REG - Adv Medical Solutns. - Unaudited Preliminary Results
RNS Number : 4848SAdvanced Medical Solutions Grp PLC17 March 2021
17 March 2021
Advanced Medical Solutions Group plc
("AMS" or the "Group")
Unaudited Preliminary Results for the year ended 31 December 2020
~ Robust financial and operational performance despite COVID-19 impacts; in line with current consensus forecasts; set for strong growth in 2021 and beyond ~
Winsford, UK: Advanced Medical Solutions Group plc (AIM: AMS), the surgical and advanced woundcare specialist company, today announces its unaudited preliminary results for the year ended 31 December 2020.
Financial Summary:
2020
2019
Reported change
Change at constant currency¹
Revenue (£ million)
86.8
102.4
-15%
-15%
Adjusted Measures
Adjusted² profit before tax (£ million)
13.4
26.6
-50%
Adjusted² profit before tax %
15.4%
26.0%
-10.6pp
Adjusted² diluted earnings per share (p)
5.44
9.83
-45%
Reported Measures
Profit before tax (£ million)
10.1
24.3
-58%
Profit before tax %
11.6%
23.7%
-12.1pp
Diluted earnings per share (p)
3.94
8.72
-55%
Net operating cash flow
21.5
21.7
-1%
Net cash (£ million)
53.8
64.8
-17%
Proposed full year dividend per share (p)
1.70p
1.55p
+10%
Operational Highlights (including post period end):
· Having prioritised employee safety, all manufacturing sites have remained in operation throughout the COVID-19 pandemic servicing customers and meeting order demand. Nonetheless, as previously announced, and in line with consensus market forecasts, on a Group level, sales and profitability were heavily impacted by COVID-19, as shown in the above table
· Given the Group's strong net cash position and reflecting the Board's confidence in the future, an increased full year dividend is proposed. In line with best practice, AMS repaid the £0.4 million of UK government furlough support that had been received during the year
· Approval and launch of LiquiBand® Rapid™, albeit at a restricted level due to current lack of access to surgeons. Successful completion of LiquiBand® XL clinical trials keeps us on track for approval and launch towards the end of 2021
· Investment in R&D increased to £7.9 million (2019: £6.5 million) as progress continued on all key projects across the Group
· US clinical trial to support the Premarket Approval (PMA) for LiquiBandFix8® progressed well with more than 65% of the total required patient procedures now complete. Filing for the device is expected in 2022, following the 12 month follow-up stipulated by the FDA
· Patient enrolment for the first human clinical study of Seal-G® and Seal-G® MIST began in February and CE mark extensions for the product are expected imminently giving AMS access to a new $1 billion addressable market with a differentiated product to fulfil a significant unmet need
· Acquisition of Raleigh Adhesive Coatings Limited ("Raleigh") in November 2020 for £22 million provides a strong strategic fit with commercial synergies and new commercial opportunities
· Grahame Cook was appointed as Non-Executive Director and joined the Audit, Nomination and Remuneration Committees in January; Steve Bellamy, who has been an AMS Board member since 2007, will retire from the Board at the AGM in June.
Commenting on the results Chris Meredith, Chief Executive Officer of AMS, said: "In what was a very challenging year for everyone, I am pleased with how the team and the business performed and the Group closed the year in line with current consensus forecasts. Despite the severe COVID-19 disruption, the Group remained profitable and generated strong operational cash flows, whilst continuing to invest in key projects and an increasing dividend with significant progress across many of the Group's key strategic initiatives. The progress made on LiquiBand® XL, Sealantis and the Fix8 PMA, as well as the acquisition of Raleigh will be catalysts for accelerated growth as elective surgery volumes recover.
Looking forward, the Group saw a continuing gradual recovery over the last two quarters of 2020 and 2021 has started well with a healthy order book in both Business Units.''
