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RNS

Interim Results

Released 07:00 12-Sep-2018

RNS Number : 4807A
Advanced Medical Solutions Grp PLC
12 September 2018
 
 

12 September 2018

 

 

Advanced Medical Solutions Group plc

("AMS" or the "Group")

 

Interim Results for the six months ended 30 June 2018

Advanced Medical Solutions Group plc (AIM: AMS), the surgical and advanced woundcare specialist company, today announces its unaudited interim results for the six months ended 30 June 2018.

Financial Highlights:

 

 

H1 2018

H1 2017

Reported growth

Growth at constant currency¹

Group revenue (£ million)

47.6

46.16

3%

6%

Adjusted5 profit before tax (£ million)

13.7

11.5

19%

-

Profit before tax (£ million)

13.6

11.4

19%

-

Adjusted2 diluted earnings per share (pence)

5.01

4.31

16%

-

Diluted earnings per share (pence)

4.99

4.26

17%

-

Net operating cash flow (£ million)

13.7

9.1

51%

-

Net cash (£ million)4

71.1

55.2

29%

-

Interim dividend per share (pence)

  0.42

  0.35

20%

-

 

 

Business Highlights (including post-period end):

 

·      Group revenues up 3% to £47.6 million and by 6% at constant currency

Strong growth in Branded, offset by slow-down in OEM

·      Gross margin improvement of 300 basis points to 63% (2017 H1: 60%)

·      Branded revenues up 10% to £30.1 million (2017 H1: £27.4 million6) and by 12% at constant currency

·      Continued strong performance with LiquiBand® tissue adhesives

US revenues up 16% to £10.5 million (2017 H1: £9.1 million), and by 27% at constant currency

US market share volume increased to 28% (June 2017: 24%)

LiquiBand® Fix8™ revenues up 16% at reported and constant currency to £1.0 million (2017 H1: £0.8 million) following the successful completion of recent design modifications

·      RESORBA® branded products, up 9% to £11.1 million (2017 H1: £10.2 million) and by 6% at constant currency

·      OEM revenues down 6% to £17.6 million (2017 H1: £18.7 million6) and by 4% at constant currency

Impacted by weakness in the woundcare market and by the decision of one partner to exit the market altogether

Approval to market Surgical Silver Post-Operative dressings and PHMB Foam dressings in US received in August 2018 and launches planned for the fourth quarter

 

Commenting on the interim results, Chris Meredith, CEO of AMS, said:

 

"The Group has delivered another good set of results and is trading in line with Board expectations for the full year.

 

"We remain optimistic about the Group's organic growth prospects, with our R&D pipeline continuing to deliver products that strengthen our innovative portfolio. In addition, we are actively monitoring and evaluating acquisition opportunities to capitalise on our strong financial and strategic position."

 

- End -

 

Notes

1     Constant currency adjusts for the effect of currency movements by re-translating the current period's performance at the         previous period's exchange rates

2     All items are shown before amortisation of acquired intangible assets which, in 2018 H1, were less than £0.1 million (2017 H1: £0.1 million) as defined in the financial review

3     Operating cash flow is arrived at by taking the operating profit for the period and adjusting it for depreciation, amortisation, working capital movements and other non-cash items (see table 3)

4     Net cash is defined as cash and cash equivalents plus short term investments less financial liabilities and bank loans

5    Adjusted profit before tax is adjusted for exceptional items and amortisation of acquired intangible assets

6    2017 H1 Revenue increased by £0.2 million (Branded £0.1 million, OEM £0.1 million) as a result of adoption of IFRS 15 (Revenue from Contracts with Customers) in 2017, with these amounts being reclassified from Other Income to Revenue

 

 

 

For further information, please contact:

 

Advanced Medical Solutions Group plc

Tel: +44 (0) 1606 545508

Chris Meredith, Chief Executive Officer

Mary Tavener, Chief Financial Officer

 

 

 

Consilium Strategic Communications

Tel: +44 (0) 20 3709 5700

Mary-Jane Elliott / Matthew Neal / Nicholas Brown / Olivia Manser

 

 

Investec Bank plc (NOMAD) & Broker

Tel: +44 (0) 20 7597 5970

Daniel Adams / Gary Clarence / Patrick Robb

 

 

 

About Advanced Medical Solutions Group plc

 

AMS is a world-leading independent developer and manufacturer of innovative and technologically advanced products for the global surgical and wound care markets, focused on quality outcomes for patients and value for payers. AMS has a wide range of products that include tissue adhesives, sutures, haemostats, internal fixation devices, silver alginates, alginates and foams, which it markets under its brands LiquiBand®, RESORBA®, LiquiBand® Fix8™ and ActivHeal® as well as supplying under white label.

 

AMS's products, manufactured out of two sites in the UK, one in the Netherlands, two in Germany and one in the Czech Republic, are sold in 77 countries via a network of multinational or regional partners and distributors, as well as via AMS's own direct sales forces in the UK, Germany, the Czech Republic and Russia. Established in 1991, the Group has approximately 650 employees. For more information please see www.admedsol.com.

 

Chairman's Statement

 

AMS continues to perform well and is well positioned to deliver another year of good growth and strong financial performance.

 

The Group's strategic initiatives continue to be to deliver growth by:

·      Innovation

·      Geographic expansion

·      Licencing and acquisition

 

Revenue increased by 3% to £47.6 million (2017 H1: £46.1 million6) and by 6% at constant currency. Adjusted profit before tax5 increased by 19% to £13.7 million (2017 H1: £11.5 million). Our net cash position4 at 30 June 2018 was £71.1 million (31 December 2017: £62.5 million).

 

Good progress has been made with our surgical brands. LiquiBand® continues to gain market share in the US, now at 28%, gaining 4% since June 2017. Our RESORBA® brands grew steadily across all territories and LiquiBand® Fix8™ demonstrated strong growth following the completion of recent design modifications.

 

Our financial progress in OEM has been impacted by both a general slow-down in the woundcare market and by one of our US partners deciding to exit the market. Whilst this temporary setback is disappointing, we have multiple opportunities underway to drive future growth through market expansion and from the launch of new products later this year. These new products demonstrate the inherent value of our R&D and Regulatory capabilities which are a key pillar of our strategy to drive organic growth, supporting our OEM customers and end users.

 

Dividend

 

The Board intends to pay an interim dividend of 0.42p per share (2017 H1: 0.35p), an increase of 20%, on 26 October 2018 to shareholders on the register at the close of business on 29 September 2018.

 

Team

As announced at our AGM in June 2018, Mary Tavener intends to retire from the role of Chief Financial Officer and Board Director on 31 December 2018 after 19 years with the Company, and that Eddie Johnson, who has been with AMS for more than six years, and is currently the Group Financial Controller, will assume the role of Chief Financial Officer and join the Board. We would like to thank Mary for her 19 years of dedicated and outstanding service to AMS. In her time with the Group, she has been integral to our listing on AIM, several acquisitions and this has culminated in AMS growing for 13 consecutive years. 

