Final Results

Advanced Medical Solutions Grp PLC 30 March 2004 For Immediate Release: 07.00, Tuesday 30 March 2004 Advanced Medical Solutions Group plc Preliminary Results for the Year Ended 31 December 2003 Winsford, UK: Advanced Medical Solutions Group plc (AIM: AMS), the global woundcare technology company, today announces its preliminary results for the year ended 31 December 2003. Highlights: • Group revenues up 8% to £9.0 million (2002 : £8.4 million) • Further improvement on gross margins - increased to 36% (2002 : 30%) • Significant investment to support revenue growth in 2004 resulting in post-tax losses of £2.1 million (2002 : £1.4 million) • Key licensing and distribution agreements signed in the year and since year-end for advanced woundcare products: - Further expansion of international presence with new marketing and distribution partnerships with B. Braun Hospicare, Hartmann AG, Teva Medical Ltd, ADL GmbH and Interpharma Proprietary Ltd among others. - Silver alginate licensed globally to Johnson & Johnson Woundcare. • MedLogic tissue adhesive business integrated and performing to expectations: - Sales up 36% to £1.7 million. - LiquiBand SurgicalTM launched in Europe for closing surgical incisions. - FDA 510(k) clearance obtained for introduction of a liquid bandage into the US Consumer OTC market. • Full range of standard advanced woundcare products introduced for direct sale into NHS Hospitals and Community Care markets. • Positive outlook for 2004 following strong first quarter with sales up 30% on previous year. • Cash of £3.6 million (2002 : £5.6 million) sufficient to take the Group through to profitability. Commenting on the results Don Evans, Chief Executive Officer of Advanced Medical Solutions, said: 'The combination of margin improvement, new distribution agreements and progress in our product portfolio gives us confidence in the current year.' For further information, please contact: Advanced Medical Solutions On 30.03.04: +44 (0) 20 7466 5000 Don Evans, Chief Executive Officer Thereafter: +44 (0) 1606 545508 Mary Tavener, Finance Director www.admedsol.com Buchanan Communications Tel: +44 (0) 20 7466 5000 Mark Court, Mary-Jane Johnson CHAIRMAN'S STATEMENT Overview I am pleased to report that during 2003, AMS continued its progress towards building a high value global woundcare technology company. Management focus over the past few years on improving gross margins by concentrating on higher value advanced woundcare products, and the acquisition and integration of the MedLogic wound closure business, has been successful. Gross margins improved further from 30% to 36%, with Group revenues growing by 8% to £9.0 million. Significant investments made in sales and marketing and product development, to deliver revenue growth in 2004 to take the Group through to break-even, resulted in post-tax losses of £2.1 million. Cash at £3.6 million remains sufficient to achieve sustainable profitability. Operational Review The Group's core focus in 2003 remained the development and manufacture of advanced woundcare products to be marketed and distributed through blue-chip partners into hospitals and nursing homes (Professional) and retail pharmacies (Consumer). This is a $1.5 billion global market. Success in Professional Woundcare has been heavily dependent upon the performance of the Group's partners, which includes major international woundcare companies such as Johnson & Johnson, 3M, Smith & Nephew, Molnlycke and Coloplast. Revenue growth in 2003 was limited by delays in signing partner deals and launching new products. The tough economic conditions experienced during the first half year with the uncertainties caused by the Iraq war resulting in reduced international travel, and the disruptive impact of the resolution put by a shareholder, AVRC, at the AGM to seek offers for all or part of the Group, delayed the signing of partnership deals. Although a large number of deals were signed during the year, these came too late to deliver sales in 2003 but are in place to support revenue growth in 2004. New partnerships have been established with a broad range of companies for a variety of products and markets. The relationship with B. Braun Hospicare for both fully packed product and rolls of bulk material (roll-stock) further strengthens our position in alginates - a wound dressing based on seaweed. We have introduced polyurethane foam products into the US market with Paul Hartmann AG and have accessed the new markets of Israel (Teva Medical Ltd) and Australia (Interpharma Proprietary Ltd) with a full range of advanced woundcare products. Our agreement with ADL GmbH broadens our presence in Germany with a company focussed on the Community Care market alongside our existing hospital business. A global exclusive agreement for silver alginate, using the X-StaticTM fibres supplied by Noble Fiber Technology Inc, with Johnson & Johnson Wound Management was completed. This is a first step in upgrading the AMS