TIDMAMS
RNS Number : 5621Q
Advanced Medical Solutions Grp PLC
13 September 2017
For immediate release 13 September 2017
Advanced Medical Solutions Group plc
("AMS" or the "Group")
Interim Results for the six months ended 30 June 2017
Winsford, UK, 13 September 2017: 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 2017.
Financial Highlights:
H1 H1 Reported Growth
2017 2016 growth at constant
currency(1)
--------------------------- ------- ------ --------- -------------
Group revenue (GBP
million) 45.9 39.2 17% 8%
--------------------------- ------- ------ --------- -------------
Adjusted(2) profit
before tax (GBP million) 11.5 9.5 21% -
--------------------------- ------- ------ --------- -------------
Profit before tax (GBP
million) 11.4 9.0 27% -
--------------------------- ------- ------ --------- -------------
Adjusted(2) diluted
earnings per share
(pence) 4.31p 3.68p 17% -
--------------------------- ------- ------ --------- -------------
Diluted earnings per
share (pence) 4.26p 3.46p 23% -
--------------------------- ------- ------ --------- -------------
Net operating cash
flow before exceptional
items(3) (GBP million) 9.1 9.8 (7%) -
--------------------------- ------- ------ --------- -------------
Net cash (GBP million)(4) 55.2 41.1 34% -
--------------------------- ------- ------ --------- -------------
Interim dividend per
share (pence) 0.35p 0.30p 17%
--------------------------- ------- ------ --------- -------------
Business Highlights:
-- Group revenues up 17% to GBP45.9 million and by 8% at constant currency
-- Group streamlined into two Business Units; Branded and OEM,
to support strategic initiatives
o Branded revenues up 26% to GBP27.3 million (2016 H1: GBP21.6
million) and by 15% at constant currency
o OEM revenues up 6% to GBP18.6 million (2016 H1: GBP17.5
million) and unchanged at constant currency
-- Continued strong performance with LiquiBand(R) topical tissue
adhesives, sales up 40% to GBP13.0 million (2016 H1: GBP9.3
million) and by 26% at constant currency
o US revenues up 52% to GBP9.1 million (2016 H1: GBP6.0
million), and by 32% at constant currency. US market share by
volume increased to 24% (June 2016: 19%)
-- RESORBA(R) branded products, up 20% to GBP10.3 million (2016
H1: GBP8.6 million) and by 6% at constant currency
-- Antimicrobial dressings up 19% to GBP9.7 million (2016 H1:
GBP8.1 million) and by 13% at constant currency
Commenting on the interim results, Chris Meredith, CEO of AMS,
said:
"The Group has delivered another good set of results and we are
confident of meeting Board expectations for the full year.
"Sales of LiquiBand(R) are strong in all main markets. All of
our brands have made good progress and have shown improved
performance as a result of our marketing initiatives.
"We remain optimistic about our organic growth prospects and our
innovative R&D pipeline and continue to closely monitor and
evaluate acquisition opportunities to capitalise on our strong
financial and strategic position."
- End -
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 exceptional items which, in 2017 H1
were GBPnil (2016 H1: GBP0.4 million) and before amortisation of
acquired intangible assets which, in 2017 H1, were GBP0.1 million
(2016 H1: GBP0.1 million) as defined in the financial review
3 Operating cash flow is arrived at by taking the operating
profit for the period before exceptional items of GBPnil (2016 H1:
GBP0.4 million) and adjusting it for depreciation, amortisation,
working capital movements and other non-cash items
4 Net cash is defined as cash and cash equivalents plus short
term investments less financial liabilities and bank loans
For further information, please contact:
Advanced Medical Solutions Group Tel: +44 (0)
plc 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
/ Philippa Gardner / Rosie Phillips
Investec Bank plc (NOMAD) & Broker Tel: +44 (0)
20 7597 5970
Daniel Adams / 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, woundcare and wound closure markets, focused on quality
outcomes for patients and value for payers. AMS has a wide range of
products which it markets under its brands ActivHeal(R) ,
LiquiBand(R) and RESORBA(R) 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 75 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 600 employees. For
more information please see www.admedsol.com.
Chairman's Statement
AMS continues to perform well across the Group and is set to
deliver another year of good growth and strong financial
performance.
The Group has reviewed its business structure and has
consolidated its Business Units from four to two. The Branded
Direct and Branded Distributed Business Units have now been
combined into the Branded Business Unit which will focus on
selling, marketing and innovation of all AMS branded products,
whether sold directly by our sales teams or through our
distributors. The OEM and Bulk Business Units have been
consolidated within the OEM Business Unit and will focus on the
distribution, marketing and innovation of the Group's products that
are supplied to our medical device partners under their brands.
This new structure will enhance focus, improve marketing
efficiencies and support the strategic initiatives of the
Group.
The Group's strategic initiatives continue to be:
-- Growing the business by investing in R&D
-- Extending the markets for our existing products
-- Evaluating acquisition opportunities that align with the Group's strategy
Good progress has been made with all of our brands. LiquiBand(R)
continues to gain market share in the US, now at 24%, gaining 4%
since June 2016. Our RESORBA(R) brands grew steadily across all
territories and ActivHeal(R) reversed its decline and grew 9% to
GBP3.1 million (2016 H1: GBP2.9 million).
We launched a number of new foam product ranges in the first
half of 2016 through our OEM partners and, as previously guided, we
have seen the effects of last year's pipeline filling this year.
Despite this effect, we are pleased to report that, sales in this
Business Unit grew 6% at reported currency to GBP18.6 million (2016
H1: GBP17.5 million) and were unchanged at constant currency.
The Group continues to deliver a strong financial performance.
Revenue increased by 17% to GBP45.9 million (2016 H1: GBP39.2
million) and by 8% at constant currency and adjusted profit before
tax(5) increased by 21% to GBP11.5 million (2016 H1: GBP9.5
million). Our net cash position 30 June 2017 was GBP55.2 million
(31 December 2016: GBP51.1 million).