Notes
1. Constant currency removes the effect of currency movements by re-translating the current year's performance at the previous year's exchange rates
2. Adjusted profit before tax is shown before exceptional items which were £0.8 million (2019: £1.1 million), amortisation of acquired intangible assets which was £2.3 million (2019: £1.7 million) and change in fair value of long-term liability expense of £0.2 million (2019: credit of £0.3 million) as defined in the Financial Review. Adjusted operating margin is shown before exceptional items and amortisation of acquired intangible assets
3. Net cash is defined as cash and cash equivalents plus short term investments less bank loans and financial liabilities excluding those relating to IFRS16
- End -
For further information, please visit www.admedsol.com or contact:
Advanced Medical Solutions Group plc
Tel: +44 (0) 1606 545508
Chris Meredith, Chief Executive Officer
Eddie Johnson, Chief Financial Officer
Consilium Strategic Communications
Tel: +44 (0) 20 3709 5700
Mary-Jane Elliott / Matthew Neal / Olivia Manser
Investec Bank PLC (NOMAD & Broker)
Tel: +44 (0) 20 7597 5970
Daniel Adams / Patrick Robb / Gary Clarence
About Advanced Medical Solutions Group plc
AMS is a world-leading independent developer and manufacturer of innovative and technologically advanced products for the global surgical and woundcare markets, focused on quality outcomes for patients and value for payers. AMS has a wide range of surgical products including tissue adhesives, sutures, haemostats, and internal fixation devices, which it markets under its brands LiquiBand®, RESORBA®, and LiquiBandFix8®. AMS also supplies wound care dressings such as silver alginates, alginates and foams through its ActivHeal® brand as well as under white label. In 2019, the Group made two acquisitions: Sealantis, an Israeli medical device company with a patent-protected sealant technology platform; and Biomatlante, an established developer and manufacturer of innovative surgical biomaterial technologies based in France. In 2020, the Group acquired Raleigh Adhesive Coatings, a leading coater and converter of materials predominately for woundcare and bio-diagnostics products based in the UK.
AMS's products, manufactured in the UK, Germany, France, Israel, the Netherlands, and the Czech Republic, are sold globally via a network of multinational or regional partners and distributors, as well as via AMS's own direct sales forces in the UK, Germany, the Czech Republic and Russia. The Group has R&D innovation hubs in the UK, Germany, France and Israel. Established in 1991, the Group has more than 700 employees. For more information, please see www.admedsol.com
Chief Executive's Statement
COVID-19 impact
Having created a designated COVID-19 working group, prioritised safe working practices and complied with government measures on social distancing, all AMS sites have remained in operation throughout the pandemic and the Group has therefore been able to service the demand of its healthcare partners throughout 2020 while maintaining its robust balance sheet.
As part of this, AMS has:
· Enabled working from home arrangements for all roles that can do so;
· Implemented support processes for staff who have tested positive or have otherwise had to isolate;
· Set up a designated team to closely monitor and risk assess the impact of COVID-19 on operations and taken steps to establish safe working practices in all AMS sites;
· Undertaken a full evaluation of the supply chain to ensure any risks are identified and mitigated;
· Adjusted working patterns and put in place controls to minimise physical interactions and ensure social distancing;
· Maintained payment terms to support all of the Group's suppliers;
· Provided contractual order flexibility to customers whose demand has clearly been impacted by the COVID-19 downturn;
· Repaid the £0.4 million of UK job retention scheme support received relating to our employees who were unable to work during the year due to COVID-19 restrictions. Furloughed employees received full salary at the Group's cost;
· Maintained a strong year end net cash position of £53.8 million and proposed a 10% increase in full year dividend.
As is well known, COVID-19 restrictions have disrupted our global markets in 2020, with a resulting slowdown in surgical and wound treatment volumes. In addition, reduced access to hospitals has significantly restricted business development activities during the year. As COVID-19 vaccine programmes roll out in key markets, we await the reduction in infection rates and a gradual return to normalised levels of elective surgery across all of our markets.