 

We are also pleased to announce that Alan Richardson will be joining the Group as Chief Operations Officer on 5 November 2018 from ConvaTec. He will assume responsibility for our Group Operations, Quality and Regulatory functions and brings with him a wealth of experience.

Mary will be working with both Eddie and Alan to ensure a smooth transition before her departure.

 

On behalf of the Board, I would like to thank all employees for their continued hard work that has helped AMS to prosper as a global medical technology business, as well as our customers, suppliers, business partners and shareholders for their continued support.

 

Summary

 

The Group continues to deliver good results and is trading in line with Board expectations for the year ending 31 December 2018.

 

 

Peter Allen

Chairman

 

 

 

 

 

Chief Executive's Review

 

I am pleased to report that the Group again performed well in the period.

 

Business Review

 

Branded Business Unit

 

Branded revenue increased by 10% to £30.1 million (2017 H1: £27.4 million6) and by 12% at constant currency.

 

LiquiBand®

 

LiquiBand®, our range of cyanoacrylate based medical adhesives, is our largest brand with sales of £14.6 million (2017 H1: £13.0 million), an increase of 12% on prior year and a 19% increase at constant currency. It is sold in over 60 countries and includes different formulations and designs used to close wounds topically in the Operating Room and Accident and Emergency setting.

 

The US is our largest market and the Group continues to gain market share from the market leader. Our strategy in this market is to work with distributors that are able to target both hospitals and non-hospitals, helping to identify customers and convert opportunities into sales. Sales increased by 16% to £10.5 million (2017 H1: £9.1 million) and by 27% at constant currency with our portfolio of cyanoacrylate formulations successfully addressing the needs of the market. Our overall US market share by volume now stands at 28%, an increase of 4% since June 2017.

 

Sales of LiquiBand® in the UK and Germany reduced by 4% to £2.7 million (2017 H1: £2.8 million) and by 6% at constant currency. Sales through our distributors in other territories, increased by 20% to £1.4 million (2017 H1: £1.2 million) and 21% at constant currency.

 

In R&D, we are developing a device for closing large wounds for which we expect to receive approval to market in the US later this year. We also continue to work on extending our ranges of formulations for the base monomers used in our adhesives, with products expected to launch next year.

 

LiquiBand® Fix8™

 

The design modifications for LiquiBand® Fix8™, our hernia mesh fixation device were completed in the first quarter of 2018, and the new version is now being fully promoted. Surgeon feedback has been extremely positive, and we recorded our highest level of quarterly sales for this product in Q2 2018 resulting in H1 2018 sales increasing by 16% at reported and constant currency to £1.0 million (2017 H1 £0.8 million). Clinical work is ongoing to broaden the claims to include other laparoscopic surgical applications, such as gastric sleeve surgery.  

 

At present, the laparoscopic device is approved for use in Europe and those markets that accept European approval standards. We have begun the US approval process which is expected to take another two years and to cost approximately £3 million as it will necessitate a full set of clinical trials. These are expected to start early next year, once we obtain the Investigational Device Exemption with the FDA.  

 

Development of the open surgery hernia mesh fixation device is close to completion and EU approval for this product is expected this year.

 

We continue to be excited for the long term prospects for LiquiBand® Fix8™.

 

RESORBA®

 

Our RESORBA® branded products portfolio is comprised of a comprehensive range of sutures and a range of bio-surgical products that include collagens and oxidised cellulose. Sales of RESORBA® products increased by 9% to £11.1 million (2017 H1: £10.2 million), and by 6% at constant currency.

 

Within this, sales of sutures increased by 7% to £6.8 million (2017 H1: £6.4 million) and by 4% at constant currency and sales of bio-surgical products increased by 18% to £4.3 million (2017 H1: £3.7 million) and by 14% at constant currency.

 

Of the £11.1 million sales, £6.6 million (2017 H1: £6.5 million) were in Germany, up 2% on the prior year but down 1% at constant currency, while sales outside Germany increased by 20% to £4.5 million (2017 H1: £3.8 million) and 17% at constant currency. We continue to access new markets, in particular Asia Pacific, and target specific applications for our RESORBA® brands.

 

In R&D, we are continuing to work on the development and approval of ranges of collagens incorporating a variety of different antibiotics, including an application in cardiac surgery.

   

ActivHeal®

 

ActivHeal® is our range of high-quality and cost-effective woundcare dressings sold predominately to the NHS.

 

Sales of ActivHeal® increased by 6% to £3.4 million (2017 H1: £3.2 million) in the period. The raw material issue, previously reported, was resolved at the end of last year and our new antimicrobial, atraumatic foam and high-performance products have been added to the range.

 

 

OEM Business unit

Our sales in the period were impacted by weakness in the woundcare market, which we reported in 2017, ordering patterns of our partners, and the decision of Hollister, one of our US partners, to exit the market. As a result, revenue decreased 6% to £17.6 million (2017 H1: £18.7 million6) and by 4% at constant currency. 

·      Sales of antimicrobial dressings decreased by 15% to £8.2 million (2017 H1: £9.7 million) and by 13% at constant currency

·      Sales of non-antimicrobial foam dressings increased by 6% at reported currency to £3.6 million (2017 H1: £3.4 million) and by 5% at constant currency

·      Sales of other technologies, including alginates, gels and royalties, increased by 3% to £5.8 million (2017 H1: £5.6 million) and by 7% at constant currency. This included £0.7 million relating to royalty income from Organogenesis, on sales of PHMB collagen (2017 H1: £nil)

We have multiple opportunities underway to drive future growth through market expansion and from extending our anti-microbial product ranges.

In June 2018, we received European approval for our atraumatic Lite foam which is an extension to our silicone foam portfolio. It is intended for managing wounds with low levels of exudate such as minor burns, leg and foot ulcers and post-operative surgical wounds towards the end of the healing process. The dressing has a soft silicone 'atraumatic' adhesive which can be repositioned during wear. With the Non-Border variant having been CE-Marked in November 2017, and the addition of some new post-operative sizes enabling us to compete in the surgical market we now have the full complement of variants for this product range.

 

In August 2018, we received pre-market approval from the FDA in the US to market our Surgical Silver Post-Operative dressings and PHMB foam dressings. It is expected that both ranges will be launched into the US around the end of 2018.

The Surgical Silver Post-Operative dressing consists of two skin-friendly layers of hydrocolloid securing a silver-containing absorbent antibacterial alginate dressing and has been shown to be effective against Methicillin-Resistant S. aureus (MRSA) as well as a broad spectrum of microbes including other antibiotic resistant strains.