Dividend
The Board intends to pay an interim dividend of 0.35p per share
(2016 H1: 0.30p), an increase of 17%, on 27 October 2017 to
shareholders on the register at the close of business on 29
September 2017.
Team
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 solid results and is trading in
line with Board expectations for the year ending 31 December
2017.
Peter Allen
Chairman
5 Adjusted profit before tax is adjusted for exceptional items
and amortisation of acquired intangible assets
Chief Executive's Review
I am pleased to report that the Group again performed strongly
in the period under review. Following a decision to streamline our
Business Units in alignment with our strategic focus, all segment
information is presented under the new Business Unit structure and
includes a restatement of the prior year values.
Business Review
Branded Business Unit
Branded revenue was 26% higher at GBP27.3 million (2016 H1:
GBP21.6 million) and 15% higher at constant currency.
LiquiBand(R)
LiquiBand(R) , our range of medical adhesives based on
cyanoacrylate, is our largest brand with sales of GBP13.0 million
(2016 H1: GBP9.3 million), up 40% on the prior six months and up
26% at constant currency. It is sold in over 50 countries and
includes our adhesives that are used to close wounds topically in
the Operating Room and Accident and Emergency setting.
The US is our largest market and where we continue to gain
market share. We access the market through distributors who are
able to target both hospitals and non-hospitals, helping to
identify customers and convert opportunities into sales. Sales
increased by 52% to GBP9.1 million and by 32% at constant currency
(2016 H1: GBP6.0 million) with our portfolio of cyanoacrylate
formulations successfully addressing the needs of the market. Our
overall US market share by volume, now stands at 24%, an increase
of 1% since December 2016.
Outside of the US, our direct teams in the UK and Germany have
performed well, with reported revenues up 15% to GBP2.8 million
(2016 H1: 2.4 million) and up 12% at constant currency. Sales
through our distributors in other territories, have increased 27%
to GBP1.2 million (2016 H1: GBP0.9 million) and 25% at constant
currency.
LiquiBand(R) Fix8(TM)
LiquiBand(R) Fix8(TM) is our brand of adhesive and related
device that is used internally in hernia mesh fixation procedures.
Sales increased by 5% to GBP0.8 million (2016 H1 GBP0.8 million)
and by 2% at constant currency. Sales growth has been restricted
due to design modifications made following surgeon feedback to
enhance the device. The updated device is now available and
increased surgeon uptake is expected to return next year.
Work is ongoing to broaden the claims on the use of the device
for hernia mesh fixation as well as for a number of other
laparoscopic surgical applications. Additionally, we are developing
a device for hernia mesh fixation for use in open surgery which we
expect to launch in the first half of 2018.
At present, the device is approved for use within Europe and
those markets that accept European approval standards. We started
the process to get LiquiBand(R) Fix8(TM) approved for use in the US
market at the beginning of the year. A Contract Research
Organisation (CRO) has been selected following study design and in
anticipation of first patient recruitment.
Surgeon response remains extremely positive and the future
growth potential of this product is very strong.
RESORBA(R)
Our RESORBA(R) branded products portfolio is comprised of a
comprehensive range of sutures which are used to close wounds and a
range of bio-surgical products that include collagens, cellulose
and bone substitutes that can be used as haemostats or scaffolds
for tissue growth. Sales of RESORBA(R) products increased by 20% to
GBP10.3 million (2016 H1: GBP8.6 million), and by 6% at constant
currency.
Within this, sales of sutures increased by 19% to GBP6.4 million
(2016 H1: GBP5.3 million) and by 5% at constant currency and sales
of bio-surgical products increased by 22% to GBP3.7 million (2016
H1: GBP3.0 million) and by 8% at constant currency.
Of the GBP10.3 million sales, GBP6.5 million (2016 H1: GBP5.8
million) were in Germany, up 13% on the prior year and 1% at
constant currency, while sales outside Germany increased by 34% to
GBP3.8 million (2016 H1: GBP2.8 million) and 17% at constant
currency. We continue to access new markets, in particular Asia
Pacific and target specific applications for our RESORBA(R)
brands.
In R&D we are making good progress towards including a range
of different antibiotics that can be incorporated in our
bio-surgical range of products. We expect to file for European
approval for the first of these in Q2 2018.
ActivHeal(R)
ActivHeal(R) is our range of high quality woundcare dressings
that offer the NHS cost savings.
Sales of ActivHeal(R) increased by 9% to GBP3.1 million (2016
H1: GBP2.9 million) in the first six months. The Group has enhanced
its education and marketing materials as well as broadened its
product range with our new antimicrobial and atraumatic foam
dressing ranges which launched last year. Further additions to the
range, such as our new high performance dressing, are expected to
be launched later this year. Overall, we are pleased with the
progress that has been made, reversing the decline that was
reported at the previous set of results.
OEM Business unit
Our OEM business supports our partners with a multi-product
portfolio of advanced woundcare products and bulk materials.
Reported revenue increased 6% to GBP18.6 million (2016 H1: GBP17.5
million) and was unchanged at constant currency. As previously
reported, our 2016 results included pipeline fill of approximately
GBP1 million relating to the atraumatic foam product launch, which
was anticipated to impact reordering in the current year.
Sales of antimicrobial dressings increased by 19% to GBP9.7
million (2016 H1: GBP8.1 million) and by 13% at constant currency.
Within this, silver alginate products grew by 13% to GBP8.6 million
(2016 H1: GBP7.6 million) and by 7% at constant currency and the
PHMB foam range grew by 116% at reported and constant currency to
GBP1.1 million (2016 H1: GBP0.5 million). Our PHMB foam range was
approved for use in Europe in 2016 and approval for use in the US
was expected in 2017. We have now received approval to market our
PHMB foam dressings in the US, however, due to claim limitations,
we have decided to pause launching in the US until we can market
these products with extended claims.
