Preliminary Results

Advanced Medical Solutions Grp PLC
16 March 2005


For Immediate Release            16 March 2005



                      Advanced Medical Solutions Group plc
                             ('AMS' or 'the Group')

            Preliminary Results for the Year Ended 31 December 2004


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 2004.


Highlights


  • Group revenues up 22% to £11.0 million (2003: £9.0 million)

  • EBITDA at break-even (2003: £1.3 million loss)

  • Pre-tax losses halved to £1.0 million (2003: £2.3 million)

  • Post-tax losses reduced to £0.4 million (2003: £2.1 million)

  • Positive cash flow in second half-year resulting in cash of £3.2 million
    at year-end, sufficient to take Group through to profitability (2003: £3.6
    million)

  • Management strategy of broadening routes to market covering branded
    partners, private label distributors and direct UK business proving
    successful both during the period and post year-end



    -    Johnson & Johnson Wound Management launches silver alginate range in
         US in April and Europe in February 2005


    -    Further licensing and distribution deals signed including three year
         supply agreement with Cardinal Health for private label woundcare
         products in the US in July


    -    Collaborative agreement signed with Nitto Medical for Japan in
         May


    -    Good progress made with UK direct business:


         -    LiquiBandTM tissue adhesive range broadened


         -    ActivHeal(R) advanced woundcare range widely available
              throughout NHS following inclusion on contracts for England in 
              December and Scotland in January 2005


Commenting on the results Dr. Geoffrey Vernon, Chairman of Advanced Medical
Solutions, said:


'AMS has made considerable progress during 2004.  The Group's achievement of
EBITDA break-even on revenue growth of 22% is a major milestone in moving the
Group to profitability.'


For further information, please contact:


Advanced Medical Solutions                    On 16.03.05: [phone]
Don Evans, Chief Executive Officer            Thereafter: [phone]
Mary Tavener, Finance Director

www.admedsol.com


Buchanan Communications                       Tel: [phone]
Mark Court, Mary-Jane Johnson


Notes to Editors:


Advanced Medical Solutions is a leading company in the development and
manufacture of products for the $15 billion global woundcare market.



Founded in 1991 and currently quoted on AIM, Advanced Medical Solutions is
focused on the design, development and manufacture of innovative and
technologically advanced products for woundcare and other medical applications.



In-house natural and synthetic polymer technology is used to provide advanced
wound dressings based on the moist healing principle. AMS's resources ensure a
unique position as a vertically integrated 'one stop shop' to provide all
categories of moist wound healing products. The Company has the capability to
move from product design and development through to production and delivery
ready for distribution into customer markets.



The acquisition of MedLogic in 2002 has brought AMS products and technology in
cyanoacrylate based tissue adhesives that offer benefits over sutures and
staples for closing wounds sold direct to hospitals or through distributors.



AMS's technology and products currently serve the majority of the key global
markets with strategic partners including 3M, Novartis, Johnson & Johnson,
Molnlycke Healthcare, Smith + Nephew and Cardinal Health.



                              CHAIRMAN'S STATEMENT

Overview


I am pleased to report that AMS has made considerable progress during 2004.
Group turnover of £11.0 million was up 22% on prior year with growth being
achieved across both business units, Advanced Woundcare and Wound Closure, and
all geographic regions.


The broadening of its routes to market offers a win-win situation for AMS, its
customers and its partners.  Improved revenues and margins are available to AMS
from offering a generic woundcare range direct to the NHS in the UK and through
private label distributors in overseas markets.  These generic products address
the increasing cost pressures on healthcare budgets and the savings made by
customers allow them to purchase new generation products.  The Group continues
to fund the development of new differentiated products for licensing to its
major woundcare partners for sale under their leading brands.


Pre-tax losses were halved to £1.0 million.  Post-tax losses were reduced to
£0.4 million following recognition of R&D tax credits and deferred tax assets.
The Group reached EBITDA break-even.  This is a major milestone in moving the
Group to profitability.


