the acquisition of Peters Surgical. Further information on the acquisition impact of Peters Surgical is included in note 8.

Working capital increased during the year. Inventory cover decreased to 6.0 months of supply (2023: 7.1 months) partly due to the addition of Peters Surgical and Syntacoll. Excluding the impact of Peters Surgical and Syntacoll, Inventory levels were in-line with the prior year despite growing sales as the stock builds seen in prior years have been completed. Increasing levels of receivables is linked to the strong performance in the US although a number of large payments were received shortly after year-end inflating the year-end position. As a result, Debtor days has increased to 53 days (2023: 45 days). Creditor days were in line with prior year at 35 days (2023: 35 days). Total payables increased by £14.0 million as a result of the addition of Peters Surgical and Syntacoll.

Net cash used in investing activities in the Period was £67.1 million as a result of the acquisition of Peters Surgical which resulted in investing cash outflows of £53.2 million (net of cash acquired). £5.5 million of cash outflows relating to payment of contingent consideration occurred and principally relates to achievement of milestones at Connexicon following receipt of FDA approval (2023: £7.4 million).

Capital investment in equipment, R&D and regulatory costs declined to £8.7 million (2023: £9.8 million) as a result of the reducing investment in MDR certification.

Cash outflow relating to taxation increased to £5.0 million (2023: £4.4 million) and included £1.1 million of taxation payments for Peters Surgical.

Net cash received from financing activities in the Period was £5.5 million (2023: used £13.6 million) which includes receipt of £79.3 million of borrowings in July 2024 as part of a facilities provided by the Group's banks, NatWest and HSBC. £8.0 million was subsequently repaid before the end of the year resulting in a net inflow on these facilities of £71.3 million. £62.2 million of these borrowings was utilised to repay Peters Surgical loans as part of the cash-free, debt-free basis of the acquisition. Interest payments increased from £0.4 million to £4.0 million as a result of the new borrowing facilities. The Group did not purchase any of its own shares in the year (2023: £6.7 million).

The Group paid its final dividend for the year ended 31 December 2023 of £3.6 million in June 2024 (for the year ending December 2022, £3.3 million in June 2023), and its interim dividend for the six months ended 30 June 2024 of £1.6 million in October 2024 (for the 6 months ended 30 June 2023: £1.5 million in October 2023). No cash outflows relating to share purchases occurred during the year (2023: £6.7 million).

At the end of the Period, as a result of the above movements, the Group had net debt of £55.8 million (31 December 2023: net cash of £60.2 million) a movement of £116.0 million as a result of the Peters Surgical acquisition.

Note 6: Reconciled in note 7 of the financial information.

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

Attributable to equity holders of the Group

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

Notes Forming Part of the Condensed Consolidated Financial Statements

1. Reporting entity

Advanced Medical Solutions Group plc ("the Company") is a public limited company incorporated in England and Wales (registration number 02867684). The Company's registered address is Premier Park, 33 Road One, Winsford Industrial Estate, Cheshire, CW7 3RT.

The Company's ordinary shares are traded on the AIM market of the London Stock Exchange plc. The consolidated financial statements of the Company for the twelve months ended 31 December 2024 comprise the Company and its subsidiaries (together referred to as the "Group").

The Group is a world-leading independent developer and manufacturer of innovative tissue-healing technology, focused on quality outcomes for patients and value for payers. AMS has a wide range of surgical products including tissue adhesives, sutures, haemostats, internal fixation devices and internal sealants, which it markets under its brands LiquiBand®, RESORBA®, LiquiBandFix8®, LIQUIFIX™, Peters Surgical, Ifabond, Vitalitec and Seal-G®. AMS also supplies wound care dressings such as silver alginates, alginates and foams through its ActivHeal® brand as well as under white label. Since 2019, the Group has made seven acquisitions: Sealantis, an Israeli developer of innovative internal sealants, Biomatlante, a French developer and manufacturer of surgical biomaterials, Raleigh, a leading UK coater and converter of woundcare and bio-diagnostics materials, AFS Medical, an Austrian specialist surgical business, Connexicon, an Irish tissue adhesives specialist, Syntacoll, a German specialist in collagen-based absorbable surgical implants and Peters Surgical, a global provider of specialty surgical sutures, mechanical haemostasis and internal cyanoacrylate devices.

2. Basis of preparation

These condensed unaudited consolidated financial statements have been prepared in accordance with the accounting policies set out in the annual report for the year ended 31 December 2023 except for new standards adopted for the year.