In our non-antimicrobial ranges of products, sales of our base
foams were down 27% at reported currency to GBP3.4 million (2016
H1: GBP4.6 million) and by 33% at constant currency. Sales were
impacted by the pipeline fill of new products in 2016. Sales of our
other technologies, which include alginates and gels, increased 15%
at reported currency to GBP5.5 million (2016 H1: GBP4.8 million)
and by 9% at constant currency.
In the latter part of 2016, we also noted a slowdown in activity
in the Middle East which impacted one of our partners with
significant business in the region. This trend did not recover in
the first half of 2017, however, we continue to believe in the
medium and long term potential of this market.
In R&D we are continuing to work on extending our product
portfolio. We have developed a range of high performance dressings
and atraumatic thin foams which we expect to launch later in the
year and we are also developing a range of surgical dressings which
are expected to launch in the first half 2018.
Operations and regulatory
With the business continuing to show strong organic growth, we
have made investments in our converting capability in our Etten
Leur site which is due to complete by the end of this year, as well
as improving our packing capability in Nuremberg which is expected
to complete in 2018.
In planning for the medium to long term, we have leased two
adjacent units at the Winsford site and have also made plans to
extend the capacity of the Plymouth facility.
Following the FDA inspection of our Winsford site in June 2016,
our Plymouth facility was also inspected by the FDA in April 2017.
We were very pleased with the outcome of this audit with no non-
conformances raised.
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. Our notified body BSI is an
early adopter of the new standard and we are working with our OEM
partners to ensure that we meet the new requirements. We anticipate
that, although there will be some additional costs associated with
meeting the new requirements, overall, the tighter regulatory
standards should prove beneficial for the Group.
Our implementation of Oracle ERP is ongoing in Germany and is
expected to complete later this year. It is anticipated that this
will bring benefits from better availability of information.
A supplier raw material change has required a process
revalidation of some of our more established foam ranges. This
process change is now completing and there has been no meaningful
impact on sales in H1.
Acquisitions strategy
The Group is actively looking for businesses that meet its
acquisition strategy of:
-- licensing or acquiring technology that allows us to leverage
our global OEM customer base or branded routes to market,
-- licensing or acquiring additional brands within the
woundcare, wound closure or surgical setting that complement our
existing range, and
-- geographic expansion through acquiring surgically focused
companies with strong direct sales capability and ownership of
complementary products
We have an internal team working with advisors to identify,
appraise and progress acquisition opportunities.
Referendum vote to leave the EU
To date, there has been no day-to-day operational impact of the
referendum vote to leave the European Union, other than changes to
currency exchange rates. In preparation, the Group is investigating
the possibility of obtaining Authorised Economic Operator status
for its UK trading entities and with a strong footprint in mainland
Europe, the Group continues to be well placed to deal with the
uncertain outcome of the UK negotiations with the EU.
Summary and outlook
The first half of 2017 has seen another good performance by the
Group and we are confident of meeting Board expectations for the
full year. With our increasing portfolio of products, strong
partners and the opportunities we see from our R&D pipeline,
the Board remains optimistic about our prospects and the potential
for further growth.
Financial Review
Overview
Revenue increased by 17.3% to GBP45.9 million (2016 H1: GBP39.2
million). At constant currency, revenue growth would have been
8.1%.
Amortisation of acquired intangible assets was GBP0.1 million in
the six month period (2016 H1: GBP0.1 million).
Comparisons with 2016 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 Six months
ended ended
30 June 30 June 2016
2017
Adjusted Income Statement GBP'000 GBP'000 Change
--------------------------- -------------- -------------- --------
Revenue 45,910 39,153 17.3%
--------------------------- -------------- -------------- --------
Gross profit 27,478 22,473 22.3%
Distribution costs (534) (512) 4.3%
Adjusted administrative
expenses(6) (15,711) (12,879) 22.0%
Other income 273 415 (34.2)%
--------------------------- -------------- -------------- --------
Adjusted operating
profit 11,506 9,497 21.2%
Net finance income - 2
--------------------------- -------------- -------------- --------
Adjusted profit before
tax 11,506 9,499 21.1%
Amortisation of acquired
intangibles (94) (122) (23.8)%
Exceptional items - (361)
--------------------------- -------------- -------------- --------
Profit before tax 11,412 9,016 26.6%
Tax (2,301) (1,680) 37.0%
--------------------------- -------------- -------------- --------
Profit for the period 9,111 7,336 24.2%
--------------------------- -------------- -------------- --------
Adjusted earnings
per share - basic(7) 4.37p 3.74p 16.8%
Earnings per share
- basic(7) 4.32p 3.51p 23.3%
--------------------------- -------------- -------------- --------
Adjusted earnings
per share - diluted(7) 4.31p 3.68p 16.9%
Earnings per share
- diluted(7) 4.26p 3.46p 23.3%
--------------------------- -------------- -------------- --------
6 Administration expenses exclude exceptional items and
amortisation of acquired intangible assets
7 see Note 4 Earnings per share for details of calculation
The gross margin percentage for the Group was 59.9% (2016 H1:
57.4%). This 250bps increase in gross margin was mainly as a result
of sales mix and favourable exchange rates
Adjusted operating profit increased by 21.2% to GBP11.5 million
(2016 H1: GBP9.5 million) and the adjusted operating margin
increased by 80bps to 25.1% (2015 H1: 24.3%) due to sales mix and
favourable foreign exchange movements. Administration expenses
(excluding exceptional items and amortisation of acquired
intangible assets) increased by 22%. Of this, approximately 15% was
due to foreign exchange effects arising from the translation of
costs in Europe and the US arising from the weakness of sterling
against both the Euro and the US dollar. The remainder of the
increase was due to investment in sales and marketing and increased
costs from regulatory and clinical work.