Operating Review


The Group's core focus remains the development and manufacture of advanced
woundcare and wound closure products for sale in hospitals and long-term care
facilities.  Advanced woundcare products are marketed and distributed into the
$1.5 billion global market through either major woundcare companies, such as 3M,
Johnson & Johnson, Smith & Nephew and Molnlycke under their leading brands, or
through private label distributors such as Cardinal Health.  Products based upon
superglue technology address the emerging tissue adhesives segment of the $5
billion wound closure market.  This market is currently accessed through a
direct sales force in the UK and through distribution partners in Europe. The
direct UK sales force also carries a full range of standard advanced woundcare
products for sale into the NHS hospital and community care markets under our
ActivHeal(R) brand.


The Group has made steady progress in reducing its dependence on the performance
of its major branded partners for delivering revenue growth and profit.  The
strategy of broadening its routes to market by complementing these relationships
with the provision of private label standard products to major distributors and
expanding its direct sales presence in the UK home market is proving to be
successful.


Advanced Woundcare


Sales of £8.9 million were up 20%, double the current woundcare market growth
rate.  This growth was spread across partners in Europe and the US and provides
a solid business base for the future.  New partners were added during the period
with the Group establishing a broad presence in the important Far East market.


The launch of our fibre based silver alginate technology into the US and Europe
by Johnson & Johnson Wound Management under their SilverCelTM brand provides AMS
with a strong entry into this dynamic market segment.


Silver is a broad spectrum antimicrobial that helps to prevent infection.  In
combination with alginate, a biopolymer derived from seaweed, AMS can provide
products ideally suited to treat a wide variety of acute and chronic wounds.


The three-year agreement with Cardinal Health announced in July is a major step
forward in building our private label business.  AMS will provide a full range
of advanced woundcare products for Cardinal Health, for US distribution, under
its Allegiance brand.


The inclusion of our ActivHeal(R) advanced woundcare range on the NHS contracts
for England and Scotland at the year-end was earlier than expected and
illustrates the commitment of the NHS to cost management of woundcare budgets.
Response to our offering from senior management, purchasing officers and
pharmacists of hospital Trusts has been very positive and conversion on the back
of technical and clinical evaluations at the user level is already underway in a
number of centres.


Wound Closure


The tissue adhesive business continues to show good growth with sales up 33% at
£2.1 million maintaining our market leadership position in the use of adhesives
in the UK Accident and Emergency (A & E) arena.  Adhesives are routinely used
for closing facial and scalp wounds, particularly children's, and our LiquiBand
TM product is being used to close around 30,000 wounds per month in the UK.


The launch of SkinlinkTM, an anchored adhesive strip, has strengthened our
product portfolio and allows us to address the majority of wounds traditionally
closed with stitches, staples and adhesive strips.


The introduction of LiquiBand SurgicalTM throughout Europe during 2004 for
closure of surgical incisions in the operating room arena has taken our adhesive
technology into the largest segment of the $5 billion wound closure market.


Outlook


The outlook for the Group remains positive.  With an established business base
covering leading edge advanced woundcare and wound closure products and
technology, a direct sales team focusing on the UK home market supported by
strong branded and private label partners, the Group is well positioned to
continue to grow and to reach profitability within current cash.


Whilst the prime focus remains taking the Group through to sustainable
profitability, the Board continues to review all strategic options to increase
shareholder value.


I would like to thank all AMS employees for their efforts over the past year.


The Group looks forward to delivering a high value woundcare technology company
for our stakeholders.


Dr. G. N. Vernon,
Chairman



Consolidated Profit and Loss Account
For the year ended 31 December 2004
                                                                    Year ended                Year ended
                                                                   31 December               31 December
                                                                          2004                      2003
                                                                         £'000                     £'000

Turnover                                                                11,019                     9,015
Cost of sales                                                          (6,913)                   (5,809)
Gross profit                                                             4,106                     3,206
Distribution costs                                                       (153)                      (86)
Administration costs                                                   (5,352)                   (5,859)
Other operating income                                                     328                       304
Operating loss                                                         (1,071)                   (2,435)
Interest receivable and similar income                                     114                       152
Interest payable and similar charges                                      (33)                      (35)
Loss on ordinary activities before                                       (990)                   (2,318)
taxation
Taxation                                                                   573                       234
Loss sustained for the year                                              (417)                   (2,084)
Basic and fully diluted loss per share                                  (0.3)p                    (1.5)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
For the year ended 31 December 2004


                                                                                   Group
                                                                     Year ended               Year ended
                                                                    31 December              31 December
                                                                           2004                     2003
                                                                          £'000                    £'000