Our PHMB Foam Dressing is a polyurethane foam impregnated with polyhexamethylene biguanide that can be used in managing various chronic and post-surgical wounds including, diabetic ulcers and burns and has strong antimicrobial and fluid handling performance. This range was launched in Europe in 2016 following EU approval, whilst launches to our US partners were deferred pending approval for the extended claims.

 

 

We have recently received approval from ANVISA, the Regulatory Body in Brazil, to market a range of advanced woundcare products into Brazil and have identified a partner to work with, that expects to launch at the end of this year. This will be our first OEM partner in Latin America. We have also added a new partner for the US that has agreed a four-year contract for a range of advanced woundcare products and also expects to launch in the fourth quarter. 

In R&D we continue to extend our product portfolio with atraumatic PHMB foam and silver high performance dressings anticipated to launch in the next two years.

 

Operations and regulatory

 

To meet market demand and continue our sustained organic growth, we continue to make investments in our facilities and equipment. In the first six months of the year, we have invested in improved packaging capability at Nuremberg and in initial planning work related to extending the capacity of the Plymouth site.

 

The new European Medical Devices Regulation (MDR) entered into force on 25 May 2017, marking the start of the transition period for manufacturers selling medical devices into Europe. The MDR, which replaces the Medical Devices Directive (MDD) has a transition period of three years and manufacturers have this transition period to update their technical documentation and processes to meet the new requirements. The MDR brings more scrutiny on product safety and performance and stricter requirements on clinical evaluation and post-market clinical follow up.

 

There will be fewer Notified Bodies approved to certify medical devices under MDR and they are indicating resource constraints within their organisations as they strive to meet the new regulatory requirements. The backlog is being further compounded as medical device companies losing their Notified Body have to transfer to one of those remaining. For all Medical Device companies, there will be significant, additional work and costs associated with meeting the new requirements. Short term there may be delays in getting products approved and recertified. In the longer term, once the transition is completed, the tighter regulatory standards should prove beneficial for the Group and will provide a significant barrier to market entry. The five year product recertification process for RESORBA® is currently in progress and is consequently proving to be onerous.

 

In the UK the Group's Notified Body is BSI. Following the triggering of Article 50, BSI expects to remain a full member and influential participant in the single European Standards system as well as an EU Notified Body.

 

If no withdrawal agreement is achieved with Europe, BSI anticipates that a mutual recognition agreement for UK Notified Bodies will be agreed. Currently there are recognised existing mechanisms in place for non-EU countries to participate as EU Notified Bodies. For example, the designated organisations in Norway (under EEA recognition), Switzerland and Australia (through Mutual Recognition Agreements) are recognised as Notified Bodies for the purposes of the relevant EU legislation.

 

We further understand that BSI is strengthening its European links to secure BSI's EU Notified Body activity in mainland Europe. BSI has formally applied for designation as a Medical Device Notified Body in the Netherlands and is working through the process of designation. In a worst case scenario, companies would be able to transfer to BSI Netherlands from BSI UK.

 

Referendum vote to leave the EU

 

The Group is well placed to deal with the uncertain outcome of the Brexit negotiations. The Group already has a strong footprint in mainland Europe and in March 2018, the UK trading entity was granted Authorised Economic Operator (AEO) status by HMRC. In the event, of "no deal", the World Trade Organisation (WTO) tariff rates for our finished goods are currently favourable and on the back of our AEO status, we are in a good position to secure reliefs against import duties on our raw material imports.

 

 

 

 

Acquisitions strategy

 

We have an internal team actively working with advisors to identify, appraise and progress targets that meet our strategy of:

 

·      licensing or acquiring technology that allows us to leverage our global routes to market

·      licensing or acquiring complementary surgical or woundcare brands

·      geographic expansion through acquiring surgically focused companies with strong direct sales capability and ownership of complementary products

 

The Group is actively monitoring and evaluating acquisition opportunities to capitalise on its strong financial and strategic position.

 

 

Summary and outlook

 

The first half of 2018 has seen another good performance by the Group and we are confident of meeting Board expectations for the full year. With our new product launches, strong partners and the opportunities we see from our R&D pipeline, the Board remains optimistic about our long-term prospects and the potential for further organic growth, as well as by means of acquisitions.

 

 

 

 

 

 

Financial Review

 

Overview

 

Revenue increased by 3.2% to £47.6 million (2017 H1: £46.1 million6). At constant currency, revenue growth would have been 5.6%.

 

Amortisation of acquired intangible assets was less than £0.1 million in the six month period (2017 H1: £0.1 million).

 

Comparisons with 2017 are made on a pre-exceptional and pre-amortisation of acquired intangible asset cost basis, as we believe that this provides a more relevant representation of the Group's trading performance. To aid comparison, the Group's adjusted income statement is summarised in Table 1 below.

 

Table 1

Six months ended

30 June 2018

Six months ended

30 June 2017

 

Adjusted Income Statement

£'000

£'000 (restated6)

Change

Revenue6

47,621

46,126

3.2%

Gross profit

29,995

27,694

8.3%

Distribution costs

(614)

(534)

15.0%

Adjusted administrative expenses7

(15,864)

(15,711)

1.0%

Other income

59

57

3.5%

Adjusted operating profit

13,576

11,506

18.0%

Net finance income

98

-

 

Adjusted profit before tax5

13,674

11,506

18.8%

Amortisation of acquired intangibles

(40)

(94)

 

Profit before tax

13,634

11,412

19.5%

Tax

(2,866)

(2,301)

24.6%

Profit for the period

10,768

9,111

18.2%

Adjusted earnings per share - basic8

5.08p

4.37p

16.2%

Earnings per share - basic8

5.06p

4.32p

17.1%

Adjusted earnings per share - diluted8

5.01p

4.31p

16.2%

Earnings per share - diluted8

4.99p

4.26p

17.1%

         

7    Administration expenses exclude amortisation of acquired intangible assets

8    see Note 4 Earnings per share for details of calculation

 

The gross margin percentage for the Group was 63.0% (2017 H1: 60.0%). This 300 bps increase in gross margin was mainly as a result of sales mix and the out-licensing agreement with Organogenesis for wound dressings containing collagen and PHMB, which generated £0.7 million royalty income in the period.

 

Adjusted operating profit increased by 18.0% to £13.6 million (2017 H1: £11.5 million) and the adjusted operating margin increased by 360 bps to 28.5% (2017 H1: 24.9%) due to sales mix and the impact of additional royalty income in the period. Administration expenses (excluding amortisation of acquired intangible assets) increased by 1%. Within this, gains from the foreign exchange effects helped to offset a further increase in investment in sales and marketing and increased costs from regulatory and clinical work.

 

Adjusted diluted earnings per share increased by 16.2% to 5.01p (2017 H1: 4.31p) and diluted earnings per share increased by 17.1% to 4.99p (2017 H1: 4.26p).