Adjusted diluted earnings per share increased by 16.9% to 4.31p
(2016 H1: 3.68p) and diluted earnings per share increased by 23.3%
to 4.26p (2016 H1: 3.46p).
The Group generated profit before tax of GBP11.4 million (2016
H1: GBP9.0 million) and had net cash of GBP55.2 million at the half
year end (2016 H1: GBP41.1 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 2017 Branded OEM
GBP'000 GBP'000
------------------------------ ---- -------- --------
Revenue 27,342 18,568
Profit from operations 7,936 3,724
Amortisation of
acquired intangibles 89 5
Adjusted profit
from operations(8) 8,025 3,729
Adjusted operating
margin(8) 29.4% 20.1%
------------------------------------ -------- --------
Six months ended
30 June 2016 (re-presented)
Revenue 21,622 17,531
Profit from operations 6,134 3,524
Amortisation of
acquired intangibles 116 6
Adjusted profit
from operations(8) 6,250 3,530
Adjusted operating
margin(8) 28.9% 20.1%
------------------------------------ -------- --------
8 Excludes amortisation of acquired intangible assets
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 26.5% to GBP27.3 million (2016 H1:
GBP21.6 million) and by 14.8% at constant currency, with sales of
LiquiBand(R) into the US being the main driver of growth.
Adjusted operating margin increased by 50 bps to 29.4% (2016 H1:
28.9%) despite ongoing investment in our sales & marketing
teams. R&D expense was 2.2% of revenues (2016 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 increased by 5.9% to GBP18.6 million (2016 H1:
GBP17.5 million) at reported currency but were unchanged at
constant currency. R&D expense was 4.0% of revenues (2016 H1:
3.8%) with spend being incurred in the development of post-surgical
dressings and high performance dressings.
Adjusted operating margin was unchanged at 20.1% (2016 H1:
20.1%).
Geographic breakdown of revenues
The geographic breakdown of Group revenues in 2017 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
GBP:US$ or GBP:Euro exchange rate would impact Sterling revenues by
approximately 4% and 3% respectively and, in the absence of any
hedging, this would result in an impact on profit of 2.0% and 0.1%
respectively.
Net finance income/costs
Net finance income/costs is comprised of finance income of
GBP50,000 (2016 H1: GBP57,000) representing interest received on
cash balances and finance costs of GBP50,000 (2016 H1: GBP55,000)
resulting from facility costs.
Profit before tax
Profit before tax for the six months was 26.6% higher at GBP11.4
million (2016 H1: GBP9.0 million).
Taxation
The Group's effective rate of tax for the six months was 20.2%
(2016 H1: 18.6%). 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. However, due to its sustained
growth, the Group no longer qualifies for SME R&D relief and
instead accesses the large company R&D scheme, which is less
beneficial and impacts the Group's effective tax rate by
approximately 2%, in comparison to 2016. The Group expects its
anticipated effective tax rate to be approaching 21% for the full
year ending 31 December 2017.
Profit after tax and earnings per share
Adjusted profit after tax increased by 17.7% to GBP9.2 million
(2016 H1: GBP7.8 million), resulting in a 16.8% increase in
adjusted basic earnings per share to 4.37p (2016 H1: 3.74p) and a
16.9% increase in adjusted diluted earnings per share to 4.31p
(2016 H1: 3.68p).
Profit after tax increased 24.2% to GBP9.1 million (2016 H1:
GBP7.3 million), resulting in a 23.3% increase in basic earnings
per share to 4.32p (2016 H1: 3.51p) and a 23.3% increase in diluted
earnings per share to 4.26p (2016 H1: 3.46p).
Dividend per share
The Board intends to pay an interim dividend of 0.35p per share
on 27 October 2017 to shareholders on the register on 29 September
2017. This is an increase of 17% compared with the first half of
2016.
Cash Flow and Balance Sheet
Table 3 summarises the Group cash flows.
Table 3 Six months Six months
ended ended
30 June 30 June
2017 2016
Cash Flow GBP'000 GBP'000
--------------------------------- --------------------------------------------------------------- -------------
Adjusted operating profit
(Table 1) 11,506 9,497
Non-cash items 1,970 1,993
Adjusted EBITDA(9) 13,476 11,490
Working capital movement (4,416) (1,730)
Operating cash flow before
exceptional items 9,060 9,760
Exceptional items - (361)
Operating cash flow after
exceptional items 9,060 9,399
Capital expenditure and
capitalised R&D (2,236) (1,265)
Net interest income - 1
Tax (2,048) (933)
Free cash flow 4,776 7,202
Dividends paid (1,307) (1,150)
Proceeds from share issues 555 416
Exchange gains 11 430
Net increase in cash and
cash equivalents 4,035 6,898
--------------------------------- -------------------------------------------------------------- -----------
9 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
GBP9.1 million (2016 H1: GBP9.8 million) and a conversion of
adjusted operating profit into free cash flow of 42% (2016 H1:
76%). The reduction in cash conversion was due to increased trade
debtors, capital expenditure and capitalised R&D and increased
tax payments, resulting from historical tax losses being fully
utilised.
Working capital increased by GBP4.4 million. Within this, trade
receivables increased by GBP4.2 million due to timing of sales and
the effect of translating balances denominated in Euros and US
dollars with debtor days at 53 (2016 H1: 49 days). Inventory
decreased by GBP0.4 million in the first six months with months of
supply being 4.1 (2016 H1: 4.4 months). Trade payables decreased
GBP0.6 million, excluding the fair value of forward foreign
exchange contracts.
We have invested GBP2.3 million in fixed assets, software and
capitalised R&D in the first six months (2016 H1: GBP1.3
million), including our Etten Leur converting capability, Nuremberg
packing capacity and the Germany ERP project. GBP0.4 million of
R&D spend was capitalised in the period (2016 H1: GBP0.1
million).