Whilst it is expected that the short term impact of COVID-19 will dissipate, it is anticipated that long term behavioural impacts could provide AMS with new opportunities, such as increased 'direct to patient' supply of products.
Product portfolio progress opening up new markets
Driven by favourable global healthcare and demographic trends, global surgical and advanced woundcare markets are expected to grow in the medium to long term providing ongoing growth potential for AMS. In addition, the key R&D and regulatory projects in the Group's pipeline will significantly increase the size of the market that is addressable by our products.
LiquiBand® range
Following the successful clinical trials for LiquiBand® XL the Group expects to obtain 510(k) approval in H2 2021 which will allow entry in to the growing $50 million large wound closure market towards the end of 2021. This product launch has the added benefit of unlocking further growth potential in the base LiquiBand® business.
The clinical trial for the LiquiBand Fix8® US Pre-Market Approval process is progressing well and both trial results and surgeon feedback has been positive. It is expected that patient procedures will be complete in 2021 followed by FDA filing in 2022. US approval would be a significant milestone for the Group, being the first product of its type to enter the $250 million US hernia fixation market. This positive progress supports efforts to secure more specialist partners for LiquiBand Fix8® which is expected to drive much stronger growth for this category globally as elective surgery volumes recover.
Sealantis
The Sealantis clinical trial commencement in February and the extended product approvals expected imminently position AMS with a differentiated product to address the high unmet medical need for an effective internal sealant following bowel surgery. The planned Seal G range of products will allow the Group to enter the global $1 billion internal sealants market starting as planned in H1 2021 with a soft launch whilst further clinical evidence is built that will facilitate a full European launch in 2022.
Raleigh
The acquisition of Raleigh enhances the Group's woundcare capabilities and growth potential and enables entry into the bio-diagnostic testing sector for the first time, demonstrating the Group's strategy of utilising its strong financial position to acquire businesses with complementary products, exciting technologies and new routes to market.
Woundcare
AMS further increased its addressable market in woundcare with a number of product launches and approvals:
· The US launch of Silver Moisture Wicking Fabric provides access to the growing market for the management of skin folds and skin-on-skin friction;
· The US approval of the Debridement pad opens the market for wound bed preparation devices; and
· The CE mark approval of Silicone PHMB foam, which sits alongside the existing US approval, facilitates greater penetration of the antimicrobial foam market.
These new woundcare products enable the Group's partners to participate in new markets worth a total of $200 million.
AMS has also made significant R&D and regulatory progress in expanding the product indications for our Silver High Performance Dressing which positions the Group to obtain a full anti-microbial claim by the end of 2021. This important indication will unlock deeper penetration of the US antimicrobial gelling fibre market with a competitive product.
Acquisition strategy
The Group continues to seek acquisitions that deliver additional value for shareholders and meet the criteria of being accretive businesses with strong R&D and manufacturing capabilities, and that have products or customers that offer effective commercial synergies. The acquisition of Raleigh demonstrates a good fit with this strategy, and integration is progressing well. The Board remains optimistic about Raleigh's growth prospects, as well as the potential for significant cross-selling and cost saving synergies.
During the year, the Group incurred exceptional costs of £0.8 million relating to both the acquisition of Raleigh and its participation in a process, in which AMS was unsuccessful, for a sizeable surgical business.
Regulatory opportunities and progress
The Board is confident that the implementation of Medical Device Regulation (MDR) will provide opportunities for AMS due to anticipated competitor product withdrawals. The Group is making strong progress in its own MDR preparations having already secured additional time by extending the Group's existing MDD filings.
As a result of the COVID-19 pandemic, the deadline for Notified Bodies to review Medical Device Directive (MDD) certificates was extended by one year to May 2021, allowing AMS and other companies additional time to get new products approved or existing products reapproved under MDD. The end date, when all MDD certificates become invalid, remains as 26 May 2024.
AMS utilised the MDD extension to submit and obtain CE mark approval for Silicone PHMB foam and to file for extensions to the Sealantis CE mark.