 

The Group generated profit before tax of £13.6 million (2017 H1: £11.4 million) and had net cash of £71.1 million at the half year end (2017 H1: £55.2 million).

 

The Group has a strong balance sheet enabling financing of further organic growth and acquisitions.

 

Income Statement

 

The operational performance of the business units is shown in Table 2 below. The adjusted profit from operations and the adjusted operating margin are shown after excluding exceptional items and amortisation of acquired intangibles.

 

Table 2

 

Operating result by business segment

 

Six months ended 30 June 2018

 

Branded

 

OEM

 

 

£'000

£'000

Revenue

 

30,060

17,561

Profit from operations

 

9,903

3,914

Amortisation of acquired intangibles

 

40

-

Adjusted profit from operations9

 

9,943

3,914

Adjusted operating margin9

 

33.1%

22.3%

Six months ended 30 June 2017 represented

 

 

 

Revenue6 (restated)

 

27,440

18,686

Profit from operations

 

7,936

3,724

Amortisation of acquired intangibles

 

89

5

Adjusted profit from operations9

 

8,025

3,729

Adjusted operating margin9

 

29.2%

20.0%

         

 

9    Excludes amortisation of acquired intangible assets which, in 2018 H1, were less than £0.1 million (2017 H1: £0.1 million)

Expenses relating to exceptional items, to non-executive Directors and plc costs are not allocated to business units and are included within unallocated expenses.

 

 

Branded

Branded revenues increased by 9.5% to £30.1 million (2017 H1: £27.4 million6) and by 11.9% at constant currency, with sales of LiquiBand® into the US being the main driver of growth.

 

Adjusted operating margin increased by 390 bps to 33.1% (2017 H1: 29.2%) despite ongoing investment in our sales & marketing teams. R&D expense was 2.5% of revenues (2017 H1: 2.1%) with expenditure in this segment being incurred on projects to improve our formulation and applicators for tissue adhesives, as well as ongoing development of the internal use of tissue adhesives.

 

OEM

OEM revenues decreased by 6.0% to £17.6 million (2017 H1: £18.7 million6) at reported currency and by 3.7% at constant currency. R&D expense was 5.2% of revenues (2017 H1: 4.1%) with spend being incurred in the development of post-surgical dressings and high performance dressings.

 

Adjusted operating margin increased by 230 bps to 22.3% (2017 H1: 20.0%).

 

Geographic breakdown of revenues

The geographic breakdown of Group revenues in 2018 is set out in note 5. Sterling sales represent the largest currency with significant sales also in Euros and US dollars. The Group's policy is to put in place natural hedges where possible and to hedge transactional risk. The Group estimates that a 10% movement in the £:US$ or £:Euro exchange rate would impact Sterling revenues by approximately 5% and 3% respectively and, in the absence of any hedging, this would result in an impact on profit of 3.6% and 0.8% respectively.

 

Net finance costs/income

Net finance costs/income is comprised of finance income of £157,000 (2017 H1: £50,000) representing interest received on cash balances and finance costs of £59,000 (2017 H1: £51,000) resulting from facility costs.

 

 

Profit before tax

Profit before tax for the six months was 19.5% higher at £13.6 million (2017 H1: £11.4 million).

 

Taxation

The Group's effective rate of current tax for the six months was 21.0% (2017 H1: 20.2%). This reflects the blend of profits and tax rates in the countries in which the Group operates and incorporates UK patent box and R&D relief. The Group expects its anticipated effective tax rate to be approaching 21% for the full year ending 31 December 2018.

 

Profit after tax and earnings per share

Adjusted profit after tax increased by 17.4% to £10.8 million (2017 H1: £9.2 million), resulting in a 16.2% increase in adjusted basic earnings per share to 5.08p (2017 H1: 4.37p) and a 16.2% increase in adjusted diluted earnings per share to 5.01p (2017 H1: 4.31p).

 

Profit after tax increased 18.2% to £10.8 million (2017 H1: £9.1 million), resulting in a 17.1% increase in basic earnings per share to 5.06p (2017 H1: 4.32p) and a 17.1% increase in diluted earnings per share to 4.99p (2017 H1: 4.26p).

 

Dividend per share

The Board intends to pay an interim dividend of 0.42p per share on 26 October 2018 to shareholders on the register on 28 September 2018. This is an increase of 20% compared with the first half of 2017.

 

 

 

 Cash Flow and Balance Sheet

 

  Table 3 summarises the Group cash flows.

 

 

Table 3

Six months ended

30 June 2018

Six months ended

30 June 2017

  Cash Flow

£'000

   £'000

 

Adjusted operating profit (Table 1)

13,576

11,506

 

 

Non-cash items

2,359

1,970

 

 

Adjusted EBITDA10

15,935

13,476

 

 

Working capital movement

(2,212)

(4,416)

 

 

Operating cash flow

13,723

9,060

 

 

Capital expenditure and capitalised R&D

(2,302)

(2,236)

 

 

Net interest income

98

-

 

 

Tax

(1,650)

(2,048)

 

 

Free cash flow

9,869

4,776

 

 

Dividends paid

(1,591)

(1,307)

 

 

Proceeds from share issues

381

555

 

 

Exchange gains

16

11

 

 

Net increase in cash and cash equivalents

8,675

4,035

 

                 

10  Adjusted EBITDA is earnings before interest, tax, depreciation, intangible asset amortisation, share based payments and exceptional items

 

The Group had an operating cash flow before exceptional items of £13.7 million (2017 H1: £9.1 million) and a conversion of adjusted operating profit into free cash flow of 73% (2017 H1: 42%). The increase in cash conversion was due to reduced trade debtors and decreased tax payments, resulting from the recovery of overpayments of tax from previous periods.

 

Working capital increased by £2.2 million. Within this, trade receivables decreased by £1.7 million due to timing of sales with debtor days at 43 (2017 H1: 53 days). Inventory increased by £2.2 million in the first six months with months of supply being 4.1 (2017 H1: 4.1 months). Trade payables decreased £1.7 million.

 

We have invested £2.3 million in fixed assets, software and capitalised R&D in the first six months (2017 H1: £2.2 million), including investment in our Nuremberg facility, investigation into potential expansion of our Plymouth facility, new packing machines and microwave dryer machines to enhance our foam manufacturing capabilities. £0.5 million of R&D spend was capitalised in the period (2017 H1: £0.4 million).

 

Net taxation of £1.7 million was paid which is in line with the Group's profitability within the tax jurisdictions in which it operates. 

 

The Group paid its final dividend for the year ended 31 December 2017 of £1.6 million on 15 June 2018 (2017 H1: £1.3 million).

 

The Group had a free cash flow as defined in Table 3 of £9.9 million in the period (2017 H1: £4.8 million), with a net increase in cash and cash equivalents of £8.7 million (2017 H1: £4.0 million increase).

