Final Results

Advanced Medical Solutions Grp PLC
28 March 2002


For immediate release:                               Thursday 28 March 2002



                      Advanced Medical Solutions Group plc


            Preliminary Results for the Year Ended 31 December 2001


Winsford, Cheshire: Advanced Medical Solutions Group plc ('AMS'), the medical
device company, announces its preliminary results for the year ended 31 December
2001.

Highlights:


•        Losses reduced by 45% to £1.5 million (2000:  £2.7 million)


•        Gross margins improved to 18% from 6%


•        Cash outflow reduced by 55% to £0.8 million (2000:  £1.8 million)


•        £6.0 million net funds at period end


•        Existing partnerships with blue-chip players in woundcare arena
         strengthened


•        Resounding rejection, at recent EGM, of proposal to invite offers for
         the share capital of the Company


•        $3.5 million strategic acquisition of woundcare company, MedLogic
         Global Holdings Limited ('MedLogic') (see separate announcement)


•        £4 million equity fundraising (see separate announcement)



•        Transfer to Alternative Investment Market from Official List of London
         Stock Exchange (see separate announcement)



Commenting on today's results, Dr. Geoffrey Vernon, Non-Executive Chairman,
said:



'AMS' results show the significant progress of the Group towards profitability,
within current cash, in-line with market expectations.  Our stated strategy of
building stronger relationships with our blue-chip partners has already resulted
in significantly improved margins and a continued reduction in losses.



'In addition to our results, we have also announced today the strategic
acquisition of MedLogic, a specialist in tissue adhesives and sealants; a
fundraising and the transfer of our shares from the Official List of the London
Stock Exchange to the Alternative Investment Market.  The combination of these
actions, and predominantly the acquisition which we see as a strong strategic
fit with the Group, will allow us to progress at a greater pace towards building
a substantial international woundcare business.'



                                    - ENDS -

For further information, please contact:
Advanced Medical Solutions                    On 28.03.02: [phone]
Don Evans, CEO                                Thereafter: [phone]
Mary Tavener, Finance Director


Robert W. Baird
Shaun Dobson                                  Tel:[phone]


Buchanan Communications                       Tel: [phone]
Nicola How / Fergus Mellon



Chairman's Statement:



Overview

I am pleased to report that our results for 2001 show the continued progress of
the Group toward profitability within current cash. The Shareholders' decision
at the recent extraordinary general meeting not to invite offers for the share
capital of the Company, I believe confirms the support of the majority of our
shareholders of the Company's strategy to focus on taking the core woundcare
business to break-even and thus provide a solid financial platform from which to
grow a leading medical device company.



As I outlined in my letter accompanying the extraordinary general meeting
circular, Management has demonstrated an ability to control costs and manage
cash. The Board feels that it is now appropriate and opportune to accelerate
growth through selective corporate activity. Following a review of potential
acquisition candidates, the Board feels that the proposed acquisition of
MedLogic (as announced today) will increase the market available to the Group
and assist in positioning the Group within the 'higher end' tissue repair sector
of the woundcare market.  MedLogic develops and manufactures medical grade
adhesives for the wound closure market.



Financial Performance

AMS has made significant progress in reducing its losses and is on track to
reach profitability and a cash generative position in line with current market
expectations.  The continuing focus of the Management team during 2001 on
reducing losses and cash burn has resulted in a 45% reduction in net loss to
£1.5 million (2000:  £2.7 million) on turnover of £7.4 million, while the
operating cash outflow position improved by 55% to £0.8 million.   This,
together with continued tight control of working capital, leaves the Group with
sufficient net funds, £6.0 million, to get the existing business to sustainable
profitability and to implement the strategy to acquire complementary
technologies that will drive growth and increase shareholder value.



Gross margins improved from 6% to 18% despite a reduction in turnover as low
margin, consumer sales were shed as part of a re-focusing of the Group on higher
value, professional woundcare products.



