Advanced Medical Solutions (AMS) revealed the full extent of its first-half difficulties in the US, as “destocking, competitor activity and delayed product launches” brought the US sales of its LiquiBand skin adhesive range down by more than a quarter.
The specialist in wound-care products and surgical dressings first disclosed its problems with LiquiBand in a June trading update, advising that “some customers have not replenished the high inventories built for Brexit”. These issues are a cause for concern, as LiquiBand dominates AMS’s advanced closure section, which accounted for half of its core surgical business unit revenues over its first half. Advanced closure experienced revenue growth in UK/Germany and the rest of the world of 25 per cent and 46 per cent, respectively, over the period, but woes in the US dragged overall sales down by 10 per cent.
The overall effect on surgical business revenues was felt, as revenues contracted by 3 per cent. Management expects a return to US growth for LiquidBand in 2020, owing to an expanded product portfolio and “the stabilisation of customer inventories”.
House broker Investec forecasts full-year 2019 pre-tax profits and earnings per share of £27.9m and 10.2p, respectively, rising to £30.9m and 11.4p in 2020.
| ADVANCED MEDICAL SOLUTIONS (AMS) | ||||
| ORD PRICE: | 257p | MARKET VALUE: | £552m | |
| TOUCH: | 256-259p | 12-MONTH HIGH: | 357p | LOW: 249p |
| DIVIDEND YIELD: | 0.5% | PE RATIO: | 26 | |
| NET ASSET VALUE: | 85p* | NET CASH: | £63.9m | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2018 | 47.6 | 13.6 | 5.02 | 0.42 |
| 2019 | 48.7 | 11.2 | 4.10 | 0.50 |
| % change | +2 | -18 | -18 | +19 |
| Ex-div: | 26 Sep | |||
| Payment: | 25 Oct | |||
| *Includes intangible assets of £84m, or 39p a share | ||||