In 2020, AMS successfully completed its final MDD recertifications so that all products now have extended MDD certificates allowing ample time for compliance with the new European Medical Devices Regulation by 2024. AMS is well prepared for the stricter requirements on product safety and performance, clinical evaluation and post-market clinical evidence stipulated by MDR and in the year submitted its first four MDR files for Notified Body review.
The senior management team's extensive preparations leave the Group well placed to exploit opportunities that will undoubtedly arise in the next few years during the implementation of MDR.
AMS obtained various product approvals for new territories in 2020 including the Group's first approvals in India for both LiquiBand® and LiquiBandFix8®.
Brexit
The Group's extensive preparations for Brexit enabled it to navigate the end of the transition period on 31 December 2020 with limited impact on the business. UK product certificates have been reassigned to BSI Netherlands, Advanced Medical Solutions BV has been appointed as the EU Authorised Representative for the Group's UK manufactured products and the other necessary administrative and labelling changes have been put in place. The Group now intends to unwind the increased stock levels that were built to mitigate possible Brexit delays.
In 2021, AMS is expected to experience a minimal level of Brexit related disruption in the following areas:
· Delays in port
· Increased freight costs including surcharges, paperwork and proof of origin declaration costs
· Further labelling changes such as for the additional UK CA mark to be phased in
· MDR importer requirements to be phased in
Stakeholders
On behalf of the Board, I would like to thank the Group's committed staff, partners and other stakeholders, without whose help and commitment, the achievements of this year would not have been possible.
Outlook
Despite the ongoing challenges posed by COVID-19 across the globe, the Group has seen a continuing gradual recovery across the business over recent quarters and 2021 has started well with a healthy order book in both Business Units.
Strong progress has been made in product development, regulatory approvals in new geographies and product indications, significantly increasing the size of the Group's addressable market in the near term including the approval of LiquiBand® Rapid™ and the successful clinical trials for LiquiBand® XL. On this basis the Group is set for strong organic growth in 2021 and beyond. AMS will continue to invest in R&D programmes and, in particular, in Sealantis, the LiquiBandFix8® PMA and Medical Device Regulation, which are expected to provide significant growth opportunities in the medium term.
The Board is committed to its strategy of building organic and acquisitive growth and is confident in both the short and long-term prospects for AMS.
Operational review
Group performance
Given that all products and regions were impacted by COVID-19 restrictions, the Group performed well and saw improving results in Q3 and Q4. However, as previously stated, Group revenue declined to £86.8 million (2019: £102.4 million) and the resulting adverse operating leverage led to adjusted profit before tax reducing to £13.4 million (2019: £26.6 million) and adjusted diluted earnings per share reducing to 5.4p (2019: 9.8p).
Surgical Business Unit
The Surgical Business Unit includes tissue adhesives, sutures, biosurgical devices and internal fixation devices marketed predominately under the AMS brands LiquiBand®, RESORBA® and LiquiBandFix8®. Business Unit revenue reduced by 11% to £50.2 million (2019: £56.5 million) due to sales volumes being adversely impacted by the effects of COVID-19.
Surgical Business Unit
2020
£'0002019
£'000Reported Growth
Change at constant currency
Advanced closure
22,751
30,085
-24%
-24%
Internal Fixation and Sealants
2,104
2,629
-20%
-20%
Traditional Closure
12,993
14,407
-10%
-9%
Biosurgical Devices
12,321
9,423
31%
30%
TOTAL
50,169
56,544
-11%
-11%
Advanced Closure
Advanced Closure comprises LiquiBand®, incorporating medical cyanoacrylate adhesives in purpose-built applicators used to close and protect topical wounds as well as surgical sealants sold under partners' brands.
Advanced Closure
2020
£'0002019
£'000Reported Growth
Change at constant currency
Americas
13,940
18,999
-27%
-26%
UK/Germany
4,955
6,850
-28%
-28%
ROW
3,856
4,236
-9%
-9%
TOTAL
22,751
30,085
-24%
-24%
Revenues decreased by 24% on a reported and constant currency basis to £22.8 million (2019: £30.1 million).