Partnerships

Existing partnerships with blue chip firms such as Smith & Nephew, 3M, Coloplast
and Molnlycke were further strengthened during 2001, which contributed to a 24%
increase in sales for Professional woundcare. Our strategy of focusing on fewer
partners continues to prove successful, allowing a streamlining of the Group at
all levels. As a result of a major review of the Consumer business, a
significant amount of unprofitable business was shed to ensure that higher
margins could be achieved going forward. Although this had an impact on
revenues, it did not reduce the bottom line.



The relationship with Novartis Consumer Health Europe was broadened with the
launch of our new proprietary scar reduction product into the Spanish market
under the Novartis Trofolastin(R) brand.  This is an important step in moving
our Consumer range upmarket from the price sensitive retail end to the higher
value pharmacy market.



Johnson & Johnson Consumer Product Company's Band-Aid(R) product employing our
alginate material is also now on sale in pharmacies across the United States.



Technology

The Group continues to progress its R&D activities to move from passive wound
dressings to higher value active delivery and tissue repair and engineering.
At the simplest level our blister dressings routinely now contain homeopathic /
antiseptic agents such as tea tree oil.



Our collaboration with Noble Fiber Technologies allows us to incorporate silver
fibres into our alginate material, thus producing dressings that provide silver
(a broad spectrum antimicrobial) at the wound site whilst maintaining the fluid
handling and haemostatic features of alginate. Products arising out of this
technology collaboration are being reviewed with potential partners for
development and clinical and regulatory approval for a launch in early 2003.



The granting of two new patents, as announced in September 2001, has
strengthened our hydrogel technology platform. Our new anti-bleed gel, which is
based on one of these patents, forms the basis of a development agreement with a
major pharmaceutical partner. This involves the development of a product under a
leading antibiotic brand.



Our tissue engineering programme, based around the use of biopolymer fibres as
scaffolds for cell growth, was also progressed with the support of external
grant funding.



Prospects

The operational performance during the last two years has provided a firmer
financial footing for the future and this has allowed us to look at ways of
accelerating growth. In addition, a number of external opportunities to increase
the Group's product range and broaden its technology base are currently being
investigated. The Board believes that the proposed acquisition of MedLogic is a
strong strategic fit with the Company's current business and that it will not
delay break-even in line with current market  expectations.


Dr G N Vernon                                             27 March 2002

Chairman



Consolidated Profit and Loss Account
For the year ended 31 December 2001

                                                                               Year ended              Year ended
                                                                              31 December             31 December
                                                                                     2001                    2000
                                                                                    £'000                   £'000

Turnover                                                                            7,373                   7,815


Cost of sales                                                                     (6,075)                 (7,373)

Gross profit                                                                        1,298                     442

Distribution costs                                                                  (136)                   (262)
Administration costs                                                              (3,322)                 (3,701)
Other operating income                                                                222                     402

Operating loss                                                                    (1,938)                 (3,119)


Interest receivable and similar income                                                369                     470
Interest payable and similar charges                                                 (30)                    (37)

Loss on ordinary activities before taxation                                       (1,599)                 (2,686)


Taxation                                                                              129                       -

Retained loss for the year                                                        (1,470)                 (2,686)


Basic loss per share: restated including effect of rights issue                    (1.6)p                  (2.9)p




The above results relate to continuing operations.



There is no difference between reported and historical profits and losses.



Statement of total recognised gains and losses


                                                                                   Year ended          Year ended
                                                                                  31 December         31 December
                                                                                         2001                2000
                                                                                        £'000               £'000

Loss for the financial year                                                           (1,470)             (2,686)
Currency translation differences on foreign
currency net investments                                                                   10                  24

Total losses recognised since last annual report                                      (1,460)             (2,662)



Reconciliation of movements in shareholders' funds
At 31 December 2001


                                                               Group                               Company
                                                   Year ended        Year ended         Year ended         Year ended
                                                  31 December       31 December        31 December        31 December
                                                         2001              2000               2001               2000
                                                        £'000             £'000              £'000              £'000

Opening shareholders' funds                            13,454             9,590             17,068             13,351
Loss for the financial year                           (1,470)           (2,686)            (4,928)            (2,809)
Currency translation differences on
     foreign currency net investments                      10                24                  -                  -
New share capital subscribed                                -             3,184                  -              3,184
Premium on issue of shares during the year                  -             3,822                  -              3,822
Costs of share issue                                        -             (480)                  -              (480)

Closing shareholders' funds                            11,994            13,454             12,140             17,068



The loss for the Company includes an exceptional write-down in the value of
investments of £5,144k (2000:£3,164k).