 

At the end of the period, the Group had net cash11 of £71.1 million (2017 H1: net cash11 of £55.2 million).

 

The Group has a five-year, £30 million, multi-currency, revolving credit facility, obtained in December 2014, with an accordion option under which AMS can request up to an additional £20 million on the same terms. The facility is provided jointly by HSBC and The Royal Bank of Scotland PLC. It is unsecured on the assets of the Group and is currently wholly undrawn. 

 

The movement in net cash during the first half of 2018 is reconciled in Table 4 below:

 

 

Table 4

 

Movement in net cash11

       £'000

Net cash as at 1 January 2018

62,454

Exchange rate impacts

16

Free cash flow

9,869

Dividends paid

(1,591)

Proceeds from share issues

381

Net cash as at 30 June 2018

71,129

     

11  Net cash is defined as cash and cash equivalents plus short term investments less financial liabilities and bank loans

 

The Group's going concern position is fully described in note 11 and the Group had no borrowings in the period.

 

 

CONDENSED CONSOLIDATED INCOME STATEMENT for the six months ended 30 June 2018

 

 

 

(Unaudited)

(Unaudited)

(Audited)

 

 

Six months ended 30 June 2018

Six months ended 30 June 2017

Year ended 31 December 2017

 

 

 

Total

 

 

Total (restated)

 

 

Total

 

 

Note

 

£'000

 

 

£'000

 

 

£'000

 

Revenue from continuing operations6

5

 

47,621

 

 

46,126

 

 

96,908

 

Cost of sales

 

 

(17,626)

 

 

(18,432)

 

 

(38,504)

 

Gross profit

 

 

29,995

 

 

27,694

 

 

58,404

 

Distribution costs

 

 

(614)

 

 

(534)

 

 

(1,130)

 

Administration costs

 

 

(15,904)

 

 

(15,804)

 

 

(32,184)

 

Other income

 

 

59

 

 

57

 

 

150

 

Profit from operations

 

 

13,536

 

 

11,413

 

 

25,240

 

Finance income

 

 

157

 

 

50

 

 

147

 

Finance costs

 

 

(59)

 

 

(51)

 

 

(110)

 

Profit before taxation

 

 

13,634

 

 

11,412

 

 

25,277

 

Income tax

7

 

(2,866)

 

 

(2,301)

 

 

(5,143)

 

Profit for the period attributable to equity holders of the parent

 

 

10,768

 

 

9,111

 

 

20,134

 

Earnings per share

 

 

 

 

 

 

 

 

 

 

Basic

4

 

5.06p

 

 

4.32p

 

 

9.52p

 

Diluted

4

 

4.99p

 

 

4.26p

 

 

9.39p

 

Adjusted12 diluted

4

 

5.01p

 

 

4.31p

 

 

9.46p

 

 

 

 

 

 

 

 

 

 

 

 

 

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

 

 

(Unaudited)

(Unaudited)

(Audited)

 

Six months ended 30 June 2018

Six months ended 30 June 2017

Year ended 31 December 2017

 

 

£'000

 

 

£'000

 

 

£'000

 

Profit for the period

 

10,768

 

 

9,111

 

 

20,134

 

Items that will potentially be reclassified subsequently to  profit and loss

 

 

 

 

 

 

 

 

 

Exchange differences on translation of foreign operations

 

(4)

 

 

1,548

 

 

2,187

 

(Loss)/gain arising on cash flow hedges

 

(1,613)

 

 

2,556

 

 

4,192

 

Other comprehensive (expense)/income for the period

 

(1,617)

 

 

4,104

 

 

6,379

 

Total comprehensive income for the period attributable to equity holders of the parent

 

9,151

 

 

13,215

 

 

26,513

 

            12 Adjusted for exceptional items and for amortisation of acquired intangible assets
 

 

 

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

 

 

(Unaudited)

(Unaudited)

(Audited)

 

30 June 2018

30 June 2017

31 December 2017

 

£'000

£'000

£'000

Assets

 

 

 

Non-current assets

 

 

 

Acquired intellectual property rights

9,622

9,629

9,675

Software intangibles

2,876

2,730

3,078

Development costs

2,506

1,747

2,135

Goodwill

41,746

41,430

41,801

Property, plant and equipment

17,683

16,951

17,019

Deferred tax assets

199

-

199

Trade and other receivables

19

13

286

 

74,651

72,500

74,193

Current assets

 

 

 

Inventories

13,232

11,182

11,073

Trade and other receivables

18,830

16,712

20,950

Current tax assets

-

461

48

Cash and cash equivalents

71,129

55,160

62,454

 

103,191

83,515

94,525

Total assets

177,842

156,015

168,718

Liabilities

 

 

 

Current liabilities

 

 

 

Trade and other payables

8,856

11,461

10,547

Current tax liabilities

3,310

2,356

2,290

Other taxes payable

-

103

15

 

12,166

13,920

12,852

Non-current liabilities

 

 

 

Trade and other payables

1,262

341

310

Deferred tax liabilities

3,126

2,748

3,120

 

4,388

3,089

3,430

Total liabilities

16,554

17,009

16,282

Net assets

161,288

139,006

152,436

Equity

 

 

 

Share capital

10,672

10,606

10,632

Share premium

35,148

34,478

34,778

Share-based payments reserve

5,562

4,082

4,676

Investment in own shares

(156)

(152)

(152)

Share-based payments deferred tax reserve

815

861

815

Other reserve

1,531

1,531

1,531

Hedging reserve

(955)

(978)

658

Translation reserve

2,819

2,184

2,823

Retained earnings

105,852

86,394

96,675

Equity attributable to equity holders of the parent

161,288

139,006

152,436

 

 

 

CONDENSED CONSOLIDATED Statement of Changes in Equity

Attributable to equity holders of the Group

 

 

 

 

Share-

Investment

Share-based

 

 

 

 

 

 

Share

Share

based

in own

payments

Other

Hedging

Translation

Retained

 

 

capital

premium

payments

shares

deferred tax

reserve

reserve

reserve

earnings

Total

 

£'000

£'000

£'000

£'000

£'000

£'000

£'000

£'000

£'000

£'000

At 1 January 2018 (audited)

10,632

34,778

4,676

(152)

815

1,531

658

2,823

96,675

152,436

Consolidated profit for the period to 30 June 2018

-

-

-

-

-

-

-

-

10,768

10,768

Other comprehensive income

-

-

-

-

-

-

(1,613)

(4)

-

(1,617)

Total comprehensive income

-

-

-

-

-

-

(1,613)

(4)

10,768

9,151

Share-based payments

-

-

907

-

-

-

-

-

-

907

Share options exercised

40

370

(21)

-

-

-

-

-

-

389

Shares purchased by EBT

-

-

-

(600)