Following its approval and restricted launch in 2020, the commercial launch of LiquiBand® Rapid™ in 2021 will enable a key partner to regain ground with an improved product.
In addition, the planned 2021 launch of LiquiBand® XL will enable AMS to compete in the treatment of large wounds and unlock further growth potential in the LiquiBand® business. 510(k) approval is expected in H2 2021 following successful clinical trials in late 2020, with the product demonstrating very positive performance characteristics against the predicate device.
Whilst US procedural volumes remain depressed and hospital access limited, based on the above factors, US LiquiBand® is expected to deliver strong growth in 2021 and beyond.
AMS continues to obtain approvals for LiquiBand® in new geographies and notably obtained approval for LiquiBand® in India during the year. The Group is now in the process of screening and selecting the best go-to-market partner for its first commercial activity into this large market.
Internal Fixation and Sealants
This category comprises LiquiBandFix8® and Seal G®. LiquiBandFix8® is used to fix hernia meshes inside the body with accurately delivered individual drops of cyanoacrylate adhesive. Seal-G® is used to reinforce the staple / suture line to minimise anastomotic leaks following gastrointestinal bowel surgery.
LiquiBandFix8® revenue decreased by 20% to £2.1 million (2019: £2.6 million). Despite the restrictions, pleasing progress has been made in product training and new territory approvals. The sales teams delivered virtual symposia with prominent hernia societies attended by more than 8,000 surgeons to increase awareness of the reduced post-operative complications when using LiquiBandFix8® instead of staples or tacks. The Group also obtained approvals for LiquiBandFix8® in other geographies, notably in India and Brazil, with distributor selection and launch planning now in process.
The clinical trial for the Fix8® Pre-Market Approval process had to be suspended for approximately six months due to COVID-19 but has since regained momentum with over 65% of the total required patient procedures now complete. FDA approval is expected to be filed in 2022 upon completion of the 12 month follow-up stipulated by the FDA. AMS continues to be excited about the long-term prospects for the LiquiBandFix8® portfolio, with entry into the US being a significant milestone for the Group. Feedback from surgeons and hospital centres involved in the trial has been very encouraging to date.
During 2020, commercial research activity was completed with European Key Opinion Leaders which provided positive feedback on Seal-G & Seal-G MIST as solutions to the high unmet need for an effective GI sealant.
Post-period end, the Group progressed two major milestones towards the Sealantis soft launch in H1 2021 and full European commercial launch in 2022:
· Began patient enrolment for the first clinical study of Seal-G® & Seal-G MIST® in February 2021, following COVID-19 related delays in 2020
· Progressed CE mark extensions to final notified body review to strengthen the portfolio by obtaining approval for the laparoscopic Seal-G MIST® device and extending the open Seal-G® CE mark to include a blue colourant to aid visibility during surgery. Both approvals are expected imminently.
Traditional Closure
The Traditional Closure category comprises the RESORBA® branded Absorbable and Non-absorbable Suture ranges, which includes certain surgical specialties (such as dental and ophthalmic).
Revenue decreased by 10% at reported and 9% at constant currency to £13.0 million (2019: £14.4 million).
AMS expects to drive suture growth by focusing on specific opportunities such as targeted GPO promotions in the DACH region, increasing its US footprint, dental portfolio selling with Biomatlante and RESORBA® products and leveraging its Moorfields Eye Hospital site advocacy to grow the ophthalmic business.
The Group continues to look for ways to make its suture portfolio more comprehensive. In 2019, AMS added a long lasting synthetic PDO thread material, followed by the 2020 launch of a high tensile strength OT Cord range for orthopaedic and sports medicine. In 2021, a barbed suture range to provide knotless tissue security is expected to be launched.