Loss for the financial year                                               (417)                  (2,084)
Currency translation differences on foreign currency net                   (13)                     (19)
investments

Total losses recognised since last annual report                          (430)                  (2,103)



Reconciliation of Movements in Shareholders' Funds
For the year ended 31 December 2004

                                                                Group                         Company
                                                     Year ended    Year ended      Year ended    Year ended
                                                    31 December   31 December     31 December   31 December
                                                           2004          2003            2004          2003
                                                          £'000         £'000           £'000         £'000

Opening shareholders' funds                              12,004        14,107          12,758        14,430
Loss for the financial year                               (417)       (2,084)           (304)       (1,672)
Currency translation differences on
foreign currency net investments                           (13)          (19)               -             -
Closing shareholders' funds                              11,574        12,004          12,454        12,758


The loss for the Company includes an exceptional write-down in the value of
investments of £427k  (2003: £1,842k).


Balance Sheets
At 31 December 2004
                                                     Group                      Company

                                                   2004          2003           2004         2003
                                                  £'000         £'000          £'000        £'000
Fixed assets
Intangible assets                                 2,070         2,238              -            -
Tangible assets                                   3,706         4,373              -            -
Investments                                           -             -          9,589        9,427
                                                  5,776         6,611          9,589        9,427
Current assets
Stocks                                            1,506         1,279              -            -
Debtors -  due within one year                    2,754         2,793             72           35
        -  due after more than                      638           200            200          200
one year
Cash at bank and in hand                          3,160         3,608          2,755        3,223
                                                  8,058         7,880          3,027        3,458
Creditors: amounts falling due
within
one year                                        (1,884)       (2,139)          (162)        (127)
Net current assets                                6,174         5,741          2,865        3,331
Total assets less current                        11,950        12,352         12,454       12,758
liabilities
Creditors: amounts falling due after
more than one year                                (376)         (348)              -            -
                                                 11,574        12,004         12,454       12,758
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                        (39,717)      (39,287)       (37,306)     (37,002)
Equity shareholders' funds                       11,574        12,004         12,454       12,758


Dr D W Evans
Chief Executive Officer


14 March 2005


Consolidated Cash Flow Statement

For the year ended 31 December 2004


                                                                               Year ended           Year ended
                                                                              31 December          31 December
                                                                                     2004                 2003
                                                                                    £'000                £'000

Net cash outflow from operating activites                                           (595)              (1,708)
Returns on investments and servicing of finance
Interest received                                                                     102                  158
Interest element of finance lease rental and hire purchase                            (3)                  (5)
payments
Interest paid                                                                        (30)                 (30)

Net cash inflow from returns on investments and servicing                              69                  123
of finance
Taxation                                                                              389                  153
Capital expenditure and financial investment
Purchase of tangible fixed assets                                                   (284)                (400)
Sale of tangible fixed assets                                                           -                    7

Net cash outflow for capital expenditure and financial                              (284)                (393)
investment
Cash outflow before use of liquid resources and financing                           (421)              (1,825)
Management of liquid resources
Sale of term deposits                                                                 203                2,249
Financing
Repayment of secured loan                                                            (11)                 (10)

Net movement of capital element of finance lease rental
and hire purchase payments                                                            (3)                 (94)

Net cash outflow from financing                                                      (14)                (104)

(Decrease)/increase in cash                                                         (232)                  320


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 (2003:
    142,082,536) and loss of £417k (2003 : £2,084k)


3.  This statement was approved by the Directors and agreed with the
    Group's auditors on 14 March 2005.  A copy can be obtained from the 
    Secretary at the Company's Head Office, Road Three, Winsford Industrial 
    Estate, Winsford, Cheshire CW7 3PD.  The accounting policies adopted for 
    the Preliminary Results are consistent with the published accounts for year 
    ended 31 December 2004.


4.  The figures and financial information for the year 2004 do not
    constitute the statutory financial statements for that year.


5.  The figures and financial information for the year 2003 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 Park Royal Hotel,
    Stretton Road, Stretton, Warrington, Cheshire, WA4 4NS  at 11:00am on 
    Tuesday 24th May 2005.






                      This information is provided by RNS
            The company news service from the London Stock Exchange