Balance Sheets
At 31 December 2001

                                                                       Group                           Company
                                                                2001            2000              2001             2000
                                                               £'000           £'000             £'000            £'000
Fixed assets

Tangible assets                                                4,809           5,403                 -                -
Investments                                                        -               -             5,941           10,180

                                                               4,809           5,403             5,941           10,180

Current assets
Stocks                                                           887           1,021                 -                -
Debtors - due within one year                                  1,844           2,385                42               68
         - due after more than one year                          200             200               200              200
Cash at bank and in hand                                       6,238           7,013             5,963            6,642

                                                               9,169          10,619             6,205            6,910

Creditors: amounts falling due within
 one year                                                    (1,778)         (2,228)               (6)             (22)

Net current assets                                             7,391           8,391             6,199            6,888


Total assets less current liabilities                         12,200          13,794            12,140           17,068
Creditors: amounts falling due after
more than one year                                             (206)           (340)                 -                -

                                                              11,994          13,454            12,140           17,068

Capital and reserves


Called up share capital                                        9,355           9,355             9,355            9,355
Share premium account                                         36,910          36,910            36,910           36,910
Other reserve                                                  1,531           1,531                 -                -
Profit and loss account                                     (35,802)        (34,342)          (34,125)         (29,197)


Equity shareholders' funds                                    11,994          13,454            12,140           17,068




These financial statements were approved by the Board on 27 March 2002



Dr. D.W. Evans
Chief Executive Officer



Consolidated Cash Flow Statement
For the year ended 31 December 2001

                                                                                Year ended                  Year ended
                                                                               31 December                 31 December
                                                                                      2001                        2000
                                                                                     £'000                       £'000


Net cash outflow from operating activities                                           (764)                     (1,705)


Returns on investments and servicing of finance
Interest received                                                                      395                         452

Interest element of finance lease
     rental and hire purchase payments                                                (30)                        (37)

Net cash inflow from returns on investments and                                        365                         415
     servicing of finance

Capital expenditure and financial investment
Purchase of tangible fixed assets                                                    (353)                       (660)
Sale of tangible fixed assets                                                          204                           6

Net cash outflow before use of liquid resources and                                  (548)                     (1,944)
financing

Management of liquid resources
Sales of term deposits                                                                 805                           -
Purchase of term deposits                                                                -                     (4,362)

Financing
Share issues by parent company                                                           -                       7,006
Share issue expenses                                                                     -                       (480)
Net movement of capital element of finance
     lease rental and hire purchase payments                                         (237)                       (316)

Net cash (outflow)/inflow from financing                                             (237)                       6,210

Increase/(decrease) in cash                                                             20                        (96)




Notes to the Accounts:



1.            No dividend has been proposed.



2.            The basic loss per share has been calculated on a weighted average
number of shares in issue during the year, namely 93,553,394 (2000: 93,181,925
after adjusting for the effect of the rights issue) and loss of £1,470k (2000:
£2,686k). The comparative loss per share as disclosed in the previous financial
statement has been adjusted for the efforts of the right issue.



3.            This statement was approved by the Directors and agreed with the
Group's auditors on 27 March 2002. A copy can be obtained from the Secretary at
the Company's Head Office, Road Three, Winsford Industrial Estate, Winsford,
Cheshire CW7 3PD.



4.            The figures and financial information for the year 2001 do not
constitute the statutory financial statements for that year.



5.            The figures and financial information for the year 2000 do not
constitute the statutory financial statements for that year. Those financial
statements have been delivered to the Registrar and included in the auditors
report which was unqualified.



The Annual General Meeting will be held at the Blue Cap, 520 Chester Road,
Sandiway, Northwich, Cheshire, CW8 2DN at 11:00 am on 31 May 2002.



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