Biosurgical Devices
The Biosurgical Devices category comprises RESORBA® and Biomatlante technologies including antibiotic loaded collagen sponges, collagen membranes and cones, synthetic bone substitutes and bio-absorbable screws.
Biosurgical revenue increased by 31% at reported and 30% at constant currency to £12.3 million (2019: £9.4 million) reflecting the inclusion of Biomatlante sales following its acquisition in November 2019. AMS expects to make significant progress selling Biomatlante products under the RESORBA® brand through the existing sales infrastructure and some initial sales have been made into Germany during the year. In addition, AMS is looking to sell more of its dental and orthopaedic collagens and sutures via the existing Biomatlante customer base.
In November 2020, the Group filed a 510(k) application for freeze dried bone substitute (FDBS) which would be the first US approval for any of Biomatlante's newer innovative products. The FDBS platform has strong cohesive properties when mixed with fluids, can be easily moulded for optimal surgical placement and will open up opportunities for the addition of active ingredients such as platelets, stem cells or synthetic peptides. AMS anticipates 510(k) approval in the next 12 months.
Collagen loaded with Vancomycin has been sold in Germany for several years on a named patient prescription only basis and we continue to progress a full CE mark to allow broader promotion and sales. AMS is currently progressing with an MDD application but will move to proceed under MDR as necessary. The Group continues to work with both EU and US regulators on wider market approvals for its antibiotic loaded collagen pacemaker pouch, also currently sold via prescription in Germany.
Woundcare Business Unit
The Woundcare Business Unit is comprised of a multi-product portfolio of advanced woundcare dressings sold under partner brands and under the ActivHeal® brand, plus a portfolio of specialist medical bulk materials now including the multi-layer woundcare and bio-diagnostics products that came with the Raleigh acquisition.
Revenue decreased by 20% to £36.6 million (2019: £45.8 million) due to COVID-19 impacts on sales volumes.
Woundcare Business Unit
2020
£'0002019
£'000Reported Growth
Change at constant currency
Infection Management
15,289
20,555
-26%
-25%
Exudate Management
15,413
19,271
-20%
-20%
Other Woundcare
5,925
5,998
-1%
-1%
TOTAL
36,627
45,824
-20%
-20%
During 2020, AMS successfully obtained MDD extensions until 2024 for all the remaining products in its woundcare range. Consequently, the Group has secured the maximum time possible to complete compliance with the new MDR certification requirements. AMS has a dedicated team in place focused on completing the work for each product in good time to allow regular approvals across the next three years.
Despite the lower market growth rates and consolidation activity in the woundcare market, the Board is confident that the following catalysts position our woundcare business unit for good growth:
- The approval of several new products
- The addition of Raleigh
- ActivHeal® potential in select new markets
- The opportunities expected to arise from MDR
Infection Management
The infection management category comprises advanced woundcare dressings that incorporate antimicrobials such as Silver and Polyhexamethylene Biguanide (PHMB). Revenue decreased by 26% on a reported basis and 25% on a constant currency basis to £15.3 million (2019: £20.6 million) predominantly due to COVID-19 impacts.
During the year, the Group's Silver Moisture Wicking Fabric product was launched with two US partners and Silver High-Performance Dressings were launched with a second US partner. Volumes were impacted by COVID-19 restrictions, which limited access to potential customers and promotional opportunities.
In November 2020, AMS obtained CE mark approval for the Silicone PHMB foam range which sits alongside the US approval for this product which was granted in late 2019. The silicone variant of the Group's PHMB range provides gentle but secure adhesion in addition to existing performance characteristics such as rapid microbial activity and eradication of pathogens. This provides AMS with a strong product for the growing antimicrobial foam market.
During 2020, AMS completed the development of a debridement pad which clinicians use to prepare the wound bed and enhance wound healing. The Group successfully obtained approval for use in FDA markets and also progressed European approval by submitting the CE mark application.
Following progress made in 2020, the Group is now positioned to obtain a full anti-microbial claim for our Silver High Performance Dressing in 2021 which will unlock deeper penetration of the US antimicrobial gelling fibre market with a patent protected product that has excellent performance characteristics. We expect to submit the special 510(k) application in Q2 2021.