In the current year the Group has applied a number of amendments to IFRSs issued by the IASB. Their adoption has not had a material impact on the disclosures or on the amounts reported in the Annual Financial Statements. The following amendments were applied:

- Lease Liability in a Sale and Leaseback - Amendments to IFRS 16 Leases

- Classification of liabilities as Current or Non-Current and Non-current Liabilities with Covenants - Amendments to IAS 1 Presentation of Financial Statements

- Amendments to IAS 7 Statement of Cash Flows and IFRS 7 Financial Instruments: Disclosures - Supplier Finance Arrangements; and

Lack of Exchangeability - Amendments to IAS 21 The Effects of Changes in Foreign Exchange Rates

While the financial information included in this preliminary announcement has been prepared in accordance with the recognition and measurement criteria of international accounting standards and International Financial Reporting Standards (IFRSs) as adopted by the UK, this announcement does not itself contain sufficient information to comply with IFRSs. The Group expects to publish full financial statements that comply with IFRSs in April 2025.

The unaudited financial information set out in the announcement does not constitute the Group's statutory accounts for the years ended 31 December 2024 or 31 December 2023. The financial information for the year ended 31 December 2023 is derived from the statutory accounts for that year, which have been delivered to the Registrar of Companies. The auditor reported on those accounts; their report was unqualified, did not draw attention to any matters by way of emphasis without qualifying their report and did not contain a statement under s498 (2) or (3) Companies Act 2006. The audit of the statutory accounts for the year ended 31 December 2024 is not yet complete. These accounts will be finalised on the basis of the financial information presented by the Directors in this preliminary announcement and will be delivered to the Registrar of Companies following the Group's annual general meeting.

The unaudited financial statements have been prepared on the historical cost basis of accounting except as disclosed in the accounting policies set out in the annual report for the year ended 31 December 2023.

Going concern

With regards to the Group's financial position, it had cash and cash equivalents at the 31 December 2024 of £17.0 million and continues to be profitable with positive operational cash flow.

The 2024 acquisition of Peters Surgical has resulted in the Group obtaining a new debt facility which includes a £60 million term loan facility and £30 million revolving credit facility, together the "New Debt Facility". The balance of the consideration was funded by the Group's existing cash resources. £12 million of the revolving credit facility is drawn at 31 December 2024, with £18 million available if required.

Both the term loan and the revolving credit facility mature in March 2027 and thereafter can be extended by two consecutive twelve months periods with the banks' agreement. Interest on drawn funds is charged at the SONIA interest rate plus a current bank margin of 1.75%. This margin is expected to reduce in 2025 in line with forecasted leverage reductions. 

The Group is required to comply with the following financial covenants a) Interest cover in respect of any relevant period shall not be less than 4.0:1.0 and b) Net leverage in respect of each relevant Period shall not exceed 3.0:1.0.

The EBITDA to finance charge ratio of the Group at 31 December 2024 is 7.8 and is expected to increase as the borrowing facilities are repaid.

The net debt to EBITDA ratio of the Group at 31 December 2024 is 1.2 and is expected to reduce as the borrowing facilities are repaid.

In carrying out their duties in respect of going concern, the Directors have carried out a review of the Group's financial position and cash flow forecasts for a period of 12 months from the date of signing the accounts . These have been based on a comprehensive review of revenue, expenditure and cash flows, taking into account specific business risks and the current economic environment. Sensitivity analysis has been prepared to stress test forecasts and the Directors are confident the business is a going concern given the significant headroom available. The Directors also considered whether any factors exist that might reasonably impact the Group's ability to continue as going concern beyond the period of 12 months from the date of this preliminary announcement, with no factors considered reasonably possible.

The Group operates in markets whose demographics are favourable, underpinned by an increasing need for products to treat chronic and acute wounds. Consequently, market growth is predicted. The Group has a large number of contracts with customers across different geographic regions and also with substantial financial resources, ranging from government agencies through to global healthcare companies. The acquisition of Peters Surgical will further expand AMS's product portfolio, add additional direct sales capability in key territories, improve manufacturing efficiency and further expand the Group's specialist development and commercialisation function.

Having taken the above into consideration, the Directors have reached a conclusion that the Group is well placed to manage its business risks in the current economic environment. Accordingly, they continue to adopt the going concern basis in preparing the financial statements.

New accounting standards not yet applied

Certain new accounting standards, amendments and interpretations have been published that are not mandatory for 31 December 2024 reporting periods and have not been early adopted by the group. These standards are not expected to have a significant impact on the Group's net results.

3. Segment information

As referred to in the Chief Executive's Statement, the Group is organised into two Business Units: Surgical and Woundcare. These Business Units are the basis on which the Group reports its segment information.

Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Unallocated items comprise mainly investments and related revenue, corporate assets, head office expenses and income tax assets. These are the measures reported to the Group's Chief Executive for the purposes of resource allocation and assessment of segment performance.

Business segments

Segment information about these businesses is presented below.

Geographic segments

Segment revenue is based on the geographical location of customers. Segment assets are based on the country by which the legal entity resides.

4. Operating profit

5. Taxation

6. Earnings per share

The calculation of the basic and diluted earnings per share is based on the following data:

* Adjusted basic and adjusted diluted earnings per share have been revised to include tax on adjusted items to ensure comparability with the current Period.

7. Net Debt