Back in 2012, when Advanced Medical Solutions (AMS) failed to agree a distribution agreement in the US, many investors scarpered amid fears that it would become yet another British casualty through plans to expand in America. Since then, the medical devices specialist has reported compound annual revenue growth of 13 per cent, driven by the success of its own-brand products stateside.
In 2017, the US – now AMS’s largest geographical division – enjoyed a 47 per cent increase in sales, thanks largely to the success of its LiquiBand skin adhesives. The outlook for the division in 2018 is also attractive now that management has started the process of approving its hernia mesh product in the US and signed an original equipment manufacturer (OEM) deal with a US woundcare business.
But the outlook for Europe is less encouraging, particularly in the OEM division, where a number of the group’s partners have reported a slow-down in demand. OEM may have reported an 8 per cent increase in revenues at constant currencies, but if one-off royalty sales are excluded, like-for-like revenues would have been down.
Broker Numis expects EPS of 10.4p in the year to December 2018, from 9.4p in these numbers.
| ADVANCED MEDICAL SOLUTIONS (AMS) | ||||
| ORD PRICE: | 342p | MARKET VALUE: | £727m | |
| TOUCH: | 342-343p | 12-MONTH HIGH / LOW: | 351p | 233p |
| DIVIDEND YIELD: | 0.3% | PE RATIO: | 36 | |
| NET ASSET VALUE: | 72p* | NET CASH: | £62.5m | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2013 | 59.5 | 13.1 | 5.50 | 0.60 |
| 2014 | 63.0 | 15.2 | 6.20 | 0.70 |
| 2015 | 68.6 | 17.0 | 6.80 | 0.80 |
| 2016 | 83.2 | 19.1 | 7.48 | 0.92 |
| 2017 | 96.9 | 25.3 | 9.52 | 1.10 |
| % change | +16 | +32 | +27 | +20 |
| Ex-div: | 24 May | |||
| Payment: | 15 Jun | |||
| *Includes intangible assets of £41.8m, or 19.7p a share | ||||
