9 July 2020
Advanced Medical Solutions Group plc
(“AMS” or the “Group”)
Half Year Trading Update
Winsford, UK: Advanced Medical Solutions Group plc (AIM: AMS), the surgical and advanced wound care specialist company, today announces a trading update for the six month period ended 30 June 2020 (the “Period”).
As previously reported, COVID-19 has had an adverse impact on the Group in the Period. However, this has not stopped the Group from making significant progress in a number of areas, including the improved end sales demand for US LiquiBand® as well as key product approvals and launches including the approval of LiquiBand® and LiquiBand® Fix8™ in India.
Revenue for the Period is expected to be in line with the guidance issued in June 2020. As previously reported, COVID-19 disruptions impacted Group revenues by approximately £15 million in the second quarter of 2020. Accordingly, with both Business Units significantly affected by COVID-19, and the Woundcare year-on-year comparator also being affected by some customers’ Brexit preparations in 2019, the Group expects aggregate sales for the Period to be approximately £39 million (H1 2019: £48.7 million). Encouragingly, the Group saw the first revenue contribution from Biomatlante and, more significantly, underlying market share growth for US LiquiBand® arising from sales initiatives implemented by the management team as well as the approval and launch of LiquiBand® Rapid™.
The Group remains confident in its long-term strategy and has continued to invest in R&D and regulatory projects in order to be in the best position to return to growth when end markets recover. In addition, the Group operated its factories at much lower volumes, resulting in under-absorption of its fixed costs. As a result, the Board expect to report adjusted profit before tax in the region of £5 million to £6 million for the Period (H1 2019 £12.8 million).
Cash and dividend
The Group has remained in a robust financial position throughout the pandemic disruption. Over the course of the first half of 2020, the Group tightly managed its working capital and maintained the payment of its final 2019 dividend and generated net cash. At the Period end, the Group had net cash of £68 million (31 December 2019: £64 million).
Outlook and guidance
The Group is starting to see signs of recovery in some markets and expects the sales impact of COVID-19 to gradually reduce in the second half of 2020 and as we move into 2021, with both accident
& emergency and elective surgery volumes recovering to more normal levels. There is, however, expected to be significant variability in the pace of recovery for different geographies and different types of surgical procedures and, with the potential for second waves of COVID-19 infection, it remains difficult to accurately predict the full year financial impact on the Group. However, our current internal forecasts suggest that the overall impact on revenues will be approximately £7 million in the third quarter of 2020 and approximately £3 million in the fourth quarter of 2020.
Chris Meredith, Chief Executive Officer of AMS, commented: “AMS is coping well with the demands of operating in the current environment and our priority continues to be the well-being of our staff and serving our customers. We were pleased to see recent market share gains for LiquiBand® in the US and the launch of LiquiBand® Rapid™ in the first quarter, and with the development plan continuing for LiquiBand® XL, we remain well positioned to grow sales and market share. Our strong balance sheet enables us to continue to invest in R&D and regulatory projects, in order to be in the best position to return to strong growth when the Group’s end markets recover.“
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For further information, please contact:
Advanced Medical Solutions Group plc
Tel: 44 (0) 1606 545508
Chris Meredith, Chief Executive Officer
Eddie Johnson, Chief Financial Officer
Consilium Strategic Communications
Tel: 44 (0) 20 3709 5700
Mary-Jane Elliott / Matthew Neal / Olivia Manser
Investec Bank PLC (NOMAD & Broker)
Tel: 44 (0) 20 7597 5970
Daniel Adams / Patrick Robb / Gary Clarence
About Advanced Medical Solutions Group plc
AMS is a world-leading developer and manufacturer of innovative and technologically advanced products for the global surgical and woundcare markets, focused on quality outcomes for patients and value for payers. AMS has a wide range of surgical products including tissue adhesives, sutures, haemostats, and internal fixation devices, which it markets under its brands LiquiBand®, RESORBA®, and LiquiBandFix8®. AMS also supplies wound care dressings such as silver alginates, alginates and foams through its ActivHeal® brand as well as under white label. In 2019, the Group made two acquisitions: Sealantis, an Israeli medical device company with a patent-protected sealant technology platform; and Biomatlante, an established developer and manufacturer of innovative surgical biomaterial technologies based in France.
AMS’s products, manufactured in the UK, Germany, France, the Netherlands, and the Czech Republic, 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, the Czech Republic and Russia. The Group has R&D innovation hubs in the UK, Germany, France and Israel. Established in 1991, the Group has approximately 700 employees. For more information, please see www.admedsol.com.
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