Advanced Medical Solutions (AMS) has had to deal with flat sales and margin pressure in 2019, but the woundcare and surgical dressings specialist can point to regulatory progress and an expanded product offering, although any related benefits have yet to fully show through.
Financial performance was primarily hampered by shrinking sales of LiquiBand in the US, down a quarter at constant currencies, although partly mitigated by a contrasting increase in the smaller European and 'Rest of the World' market. Biosurgical and suture sales were also on the rise, while sales of antimicrobial dressings increased by 4 per cent to £21m. So even though sales of most product groupings were heading in the right direction, they were set against the reported £5.3m reversal in US LiquiBand sales.
More troublingly, the group reported a 180-basis point contraction in the adjusted operating margin to 26.4 per cent due to increased R&D costs, currency contracts and an unfavourable – lower-margin – sales mix.
The R&D spend has increased significantly as a proportion of sales, vindicated by news that the US Food & Drug Administration (FDA) has given approval for wound closure product LiquiBand Rapid. AMS has also broadened its product range through deals to acquire French surgical biomaterial maker Biomatlante and the alginate-based tissue adhesive specialist Sealantis.
| ADVANCED MEDICAL SOLUTIONS (AMS) | ||||
| ORD PRICE: | 245p | MARKET VALUE: | £ 527m | |
| TOUCH: | 245-246p | 12-MONTH HIGH: | 357p | LOW: 215p |
| DIVIDEND YIELD: | 0.6% | PE RATIO: | 28 | |
| NET ASSET VALUE: | 89p* | NET CASH: | £54.4m** | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 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 |
| 2018 | 103 | 28.3 | 10.55 | 1.32 |
| 2019 | 102 | 24.3 | 8.81 | 1.55 |
| % change | -0.2 | -14 | -16 | +17 |
| Ex-div: | 28 May | |||
| Payment: | 19 Jun | |||
| *Includes intangible assets of £81.9m, or 38p a share.**Netted against £9.7m in lease liabilities. | ||||