Net taxation of GBP2.0 million was paid which is in line with
the Group's profitability within the tax jurisdictions in which it
operates, now that historical tax losses have been fully utilised
within the trading businesses.
The Group paid its final dividend for the year ended 31 December
2016 of GBP1.3 million on 16 June 2017 (2016 H1: GBP1.2
million).
The Group had a free cash flow as defined in Table 3 of GBP4.8
million in the period (2016 H1: GBP7.2 million), with a net
increase in cash equivalents of GBP4.0 million (2016 H1: GBP6.9
million increase).
At the end of the period, the Group had net cash(10) of GBP55.2
million (2016 H1: net cash(10) of GBP41.1 million).
The Group has a five-year, GBP30 million, multi-currency,
revolving credit facility, obtained in December 2014, with an
accordion option under which AMS can request up to an additional
GBP20 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 2017 is
reconciled in Table 4 below:
Table 4
Movement in net cash(10) GBP'000
-------------------------- -------------------------------------------------------------
Net cash as at 1 January
2017 51,125
Exchange rate impacts 11
Free cash flow 4,776
Dividends paid (1,307)
Proceeds from share
issues 555
Net cash as at 30
June 2017 55,160
-------------------------- ---------------------------------------------------------------
10 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 12
and the Group had no borrowings in the period.
Financial Summary
The Group has delivered another good set of results in the
period and we are confident of meeting Board expectations for the
full year. We remain focused on capitalising on our strong
financial and strategic position.
CONDENSED CONSOLIDATED INCOME STATEMENT for the six months ended
30 June 2017
(Unaudited) (Unaudited) (Audited)
Six months ended Six months ended Year ended 31 December
30 June 2017 30 June 2016 2016
Before Exceptional Before Exceptional Before Exceptional
exceptional items exceptional Items exceptional items
items (see Total items (see Total Items (see Total
note note note
7) 7) 7)
Note GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
---------------- ----- ------------ ------------ --------- ------------ ------------ --------- ------------ ------------ ---------
Revenue from
continuing
operations 5 45,910 - 45,910 39,153 - 39,153 82,621 - 82,621
Cost of sales (18,432) - (18,432) (16,680) - (16,680) (35,194) - (35,194)
---------------- ----- ------------ ------------ --------- ------------ ------------ --------- ------------ ------------ ---------
Gross profit 27,478 - 27,478 22,473 - 22,473 47,427 - 47,427
Distribution
costs (534) - (534) (512) - (512) (1,047) - (1,047)
Administration
costs (15,805) - (15,805) (13,001) (361) (13,362) (27,535) (361) (27,896)
Other income 273 - 273 415 - 415 621 - 621
Profit/(loss)
from
operations 11,412 - 11,412 9,375 (361) 9,014 19,466 (361) 19,105
Finance income 50 - 50 57 - 57 108 - 108
Finance costs (50) - (50) (55) - (55) (111) - (111)
---------------- ----- ------------ ------------ --------- ------------ ------------ --------- ------------ ------------ ---------
Profit/(loss)
before
taxation 11,412 - 11,412 9,377 (361) 9,016 19,463 (361) 19,102
Income tax 8 (2,301) - (2,301) (1,680) - (1,680) (3,410) - (3,410)
---------------- ----- ------------ ------------ --------- ------------ ------------ --------- ------------ ------------ ---------
Profit/(loss)
for
the period
attributable
to equity
holders
of the parent 9,111 - 9,111 7,697 (361) 7,336 16,053 (361) 15,692
---------------- ----- ------------ ------------ --------- ------------ ------------ --------- ------------ ------------ ---------
Earnings per
share
Basic 4 4.32p - 4.32p 3.68p (0.17p) 3.51p 7.65p (0.17p) 7.48p
Diluted 4 4.26p - 4.26p 3.63p (0.17p) 3.46p 7.55p (0.17p) 7.38p
Adjusted(11)
diluted 4 4.31p - 4.31p 3.68p (0.17p) 3.68p 7.66p (0.17p) 7.49p
---------------- ----- ------------ ------------ --------- ------------ ------------ --------- ------------ ------------ ---------
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
(Unaudited) (Unaudited) (Audited)
Six months ended Six months ended Year ended 31 December
30 June 2017 30 June 2016 2016
GBP'000 GBP'000 GBP'000
----------------------------- ----------------- ----------------- -----------------------
Profit for the period 9,111 7,336 15,692
Items that will potentially
be classified subsequently
to profit and loss
Exchange differences
on translation of foreign
operations 1,548 6,560 8,851
Gain/(loss) arising
on cash flow hedges 2,556 (2,419) (3,009)
------------------------------ ----------------- ----------------- -----------------------
Other comprehensive
income for the period 4,104 4,141 5,842
------------------------------ ----------------- ----------------- -----------------------
Total comprehensive
income for the period
attributable to equity
holders of the parent 13,215 11,477 21,534
------------------------------ ----------------- ----------------- -----------------------
(11) Adjusted for exceptional items and for amortisation of
acquired intangible assets
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
(Unaudited) (Unaudited) (Audited)
30 June 30 June 31 December
2017 2016 2016
GBP'000 GBP'000 GBP'000
Assets
Non-current assets
Acquired intellectual
property rights 9,629 9,264 9,468
Software intangibles 2,730 1,966 2,500
Development costs 1,747 1,777 1,645
Goodwill 41,430 38,940 40,337
Property, plant and
equipment 16,951 16,538 16,177
Trade and other receivables 13 10 10
----------------------------- ------------ ------------ ------------
72,500 68,495 70,137
Current assets
Inventories 11,182 10,465 11,440
Trade and other receivables 16,712 13,074 11,872
Current tax assets 461 8 432
Cash and cash equivalents 55,160 41,099 51,125
----------------------------- ------------ ------------ ------------
83,515 64,646 74,869
----------------------------- ------------ ------------ ------------
Total assets 156,015 133,141 145,006
----------------------------- ------------ ------------ ------------
Liabilities
Current liabilities
Trade and other payables 11,461 12,089 12,901
Current tax liabilities 2,356 1,420 2,049
Other taxes payable 103 302 85
Obligations under finance - 1 -
leases
13,920 13,812 15,035
