A raft of product launches and the acquisition of the Resorba late in 2011 meant a big jump in reported revenues for woundcare specialist Advanced Medical Solutions (AMS). However, the company will struggle to repeat that level of performance this year because of tougher comparisons, particularly as progress for its Liquiband wound sealant product in the key US hospital market is illusive.
The US distribution agreement for Liquiband with Cardinal Health has proved to be a disappointment, with Liquiband actually losing market share in US hospitals to already established products like Dermabond, made by Johnson & Johnson. Cardinal's failure to order minimum amounts of product means management can legally find a new distribution partner for Liquiband this year, though it is open to question whether the net result will be any different. Ultimately, AMS may find it necessary to open up its own US distribution business, as the sector is plagued by ineffective third party distribution agreements that can leave products gathering dust. Operationally, the European division did better, with key markets such as Germany seeing sales grow by 26.5 per cent to £13.9m. In addition, free cash flow almost tripled to £8.46m, which will allow the company to clear its debts ahead of schedule.
Investec forecasts pre-tax profits for 2013 of £13.2m, giving EPS of 5.3p (from £12.1m and 5.3p in 2012)
ADVANCED MEDICAL SOLUTIONS (AMS) | ||||
|---|---|---|---|---|
| ORD PRICE: | 72p | MARKET VALUE: | £147m | |
| TOUCH: | 70-72p | 12-MONTH HIGH: | 94p | LOW: 54p |
| DIVIDEND YIELD: | 0.7% | PE RATIO: | 16 | |
| NET ASSET VALUE: | 36p* | NET DEBT: | 7% | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2008 | 20.3 | 2.93 | 2.31 | nil |
| 2009 | 24.1 | 2.39 | 1.93 | nil |
| 2010 | 31.9 | 4.29 | 3.17 | 0.38 |
| 2011 | 34.3 | 4.59 | 3.10 | 0.45 |
| 2012 | 52.6 | 10.8 | 4.62 | 0.52 |
| % change | +53 | +135 | +49 | +16 |
Ex-div: 1 May Payment: 28 May *Includes intangible assets of £52m, or 25p a share | ||||