product range to include active ingredients such as anti-microbials, which help to prevent infection. Regulatory clearance for sale of this product into the US has been obtained and European approval is expected during 2004. In addition to the delays which restricted growth, a planned shift from cartoned product to roll-stock with one of our major European partners reduced sales turnover but improved margins in line with our strategy of moving to higher value business. A thorough re-evaluation of the Consumer OTC opportunity for the use of our technology as first-aid dressings was conducted during 2003. This has shown that current manufacturing costs prohibit sufficient margin to be made to justify expanding this business apart from a few selective areas. The major opportunities identified are in products for reducing the size and redness of existing scars, and for liquid bandages as alternatives to traditional first-aid plasters. These opportunities will be exploited on a niche basis whilst the main focus of the Group will remain on the Professional Woundcare market. The acquisition of the MedLogic tissue adhesive business in May 2002 has allowed AMS to access the $5 billion global wound closure market. Although adhesives currently make up only a small part of this market, it has been estimated that up to 40% of wounds currently closed by sutures and staples are suitable for closure by adhesives. The MedLogic business has been successfully integrated into the Group during 2003 and delivered revenue growth of 36% on an annualised basis. The Group strengthened its market leadership position in the UK with LiquiBandTM tissue adhesive for use in closing trauma wounds in the Accident and Emergency Department and with the launch of LiquiBand SurgicalTM in December, has now accessed the much larger Operating Room (OR) market for closure of surgical incisions. Both these products, which are sold through a direct sales force in the UK are being rolled out throughout Europe during 2004 with country specific distributors who have a presence and focus primarily in the OR. The agreement signed with Resorba Clinicare GmbH, for the key German market in January this year, has supplemented strong existing distribution in Italy and Denmark. Agreements for further countries are under discussion. To leverage the UK direct resource and existing customer relationships, a full range of standard advanced woundcare products are also now being offered to the NHS through this sales and marketing infrastructure. The NHS currently spends an estimated £100 million per year on advanced woundcare products as used in hospitals, nursing homes and in community care. Drug Tariff approval for these products has been obtained, which allows them to be prescribed by healthcare professionals throughout England and Wales. Good progress has also been made in exploiting the MedLogic technology in the Consumer arena for use as liquid bandages for protecting skin and treating minor wounds. Specific products are being progressed through development and regulatory approval for market introduction by the end of 2004. Corporate Activity The Board continues to evaluate all options for delivering shareholder value. The 2002 EGM and the 2003 AGM resolutions by AVRC seeking offers for all or part of the Group were not supported by the vast majority of shareholders. This activity has been an unwelcome and costly distraction to management and caused uncertainty to our partners. I am pleased to report that AVRC's shares were placed in July 2003 with new and existing shareholders. The success of the MedLogic acquisition has confirmed management's strategy of focussing on taking the core business to profitability whilst using shareholder support when appropriate to deliver strategic deals that can move the Group to higher value and accelerate future growth and earnings. Further opportunities, particularly those that could transform the business, will continue to be considered by the Board. Prospects The Group finished 2003 strongly and this trend has continued into 2004 with growth of 30% being achieved during the first quarter in line with forecast. With an established business base covering leading edge advanced woundcare and wound closure products and technology, a focussed direct sales team in the UK home market supported by strong global marketing and distribution partners, the Group is well positioned to achieve the necessary growth to come through to profitability within its current cash position. I would like to thank all AMS employees for their hard work during the last 12 months and look forward to their achieving the success they have worked towards in creating and delivering a high value woundcare technology company for our shareholders. Dr. Geoffrey N. Vernon Chairman Consolidated Profit and Loss Account For the year ended 31 December 2003 Year ended Year ended 31 December 31 December 2003 2002 £'000 £'000 Turnover 9,015 8,372 Cost of sales (5,809) (5,887) Gross