Non-current liabilities
Trade and other payables 341 1,473 1,291
Deferred tax liabilities 2,748 2,783 3,152
3,089 4,256 4,443
----------------------------- ------------ ------------ ------------
Total liabilities 17,009 18,068 19,478
----------------------------- ------------ ------------ ------------
Net assets 139,006 115,073 125,528
----------------------------- ------------ ------------ ------------
Equity
Share capital 10,606 10,499 10,524
Share premium 34,478 33,578 34,005
Share-based payments
reserve 4,082 2,945 3,469
Investment in own shares (152) (152) (152)
Share-based payments
deferred tax reserve 861 404 459
Other reserve 1,531 1,531 1,531
Hedging reserve (978) (2,944) (3,534)
Translation reserve 2,184 (1,655) 636
Retained earnings 86,394 70,867 78,590
----------------------------- ------------ ------------ ------------
Equity attributable
to equity holders of
the parent 139,006 115,073 125,528
----------------------------- ------------ ------------ ------------
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 reserve reserve reserve earnings Total
tax
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'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 reserve reserve reserve earnings Total
tax
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------- -------- -------- --------- ----------- ------------ -------- -------- ------------ --------- --------
At 1 January
2016
(audited) 10,451 33,196 2,253 (152) 437 1,531 (525) (8,215) 64,681 103,657
--------------- -------- -------- --------- ----------- ------------ -------- -------- ------------ --------- --------
Consolidated
profit for
the
period to 30
June 2016 - - - - - - - - 7,336 7,336
Other
comprehensive
income - - - - - - (2,419) 6,560 - 4,141
--------------- -------- -------- --------- ----------- ------------ -------- -------- ------------ --------- --------
Total
comprehensive
income - - - - - - (2,419) 6,560 7,336 11,477
Share-based
payments - - 693 - (33) - - - - 660
Share options
exercised 48 382 (1) - - - - - - 429
Shares
purchased
by EBT - - - (449) - - - - - (449)
Shares sold by
EBT - - - 449 - - - - - 449
Dividends paid - - - - - - - - (1,150) (1,150)
--------------- -------- -------- --------- ----------- ------------ -------- -------- ------------ --------- --------
At 30 June
2016
(unaudited) 10,499 33,578 2,945 (152) 404 1,531 (2,944) (1,655) 70,867 115,073
--------------- -------- -------- --------- ----------- ------------ -------- -------- ------------ --------- --------
Share- Investment Share-based
Share Share based in own payments Other Hedging Translation Retained
capital premium payments shares deferred reserve reserve reserve earnings Total
tax
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------- -------- -------- --------- ----------- ------------ -------- -------- ------------ --------- --------
At 1 January
2016
(audited) 10,451 33,196 2,253 (152) 437 1,531 (525) (8,215) 64,681 103,657
--------------- -------- -------- --------- ----------- ------------ -------- -------- ------------ --------- --------
Consolidated
profit for
the
year to 31
December
2016 - - - - - - - - 15,692 15,692
Other
comprehensive
income - - - - - - (3,009) 8,851 - 5,842
--------------- -------- -------- --------- ----------- ------------ -------- -------- ------------ --------- --------
Total
comprehensive
income - - - - - - (3,009) 8,851 15,692 21,534
Share-based
payments - - 1,230 - 22 - - - - 1,252
Share options
exercised 73 809 (14) - - - - - - 868
Shares
purchased
by EBT - - - (449) - - - - - (449)
Shares sold by
EBT - - - 449 - - - - - 449
Dividends paid - - - - - - - - (1,783) (1,783)
--------------- -------- -------- --------- ----------- ------------ -------- -------- ------------ --------- --------
At 31 December
2016
(audited) 10,524 34,005 3,469 (152) 459 1,531 (3,534) 636 78,590 125,528
--------------- -------- -------- --------- ----------- ------------ -------- -------- ------------ --------- --------
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited) (Unaudited) (Audited)
Six months Six months
ended ended Year ended
30 June 30 June 31 December
2017 2016 2016
GBP'000 GBP'000 GBP'000
---------------------------------------------- ------------ ------------ ------------
Cash flows from operating
activities
Profit from operations 11,412 9,014 19,105
Adjustments for:
Depreciation 1,012 924 1,898
Amortisation - intellectual
property rights 94 122 242
- development costs 208 203 329
- software intangibles 137 173 441
Impairment of development
costs - - 125
Decrease/(increase) in
inventories 362 (1,147) (2,005)
Increase in trade and
other receivables (4,205) (1,962) (674)
(Decrease)/increase in
trade and other payables (573) 1,379 1,199
Share-based payments expense 613 693 1,230
Taxation (2,048) (933) (2,065)
Net cash inflow from operating
activities 7,012 8,466 19,825
---------------------------------------------- ------------ ------------ ------------
Cash flows from investing
activities
Purchase of software (622) (125) (795)
Capitalised research and
development (371) (149) (259)
Purchases of property,
plant and equipment (1,278) (1,016) (1,523)
Disposal of property,
plant and equipment 35 25 41
Interest received 50 57 109
Net cash used in investing
activities (2,186) (1,208) (2,427)
---------------------------------------------- ------------ ------------ ------------
Cash flows from financing
activities
Dividends paid (1,307) (1,150) (1,783)
Finance lease - (1) (1)
Issue of equity shares 555 416 868
Shares purchased by EBT (484) (449) (449)
Shares sold by EBT 484 449 449
Interest paid (50) (55) (111)
Net cash used in financing
activities (802) (790) (1,027)
---------------------------------------------- ------------ ------------ ------------
Net increase in cash and
cash equivalents 4,024 6,468 16,371
Cash and cash equivalents
at the beginning of the
period 51,125 34,201 34,201
Effect of foreign exchange
rate changes 11 430 553
Cash and cash equivalents
at the end of the period 55,160 41,099 51,125
---------------------------------------------- ------------ ------------ ------------
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
2016 comprise the Company and its subsidiaries (together referred
to as the "Group").
