Woundcare specialist Advanced Medical Solutions (AMS) used these results to apply a sticking plaster to investor sentiment after a profit warning in June sent the share price sharply lower. On the evidence of these results, AMS still has to overcome the lumpiness of its business-to-business sales, which provoked the warning in the first place; despite a better business mix causing underlying profits to almost double, AMS' core revenues were flat at £16m after the effects of the Resorba acquisition last December are stripped out. However, there is scope for optimism.
The company's advanced woundcare division was the source of most of the delays, with major customers not repeating orders for foam products. The de-stocking effect in silver alginate products came to an end this year, but sales to the US were 13 per cent lower due to timing issues. Despite these problems, divisional revenues were still 10 per cent higher at £14.4m.
In the wound closure and sealants business, revenues more than trebled to £10.4m on the back of Liquiband sales in the US and management estimates that Liquiband has so far grabbed about 6 per cent of the US hospital market for liquid sealants. And after the half-year end, Liquiband was taken up by a major US hospital group, plus five additional distributors.
Broker Peel Hunt forecasts pre-tax profits of £12.3m and EPS of 5p (2011:£6.4m and 4.2p).
ADVANCED MEDICAL SOLUTIONS (AMS) | ||||
|---|---|---|---|---|
| ORD PRICE: | 73p | MARKET VALUE: | £149m | |
| TOUCH: | 72-74p | 12-MONTH HIGH: | 96p | LOW: 63p |
| DIVIDEND YIELD: | 0.7% | PE RATIO: | 22 | |
| NET ASSET VALUE: | 33p* | NET DEBT: | 15% | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2011 | 16.2 | 2.61 | 1.72 | 0.145 |
| 2012 | 24.7 | 4.50 | 1.89 | 0.170 |
| % change | +52 | +72 | +10 | +15 |
Ex-div: 3 Oct Payment: 2 Nov *Includes intangible assets of £39m, or 19p a share | ||||