In December 2020, an exclusive five year agreement for one of the Group's silver alginates came up for renewal. Although discussions are on-going with the customer, the new terms the customer is seeking are not acceptable to AMS and therefore the contract may not be renewed. We are also assessing various other options to maximise the value to AMS for the next five years.
Looking ahead, the Group continues to work on developing next generation high-gelling products with differentiated anti-biofilm claims and an application of its surgical tissue scaffolds in a woundcare environment.
Exudate Management
Exudate management comprises advanced woundcare dressings and gels which do not incorporate any antimicrobial elements. Raleigh's results are reported within exudate management and provides significant growth opportunities. Revenue decreased by 20% to £15.4 million (2019: £19.3 million).
AMS has progressed the initiative to find and appoint new distribution partners for ActivHeal® in markets with strong demand for high quality, cost effective dressings and where current key partners have no or low presence. A number of ActivHeal® contracts were signed in 2020 and are expected to launch in 2021, contributing significant additional sales value over the next five years. Registrations are also being pursued in additional territories with a view to further exploiting this growth opportunity.
The acquisition of Raleigh in November 2020 significantly strengthens AMS's woundcare position by bringing acrylic and silicone coating and perforation in house, providing opportunities for cost savings and aiding product development. In addition, Raleigh's products and expertise will allow AMS to win new customers and enter into new markets such as the bio-diagnostic testing sector and brings an R&D pipeline of new projects in the medical space. AMS recorded £0.7 million of sales in 2020 relating to Raleigh.
With the heightened attention on the prevention of pressure ulcers in all major markets, it is pleasing to add a product in this indication to the existing US silicone foam range. It will enable all the Group's customers to promote the expanded range for this increasingly important patient concern.
Other Woundcare
Other Woundcare comprises royalties, fees and woundcare sealants. Revenue decreased by 1% on a reported and constant currency basis to £5.9 million (2019: £6.0 million) mainly due to a minor decrease in sealant revenue. Royalty and fee income, which includes the Group's licensing arrangement with Organogenesis, remained consistent.
Chris Meredith
Chief Executive Officer
Financial Review
Summary
Group revenue declined by 15% at reported and constant currency. Adjusted profit before tax reduced by 50% as investment in R&D and other key projects continued and the employee base was retained, resulting in adverse operating leverage.
To provide the clearest possible insight into performance, the Group uses alternative performance measures. These measures are not defined in International Financial Reporting Standards (IFRS) and, therefore, are considered to be non-GAAP (Generally Accepted Accounting Principles) measures. Accordingly, the relevant IFRS measures are also presented where appropriate. AMS uses such measures consistently at the half year and full year and reconcile them as appropriate. The measures used in this statement include constant currency revenue growth, adjusted operating margin, adjusted profit before tax, adjusted earnings per share and adjusted net cash inflow from operating activities, allowing the impacts of exchange rate volatility, exceptional items, amortisation and the change in fair value of long-term liability to be separately identified. Net cash is an additional non-GAAP measure used.
Excluding exceptional items, administration expenses reduced marginally to £33.7 million (2019: £34.6 million) inclusive of losses arising from foreign exchange movements as the Group implemented effective cost management although these were partially offset by higher amortisation of intangibles. The Group operated its factories at much lower volumes, resulting in under-absorption of its fixed costs and, to reflect the need for operational staff to continue attending Group sites during the lockdown period, additional one-off payments were made to these employees totalling £0.3 million. Furthermore, £0.4 million of UK job retention scheme support was repaid relating to our employees who were unable to work but still received their salary in full at the Group's cost.
The Group incurred £7.9 million of gross R&D spend in the period (2019: £6.5 million), representing 9.1% of sales (2019: 6.3%) reflecting increased investment in innovation and in meeting the increasing regulatory standards.