-

-

-

-

-

(600)

Shares sold by EBT

-

-

-

596

-

-

-

-

-

596

Dividends paid

-

-

-

-

-

-

-

-

(1,591)

(1,591)

At 30 June 2018 (unaudited)

10,672

35,148

5,562

(156)

815

1,531

(955)

2,819

105,852

161,288

 

 

 

Share-

Investment

Share-based

 

 

 

 

 

 

Share

Share

based

in own

payments

Other

Hedging

Translation

Retained

 

 

capital

premium

payments

shares

deferred tax

reserve

reserve

reserve

earnings

Total

 

£'000

£'000

£'000

£'000

£'000

£'000

£'000

£'000

£'000

£'000

At 1 January 2017 (audited)

10,524

34,005

3,469

(152)

459

1,531

(3,534)

636

78,590

125,528

Consolidated profit for the period to 30 June 2017

-

-

-

-

-

-

-

-

9,111

9,111

Other comprehensive income

-

-

-

-

-

-

2,556

1,548

-

4,104

Total comprehensive income

-

-

-

-

-

-

2,556

1,548

9,111

13,215

Share-based payments

-

-

613

-

402

-

-

-

-

1,015

Share options exercised

82

473

-

-

-

-

-

-

-

555

Shares purchased by EBT

-

-

-

(484)

-

-

-

-

-

(484)

Shares sold by EBT

-

-

-

484

-

-

-

-

-

484

Dividends paid

-

-

-

-

-

-

-

-

(1,307)

(1,307)

At 30 June 2017 (unaudited)

10,606

34,478

4,082

(152)

861

1,531

(978)

2,184

86,394

139,006

 

 

 

 

 

 

Share-

Investment

Share-based

 

 

 

 

 

 

Share

Share

based

in own

payments

Other

Hedging

Translation

Retained

 

 

capital

premium

payments

shares

deferred tax

reserve

reserve

reserve

earnings

Total

 

£'000

£'000

£'000

£'000

£'000

£'000

£'000

£'000

£'000

£'000

At 1 January 2017 (audited)

10,524

34,005

3,469

(152)

459

1,531

(3,534)

636

78,590

125,528

Consolidated profit for the year to 31 December 2017

-

-

-

-

-

-

-

-

20,134

20,134

Other comprehensive income

-

-

-

-

-

-

4,192

2,187

-

6,379

Total comprehensive income

-

-

-

-

-

-

4,192

2,187

20,134

26,513

Share-based payments

-

-

1,279

-

356

-

-

-

-

1,635

Share options exercised

108

773

(72)

-

-

-

-

-

-

809

Shares purchased by EBT

-

-

-

(484)

-

-

-

-

-

(484)

Shares sold by EBT

-

-

-

484

-

-

-

-

-

484

Dividends paid

-

-

-

-

-

-

-

-

(2,049)

(2,049)

At 31 December 2017 (audited)

10,632

34,778

4,676

(152)

815

1,531

658

2,823

96,675

152,436

 

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

 

 

(Unaudited)

(Unaudited)

(Audited)

 

Six months

Six months

 

 

ended

ended

Year ended

 

30 June 2018

30 June 2017

31 December 2017

 

£'000

£'000

£'000

Cash flows from operating activities

 

 

 

Profit from operations

13,536

11,412

25,240

Adjustments for:

 

 

 

Depreciation

1,080

1,012

2,053

Amortisation   - intellectual property rights

40

94

134

                       - development costs

128

208

380

                       - software intangibles

244

137

415

(Increase)/decrease in inventories

(2,174)

362

505

Decrease/(increase) in trade and other receivables

1,714

(4,205)

(8,627)

(Decrease)/increase in trade and other payables

(1,752)

(573)

73

Share-based payments expense

907

613

1,279

Taxation

(1,650)

(2,048)

(4,486)

Net cash inflow from operating activities

12,073

7,012

16,966

Cash flows from investing activities

 

 

 

Purchase of software

(58)

(622)

(958)

Capitalised research and development

(498)

(371)

(860)

Purchases of property, plant and equipment

(1,752)

(1,278)

(2,901)

Disposal of property, plant and equipment

6

35

264

Interest received

157

50

147

Net cash used in investing activities

(2,145)

(2,186)

(4,308)

Cash flows from financing activities

 

 

 

Dividends paid

(1,591)

(1,307)

(2,049)

Issue of equity shares

385

555

809

Shares purchased by EBT

(600)

(484)

(484)

Shares sold by EBT

596

484

484

Interest paid

(59)

(50)

(110)

Net cash used in financing activities

(1,269)

(802)

(1,350)

Net increase in cash and cash equivalents

8,659

4,024

11,308

Cash and cash equivalents at the beginning of the period

62,454

51,125

51,125

Effect of foreign exchange rate changes

16

11

21

Cash and cash equivalents at the end of the period

71,129

55,160

62,454

 

 

 

Notes Forming Part of the Consolidated Financial Statements

 

1.      Reporting entity

 

Advanced Medical Solutions Group plc ("the Company") is a public limited company incorporated and domiciled in England and Wales (registration number 2867684). 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 2017 comprise the Company and its subsidiaries (together referred to as the "Group").

 

The Group is primarily involved in the design, development and manufacture of surgical and advanced woundcare products for sale into the global medical device market.

 

2.      Basis of preparation

 

The information for the year ended 31 December 2017 does not constitute statutory accounts as defined in section 434 of the Companies Act 2006. A copy of the statutory accounts for that year has been delivered to the Registrar of Companies. The auditor reported on those accounts; their report was unqualified, did not draw attention to any matters of emphasis without qualifying the report and did not contain a statement under section 498 (2) or (3) of the Companies Act 2006.

 

The individual financial statements for each Group company are presented in the currency of the primary economic environment in which it operates (its functional currency). For the purpose of the consolidated financial statements, the results and financial position of each Group company are expressed in pounds sterling, which is the functional currency of the Company and the presentation currency for the consolidated financial statements.

 

3.      Accounting policies

 

The same accounting policies, presentations and methods of computation are followed in the condensed set of financial statements as applied in the Group's latest annual audited financial statements. No new or revised standards adopted in the current period have had a material impact on the Group's financial statements, including IFRS9 financial instruments. IFRS15 Revenue arising from contracts with customers was adopted in 2017.

 

The Group will adopt IFRS 16 'Leases' on 1 January 2019. IFRS 16 provides a single model for leases which recognises a right of use asset and lease liability for all leases which are longer than one year or which are not classified as low value. The most significant impact will be that the Group's land, buildings and car leases will be recognised on the balance sheet. The Group has completed initial impact assessments and anticipates adopting the modified retrospective approach permitted under IFRS 16 with no restatement of comparative information.