profit 3,206 2,485 Distribution costs (86) (38) Administration costs (5,859) (4,406) Other operating income 304 532 Operating loss (2,435) (1,427) Loss on disposal of fixed assets - (249) EGM costs - (202) Loss on ordinary activities before interest and taxation (2,435) (1,878) Interest receivable and similar income 152 223 Interest payable and similar charges (35) (34) Loss on ordinary activities before taxation (2,318) (1,689) Taxation 234 292 Loss sustained for the year (2,084) (1,397) Basic and fully diluted loss per share (1.5)p (1.1)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 Group Year ended Year ended 31 December 31 December 2003 2002 £'000 £'000 Loss for the financial year (2,084) (1,397) Currency translation differences on foreign currency net investments (19) 15 Total losses recognised since last annual report (2,103) (1,382) Reconciliation of movements in shareholders' funds At 31 December 2003 Group Company Year ended Year ended Year ended Year ended 31 December 31 December 31 December 31 December 2003 2002 2003 2002 £'000 £'000 £'000 £'000 Opening shareholders' funds 14,107 11,994 14,430 12,140 Loss for the financial year (2,084) (1,397) (1,672) (1,205) Currency translation differences on foreign currency net investments (19) 15 - - New share capital subscribed - 2,427 - 2,427 Premium on issue of shares during the year - 1,711 - 1,711 Costs of share issue - (643) - (643) Closing shareholders' funds 12,004 14,107 12,758 14,430 The loss for the Company includes an exceptional write-down in the value of investments of £1,842k (2002: £1,372k). Balance Sheets At 31 December 2003 Group Company 2003 2002 2003 2002 £'000 £'000 £'000 £'000 Fixed assets Intangible assets 2,238 2,406 - - Tangible assets 4,373 4,901 - - Investments - - 9,427 9,138 6,611 7,307 9,427 9,138 Current assets Stocks 1,279 918 - - Debtors - due within one year 2,793 2,444 35 44 - due after more than one year 200 200 200 200 Cash at bank and in hand 3,608 5,558 3,223 5,098 7,880 9,120 3,458 5,342 Creditors: amounts falling due within one year (2,139) (1,838) (127) (50) Net current assets 5,741 7,282 3,331 5,292 Total assets less current liabilities 12,352 14,589 12,758 14,430 Creditors: amounts falling due after more than one year (348) (482) - - 12,004 14,107 12,758 14,430 Capital and reserves Called up share capital 11,782 11,782 11,782 11,782 Share premium account 37,978 37,978 37,978 37,978 Other reserve 1,531 1,531 - - Profit and loss account (39,287) (37,184) (37,002) (35,330) Equity shareholders' funds 12,004 14,107 12,758 14,430 Dr. D.W. Evans Chief Executive Officer 29 March 2004 Consolidated Cash Flow Statement For the year ended 31 December 2003 Year ended Year ended 31 December 31 December 2003 2002 £'000 £'000 Net cash outflow from operating activities (1,708) (1,121) Returns on investments and servicing of finance Interest received 158 229 Interest element of finance lease rental and hire purchase payments (5) (13) Interest paid (30) (21) Net cash inflow from returns on investments and servicing of finance 123 195 Taxation 153 129 Capital expenditure and financial investment Purchase of tangible fixed assets (400) (354) Sale of tangible fixed assets 7 15 Net cash outflow for capital expenditure and financial investment (393) (339) Acquisitions and disposals Purchase of subsidiary undertaking - (2,789) Net cash acquired with subsidiary undertaking - (27) Net cash outflow for acquisitions and disposals - (2,816) Cash outflow before use of liquid resources and financing (1,825) (3,952) Management of liquid resources Sale of term deposits 2,249 739 Financing Issue of shares - 4,018 Share issue expenses - (643) Repayment of secured loan (10) (6) Net movement of capital element of finance lease rental and hire purchase (94) (114) payments Net cash (outflow)/inflow from financing (104) 3,255 Increase in cash 320 42 Notes to the Accounts:- 1. No dividend has been proposed. 2. The basic loss per share has been calculated on a weighted average number of shares in issue during the year, namely 142,082,536 (2002 : 126,127,749) and loss of £2,084k (2002 : £1,397k). 3. This statement was approved by the Directors and agreed with the Group's auditors on 29 March 2004. 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 2003 do not constitute the statutory financial statements for that year. 5. The figures and financial information for the year 2002 do not constitute the statutory financial statements for that year. Those financial statements have been delivered to the Registrar and included in the auditors' report which was unqualified. 6. The Annual General Meeting will be held at The Blue Cap Hotel, 520 Chester Road, Sandiway, Northwich, Cheshire, CW8 2DN at 11:00 am on 19th May 2004. This information is provided by RNS The company news service from the London Stock Exchange

Companies

Advanced Medical Solutions Group (AMS)
UK 100
FTSE quotes by TradingView

Latest directors dealings

All directors dealings today