The Group is primarily involved in the design, development and
manufacture of novel high performance polymers (both natural and
synthetic) for use in advanced woundcare dressings and materials,
medical adhesives for closing and sealing tissue, and sutures and
haemostats for sale into the global medical device market.
2. Basis of preparation
The information for the year ended 31 December 2016 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.
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 2016. 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 30 June 31 December
2017 2016 2016
GBP'000 GBP'000 GBP'000
-------------------------------- ------------ ------------ ------------
Earnings
Earnings for the purposes
of basic and diluted
earnings per share
being net profit attributable
to equity holders of
the parent 9,111 7,336 15,692
Number of shares '000 '000 '000
-------------------------------- ------------ ------------ ------------
Weighted average number
of ordinary shares
for the purposes of
basic earnings per
share 210,838 209,271 209,815
-------------------------------- ------------ ------------ ------------
Effect of dilutive
potential ordinary
shares: share options,
deferred share bonus,
LTIPs 2,942 3,006 2,778
-------------------------------- ------------ ------------ ------------
Weighted average number
of ordinary shares
for the purposes of
diluted earnings per
share 213,780 212,277 212,593
-------------------------------- ------------ ------------ ------------
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 30 June 31 December
2017 2016 2016
GBP'000 GBP'000 GBP'000
-------------------------------- ------------ ------------ ------------
Earnings
Earnings for the purposes
of basic and diluted
earnings per share
being net profit attributable
to equity holders of
the parent 9,111 7,336 15,692
Exceptional items - 361 361
Amortisation of acquired
intangible assets 94 122 242
Earnings excluding
exceptional items and
amortisation of acquired
intangible assets 9,205 7,819 16,295
-------------------------------- ------------ ------------ ------------
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 30 June 31 December
2017 2016 2016
pence pence pence
---------------------- ------------ ------------ ------------
Adjusted basic EPS 4.37p 3.74p 7.77p
Adjusted diluted EPS 4.31p 3.68p 7.66p
---------------------- ------------ ------------ ------------
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.
(Prior year comparators have been re-presented following the
Business Unit restructure).:
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 2017 Branded OEM Consolidated
(unaudited) GBP'000 GBP'000 GBP'000
------------------------ -------- -------- -------------
Revenue 27,342 18,568 45,910
------------------------ -------- -------- -------------
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
------------------------ -------- -------- -------------
5. Segment information (continued)
At 30 June 2017
(unaudited) Branded OEM Consolidated
Other information GBP'000 GBP'000 GBP'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 6,857 17,010
-------------------------------- -------- -------- -------------
Consolidated total liabilities 17,009
-------------------------------- -------- -------- -------------
Re-presented six months ended
30 June 2016 Branded OEM Consolidated
(unaudited) GBP'000 GBP'000 GBP'000
------------------------------- -------- -------- -------------
Revenue 21,622 17,531 39,153
------------------------------- -------- -------- -------------
Result
------------------------------- -------- -------- -------------
Segment result 6,134 3,524 9,658
Unallocated expenses (644)
-------------
Profit from operations 9,014
Finance income 57
Finance costs (55)
------------------------------- -------- -------- -------------
Profit before tax 9,016
Tax (1,680)
------------------------------- -------- -------- -------------
Profit for the period 7,336
------------------------------- -------- -------- -------------
At 30 June 2016 (re-presented)
(unaudited) Branded OEM Consolidated
Other information GBP'000 GBP'000 GBP'000
-------------------------------- -------- -------- -------------
Capital additions:
Software intangibles 27 98 125
Development 97 52 149
Property, plant and equipment 708 283 991
Depreciation and amortisation (609) (813) (1,422)
-------------------------------- -------- -------- -------------
Balance sheet
Assets
Segment assets 88,520 44,407 132,927
Unallocated assets 214
-------------------------------- -------- --------
Consolidated total assets 133,141
-------------------------------- -------- -------- -------------
Liabilities
Segment liabilities 10,425 7,643 18,068
-------------------------------- -------- -------- -------------
Consolidated total liabilities 18,068
-------------------------------- -------- -------- -------------
5. Segment information (continued)
Year ended
31 December 2016 (re-presented) Branded OEM Consolidated
(audited) GBP'000 GBP'000 GBP'000
---------------------------------- ---------- ---------------- --------------
Revenue 45,306 37,315 82,621
---------------------------------- ---------- ---------------- --------------
Result
---------------------------------- ---------- ---------------- --------------
Segment result 11,313 8,677 19,990
Unallocated expenses (885)
--------------
Profit from operations 19,105
Finance income 108
Finance costs (111)
---------------------------------- ---------- ---------------- --------------
Profit before tax 19,102
Tax (3,410)
---------------------------------- ---------- ---------------- --------------
Profit for the year 15,692
---------------------------------- ---------- ---------------- --------------
At 31 December 2016
(audited) (re-presented) Branded OEM Consolidated
Other Information GBP'000 GBP'000 GBP'000
---------------------------------- ---------- ---------------- --------------
Capital additions:
Software intangibles 596 199 795
Development 157 102 259
Property, plant and equipment 1,105 418 1,523
Depreciation and amortisation (1,309) (1,600) (2,909)
---------------------------------- ---------- ---------------- --------------