 

The unaudited condensed set of financial statements included in this half-yearly financial report have been prepared in accordance with International Accounting Standard 34 'Interim Financial Reporting', as adopted by the European Union. These condensed interim accounts should be read in conjunction with the annual accounts of the Group for the year ended 31 December 2017. The annual financial statements of Advanced Medical Solutions Group plc are prepared in accordance with International Financial Reporting Standards as adopted by the European Union.

 

 

4.      Earnings per share

 

 

 

(Unaudited)

(Unaudited)

(Audited)

 

Six months

Six months

Year

 

ended

ended

ended

 

30 June 2018

30 June 2017

31 December 2017

 

£'000

£'000

£'000

Earnings

Earnings for the purposes of basic and diluted earnings per share being net profit attributable to equity holders of the parent

10,768

9,111

20,134

Number of shares

'000

'000

'000

Weighted average number of ordinary shares for the purposes of basic earnings per share

212,836

210,838

211,563

Effect of dilutive potential ordinary shares: share options, deferred share bonus, LTIPs

3,057

2,942

2,760

Weighted average number of ordinary shares for the purposes of diluted earnings per share

215,893

213,780

214,323

 

Basic EPS is calculated by dividing the earnings attributable to ordinary shareholders by the weighted average number of shares outstanding during the period.

 

Diluted EPS is calculated on the same basis as basic EPS but with the further adjustment to the weighted average shares in issue to reflect the effect of all potentially dilutive share options. The number of potentially dilutive share options is derived from the number of share options and awards granted to employees where the exercise price is less than the average market price of the Company's ordinary shares during the period.

 

 

4.      Earnings per share continued

 

Adjusted earnings per share

 

Adjusted EPS is calculated after adding back exceptional items and amortisation of acquired intangible assets and is based on earnings of:

 

 

(Unaudited)

(Unaudited)

(Audited)

 

Six months

Six months

Year

 

Ended

ended

ended

 

30 June 2018

30 June 2017

31 December 2017

 

£'000

£'000 

£'000

Earnings

Earnings for the purposes of basic and diluted earnings per share being net profit attributable to equity holders of the parent

10,768

9,111

20,134

Amortisation of acquired intangible assets

40

94

134

Earnings excluding exceptional items and amortisation of acquired intangible assets

10,808

9,205

20,268

 

The denominators used are the same as those detailed above for both basic and diluted earnings per share.

 

 

(Unaudited)

(Unaudited)

(Audited)

 

Six months

Six months

Year

 

Ended

ended

ended

 

30 June 2018

30 June 2017

31 December 2017

 

pence 

pence

Adjusted basic EPS

5.08p

4.37p

9.58p

Adjusted diluted EPS

4.31p

9.46p

 

The adjusted diluted EPS information is considered to provide a fairer representation of the Group's trading performance.

 

5.      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, exceptional items, income tax assets and the Group's external borrowings. These are the measures reported to the Group's Chief Executive for the purposes of resource allocation and assessment of segment performance.

 

Business segments

The principal activities of the business units are as follows.

 

Branded

Selling, marketing and innovation of the Group's branded products either sold directly by our sales teams or by distributors.

 

OEM

Distribution, marketing and innovation of the Group's products supplied to medical device partners under their brands and the distribution of bulk materials to medical device partners and convertors.

 

Segment information about these Business Units is presented below:

 

Six months ended

30 June 2018

Branded

OEM

Consolidated

 (unaudited)

£'000

£'000

£'000

Revenue

30,060

17,561

47,621

 

 

 

 

Result

 

 

 

Segment result

9,903

3,914

13,817

Unallocated expenses

 

 

(281)

Profit from operations

 

 

13,536

Finance income

 

 

157

Finance costs

 

 

(59)

Profit before tax

 

 

13,634

Tax

 

 

(2,866)

Profit for the period

 

 

10,768

 

 

 

 

 

5.      Segment information (continued)

 

At 30 June 2018

(unaudited)

Branded

OEM

Consolidated

Other information

£'000

£'000

£'000

Capital additions:

 

 

 

Software intangibles

20

38

58

Development

279

219

498

Property, plant and equipment

1,319

433

1,752

Depreciation and amortisation

(653)

(839)

(1,492)

Balance sheet

 

 

 

Assets

 

 

 

Segment assets

122,852

54,929

177,781

Unallocated assets

 

 

61

Consolidated total assets

 

 

177,842

Liabilities

 

 

 

Segment liabilities

10,861

5,693

16,554

Consolidated total liabilities

 

 

16,554

 

 

 

 

Six months ended

30 June 2017

Branded

OEM

Consolidated

(unaudited) 

£'000

£'000

£'000

Revenue6 (restated)

27,440

18,686

46,126

 

 

 

 

Result

 

 

 

Segment result

7,936

3,724

11,660

Unallocated expenses

 

 

(248)

Profit from operations

 

 

11,412

Finance income

 

 

50

Finance costs

 

 

(50)

Profit before tax

 

 

11,412

Tax

 

 

(2,301)

Profit for the period

 

 

9,111

 

 

 

 

 

At 30 June 2017

(unaudited)

Branded

OEM

Consolidated

Other information

£'000

£'000

£'000

Capital additions:

 

 

 

Software intangibles

612

10

622

Development

271

100

371

Property, plant and equipment

591

652

1,243

Depreciation and amortisation

(664)

(787)

(1,451)

Balance sheet

 

 

 

Assets

 

 

 

Segment assets

113,873

42,039

155,912

Unallocated assets

 

 

103

Consolidated total assets

 

 

156,015

Liabilities

 

 

 

Segment liabilities

10,153

6,856

17,009

Consolidated total liabilities

 

 

17,009

 

 

 

 

 

 

 

 

 

 

 

 

 

5.      Segment information (continued)

 

Year ended

31 December 2017

 

Branded

           OEM

Consolidated

 (audited)

£'000

         £'000

£'000

Revenue

55,244

41,664

96,908

 

Result

 

 

 

Segment result

14,336

11,354

25,690

Unallocated expenses

 

 

(450)

Profit from operations

 

 

25,240

Finance income

 

 

147

Finance costs

 

 

(110)

Profit before tax

 

 

25,277

Tax

 

 

(5,143)

Profit for the year

 

 

20,134

 

 

 

 

 

At 31 December 2017

(audited)

 

 

 

Branded

 

 

 

 

 

 

 

 

OEM

 

 

 

 

 

 

Consolidated

Other Information

£'000

£'000

£'000

Capital additions:

 

 

 

Software intangibles

715

243

958

Development

425

435

860

Property, plant and equipment

1,563

1,338

2,901

Depreciation and amortisation

(1,192)

(1,790)

(2,982)

Balance sheet

 

 

 

Assets

112,057

56,580

168,637

Segment assets

Unallocated assets

 

 

81

Consolidated total assets

 

 

168,718

Liabilities

 

 

 

Segment liabilities

10,406

5,876

16,282

           

 

 

 

Geographical segments

 

The Group operates in the UK, Germany, the Netherlands, the Czech Republic, with a sales office located in Russia and a sales presence in the USA. In presenting information on the basis of geographical segments, segment revenue is based on the geographical location of customers. Segment assets are based on the geographical location of the assets.

 

The following table provides an analysis of the Group's sales by geographical market, irrespective of the origin of the goods or services, based upon location of the Group's customers:

 

 

(Unaudited)

(Unaudited)

(Audited)

 

Six months ended

Six months ended

Year ended

 

30 June 2018

30 June 2017 (restated) 6

31 December 2017

 

£'000

£'000

£'000

United Kingdom

9,190

7,768

17,266

Germany

9,653

9,951

19,062

Europe excluding United Kingdom and Germany

10,957

11,358

22,939

United States of America

16,060

16,082

35,330

Rest of World

1,761

967

2,311

 

47,621

46,126

96,908

 

 

 

 

 

 

 

 

 

 

 

5.      Segment information (continued)

 

 

The following table provides an analysis of the Group's total assets by geographical location.

 

 

(Unaudited)

(Unaudited)

(Audited)

 

Six months ended

Six months ended

Year ended

 

30 June 2018

30 June 2017

31 December 2017

 

£'000

£'000

£'000

United Kingdom

107,561

89,352

98,305

Germany

64,604

61,904

65,212

Europe excluding United Kingdom and Germany

5,193

4,197

4,743

United States of America

484

562

458

 

177,842

156,015

168,718

 

 

 

 

6.      Financial Instruments' fair value disclosures

 

It is the policy of the Group to enter into forward foreign exchange contracts to cover specific foreign currency payments and receipts.

 

The Group held the following financial instruments at fair value at 30 June 2018. The Group has no financial instruments with fair values that are determined by reference to significant unobservable inputs i.e. those that would be classified as level 3 in the fair value hierarchy, nor have there been any transfers of assets or liabilities between levels of the fair value hierarchy. There are no non-recurring fair value measurements.

 

 

The following table details the forward foreign currency contracts outstanding as at the period end:

 

 

Ave. exchange rate

Foreign currency

Fair value

 

30 June 2018

31 Dec 2017

30 June 2018

31 Dec 2017

30 June 2018

31 Dec 2017

 

USD:£1

USD:£1

USD'000

USD'000

£'000

£'000

Cash flow hedges

 

 

 

 

 

 

Sell US dollars

 

 

 

 

 

 

Less than 3 months

1.284

1.382

7,500

8,500

163

(132)

3 to 6 months

1.282

1.369

7,300

6,500

187

(39)

7 to 12 months

1.374

1.283

15,900

14,800

(343)

693

Over 12 months

1.443

1.289

20,000

5,900

(955)

277

 

 

 

50,700

35,700

(948)

799

               

 

 

 

 

Ave. exchange rate

Foreign currency

Fair value

 

30 June 2018

31 Dec 2017

30 June 2018

31 Dec 2017

30 June 2018

31 Dec 2017

 

EUR:£1

EUR:£1

EUR'000

EUR'000

£'000

£'000

Cash flow hedges

 

 

 

 

 

 

Sell Euros

 

 

 

 

 

 

Less than 3 months

1.146

1.215

650

1,000

(8)

(66)

3 to 6 months

1.134

1.177

1,150

1,100

(7)

(46)

7 to 12 months

Over 12 months

1.115

1.109

1.138

-

1,560

2,240

1,800

-

5

3

(29)

-

 

 

 

5,600

3,900

(7)

(141)

               

 

 

7.      Taxation

 

The weighted average tax rate for the Group for the six month period ended 30 June 2018 was 20.7% (first half of 2017: 21.4%, year ended 31 December 2017: 21.9%). The Groups effective tax rate for the full year is expected to be 21.0%, which has been applied to the six months ended 30 June 2018 (first half of 2017: 20.2%, year ended 31 December 2017: 20.4%) after the impact of some disallowable expenditure offset to some extent by the application of patent box and research and development tax relief.

 

 

 

 

 

 

 

8.      Dividends

 

(Unaudited)

(Unaudited)

(Audited)

 

Six months ended

Six months ended

 

Year ended

     

 

 

30 June 2018

£'000

30 June 2017

£'000

31 December 2017

£'000

Amounts recognised as distributions to equity holders in the period:

 

 

 

 

Final dividend for the year ended 31 December 2016 of 0.62p per ordinary share

-

1,307

1,307

Interim dividend for the year ended 31 December 2017 of 0.35p per ordinary share

-

-

742

Final dividend for the year ended 31 December 2017 of 0.75p per ordinary share

1,591

-

-

 

1,591

1,307

2,049

 

9.      Contingent liabilities

 

The Directors are not aware of any contingent liabilities faced by the Group as at 30 June 2018 (30 June 2017: £nil, 31 December 2017: £nil).

 

 

10.    Share capital

 

Share capital as at 30 June 2018 amounted to £10,672,000 (30 June 2017: £10,606,000, 31 December 2017: £10,632,000). During the period the Group issued 1,317,169 shares in respect of exercised share options, LTIPS, Deferred Annual Bonus Scheme and the Deferred Share Bonus Scheme.

 

11.    Going concern

 

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 the next 12 months. 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.

 

With regards to the Group's financial position, it had cash and cash equivalents at 30 June 2018 of £71.1 million and a five-year, £30 million, multi-currency, revolving credit facility, obtained in December 2014, with an accordion option under which AMS can request up to an additional £20 million on the same terms.  The credit facility is provided jointly by HSBC and The Royal Bank of Scotland PLC. It is unsecured on the assets of the Group and is currently undrawn. 

 

While the current economic environment is uncertain, AMS 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 number of long-term contracts with customers across different geographic regions and also with substantial financial resources, ranging from government agencies through to global healthcare companies.

 

After taking the above into consideration, the Directors have reached the 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 condensed consolidated financial statements.

 

12.    Principal risks and uncertainties

 

Further detail concerning the principal risks affecting the business activities of the Group is detailed on pages 32 and 33 of the Annual Report and Accounts for the year ended 31 December 2017. There have been no significant changes since the last annual report.

 

13.    Seasonality of sales

 

There are no significant factors affecting the seasonality of sales between the first and second half of the year.

 

14.    Events after the balance sheet date

 

There has been no material event subsequent to the end of the interim reporting period ended 30 June 2018.

 

15.    Copies of the interim results

 

Copies of the interim results can be obtained from the Group's registered office at Premier Park, 33 Road One, Winsford Industrial Estate, Winsford, Cheshire, CW7 3RT and are available on our website "www.admedsol.com".

 

 

 

 


This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
 
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Interim Results - RNS