Balance sheet
Assets 97,498 47,388 144,886
Segment assets
Unallocated assets 120
---------------------------------- ---------- ---------------- --------------
Consolidated total assets 145,006
---------------------------------- ---------- ---------------- --------------
Liabilities
Segment liabilities 12,020 7,458 19,478
---------------------------------- ---------- ---------------- --------------
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 2017 30 June 2016 31 December 2016
GBP'000 GBP'000 GBP'000
--------------------------------------------- ----------------- ----------------- -----------------
United Kingdom 7,650 8,926 17,457
Germany 9,853 8,421 18,345
Europe excluding United Kingdom and Germany 11,358 10,481 21,360
United States of America 16,082 10,660 23,505
Rest of World 967 665 1,954
--------------------------------------------- ----------------- ----------------- -----------------
45,910 39,153 82,621
--------------------------------------------- ----------------- ----------------- -----------------
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 2017 30 June 2016 31 December 2016
GBP'000 GBP'000 GBP'000
--------------------------------------------- ----------------- ----------------- -----------------
United Kingdom 89,352 72,559 80,580
Germany 61,904 56,768 59,950
Europe excluding United Kingdom and Germany 4,197 3,597 3,962
United States of America 562 217 514
--------------------------------------------- ----------------- ----------------- -----------------
156,015 133,141 145,006
--------------------------------------------- ----------------- ----------------- -----------------
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 2017. 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 Contract value Fair value
30 June 31 Dec 30 June 31 Dec 30 June 31 Dec 2016 30 June 31 Dec 2016
2017 2016 2017 2016 2017 2017
USD:GBP1 USD:GBP1 USD'000 USD'000 GBP'000 GBP'000 GBP'000 GBP'000
Cash flow
hedges
Sell US
dollars
Less than 3
months 1.405 1.467 5,750 5,250 4,091 3,579 (332) (673)
3 to 6
months 1.382 1.421 6,750 5,250 4,883 3,696 (296) (548)
7 to 12
months 1.317 1.423 23,700 10,500 17,990 7,377 (58) (1,079)
Over 12
months 1.301 1.319 2,000 22,200 1,537 16,829 19 (857)
------------ ----------- ----------- ----------- ----------- ----------- ------------ ----------- ------------
38,200 43,200 28,501 31,481 (667) (3,157)
------------ ----------- ----------- ----------- ----------- ----------- ------------ ----------- ------------
Ave. exchange rate Foreign currency Contract value Fair value
30 June 31 Dec 30 June 31 Dec 30 June 31 Dec 30 June 31 Dec
2017 2016 2017 2016 2017 2016 2017 2016
EUR:GBP1 EUR:GBP1 EUR'000 EUR'000 GBP'000 GBP'000 GBP'000 GBP'000
Cash flow hedges
Sell Euros
Less than 3
months 1.254 1.290 1,150 1,050 917 814 (96) (85)
3 to 6 months 1.237 1.263 1,350 1,250 1,092 990 (100) (73)
7 to 12 months 1.232 1.245 1,350 2,500 1,096 2,009 (100) (146)
Over 12 months 1.137 1.192 2,550 2,400 2,244 2,013 (24) (72)
----------------- ----------- ---------- ----------- ----------- -----------
6,400 7,200 5,349 5,826 (320) (376)
----------------- ---------- ----------- ---------- ----------- ---------- ----------- ----------- -----------
7. Exceptional items
During the six months ended 30 June 2017, the Group incurred
exceptional items of GBPnil (2016 H1: GBP361,000, for an aborted
acquisition).
8. Taxation
The weighted average tax rate for the Group for the six month
period ended 30 June 2017 was 21.35% (six months ended 30 June
2016: 22.5%, year ended 31 December 2016: 22.11%). The effective
rate of current tax for the six months ended 30 June 2017 was 20.2%
(six months ended 30 June 2016: 18.6%, year ended 31 December 2016:
17.9%) after the application of patent box and research and
development tax relief, with some off-set for disallowable
expenditure.
9. Dividends
(Unaudited) (Unaudited) (Audited)
Six months ended Six months ended Year ended
30 June 2017 30 June 2016 31 December 2016
Amounts recognised as distributions to equity holders in the
period:
Final dividend for the year ended 31 December 2015 of 0.55p
per ordinary share - 1,150 1,150
Interim dividend for the year ended 31 December 2016 of
0.30p per ordinary share - - 633
Final dividend for the year ended 31 December 2016 of 0.62p 1,307 - -
per ordinary share
----------------- ----------------- -----------------
1,307 1,150 1,783
10. Contingent liabilities
The Directors are not aware of any contingent liabilities faced
by the Group as at 30 June 2017 (30 June 2016: GBPnil, 31 December
2016: GBPnil).
11. Share capital
Share capital as at 30 June 2017 amounted to GBP10,606,000 (30
June 2016: GBP10,499,000, 31 December 2016: GBP10,524,000). During
the period the Group issued 1,643,393 shares in respect of
exercised share options, LTIPS and the Deferred Share Bonus
Scheme.
12. 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 2017 of GBP55.2 million and a
five-year, GBP30 million, multi-currency, revolving credit
facility, obtained in December 2014, with an accordion option under
which AMS can request up to an additional GBP20 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.
13. Principal risks and uncertainties
Further detail concerning the principal risks affecting the
business activities of the Group is detailed on pages 40 and 41 of
the Annual Report and Accounts for the year ended 31 December 2016.
There have been no significant changes since the last annual
report.
14. Seasonality of sales
There are no significant factors affecting the seasonality of
sales between the first and second half of the year.
15. Events after the balance sheet date
There has been no material event subsequent to the end of the
interim reporting period ended 30 June 2017.
16. 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 company news service from the London Stock Exchange
END
IR QLLFFDKFXBBK
(END) Dow Jones Newswires
September 13, 2017 02:00 ET (06:00 GMT)
Advanced Medical Solutions (LSE:AMS)
Historical Stock Chart
From Mar 2024 to Apr 2024
Advanced Medical Solutions (LSE:AMS)
Historical Stock Chart
From Apr 2023 to Apr 2024