Exceptional items were £0.8 million in the year (2019: £1.1 million) relating to both the acquisition of Raleigh and our participation in a process, in which AMS was unsuccessful, for a sizeable surgical business.
Amortisation of acquired intangible assets was £2.3 million in 2020 (2019: £1.7 million) due to the full period effect of the acquisition of Sealantis in January 2019 and Biomatlante in November 2019.
A £0.2 million expense was recorded due to the change in the fair value of long-term liabilities recognised on acquisition of Sealantis in 2019 (2019: credit of £0.3 million).
Adjusted operating margin decreased by 1,050 bps to 15.9% (2019: 26.4%) and operating margin decreased by 1,130 bps to 12.4% (2019: 23.7%) predominately due to COVID-19 impacts.
Adjusted profit before tax decreased by 50% to £13.4 million (2019: £26.6 million) and profit before tax decreased by 58% to £10.1 million (2019: £24.3 million).
Reconciliation of profit before tax to adjusted profit before tax
(Unaudited)
Audited
2020
2019
£'000
£'000
Profit before tax
10,089
24,257
Amortisation of acquired intangibles
2,269
1,683
Change in fair value of long-term liability
167
(345)
Exceptional items
834
1,053
Adjusted profit before tax
13,359
26,648
The Group's effective tax rate, reflecting the blended tax rates in the countries where we operate and including UK patent box relief, decreased to 14.9% (2019: 21.8%). The decrease was due to patent box claims relating to the newly granted LiquiBand® Exceed patents which can be retrospectively claimed.
Adjusted diluted earnings per share decreased by 45% to 5.44p (2019: 9.83p) and diluted earnings per share decreased by 55% to 3.94p (2019: 8.72p).
Reflecting the Group's strong net cash position and confidence in the Group's prospects, the Board is proposing an increased final dividend of 1.20p per share, to be paid on 18 June 2021 to shareholders on the register at the close of business on 28 May 2021. This follows the interim dividend of 0.50p per share paid on 23 October 2020 and would, if approved, make a total dividend for the year of 1.70p per share (2019: 1.55p) an increase of 10%. In line with best practice, AMS repaid the £0.4 million of UK government furlough support that had been received during the year.
Operating result by business segment
Year ended 31 December 2020
Surgical
Woundcare
£'000
£'000
Revenue
50,169
36,627
Segment operating profit
6,962
5,220
Amortisation of acquired intangibles
2,132
137
Adjusted segment operating profit4
9,094
5,357
Adjusted operating margin4
18.1%
14.6%
Year ended 31 December 2019
Revenue
56,544
45,824
Segment operating profit
14,411
11,370
Amortisation of acquired intangibles
1,675
8
Adjusted segment operating profit4
16,086
11,378
Adjusted operating margin4
28.4%
24.8%
Note 4: Adjusted for exceptional items and amortisation of acquired intangible assets
Table is reconciled to statutory information in note 3 of the financial information.
Surgical
Surgical revenues decreased by 11% to £50.2 million (2019: £56.5 million) at both reported currency and constant currency. Adjusted operating margin decreased 1,030 bps to 18.1% (2019: 28.4%) as the Group was unable to offset costs in the same proportion to the decrease in revenue and as a result of increased investment in R&D, clinical and regulatory affairs.
Woundcare
Woundcare revenues decreased by 20% at both reported currency and constant currency to £36.6 million (2019: £45.8 million). Adjusted operating margin decreased by 1,020 bps to 14.6% (2019: 24.8%).
Currency
The Group hedges significant currency transaction exposure by using forward contracts, and aims to hedge approximately 80% of its estimated transactional exposure for the next 12 to 18 months. In the year, approximately one third of sales was invoiced in Euros and approximately one quarter was invoiced in US Dollars. The Group estimates that a 10% movement in the £:US$ or £:€ exchange rate will impact Sterling revenues by approximately 2.8% and 3.4% respectively and in the absence of any hedging this would have an impact on profit of 2.2% and 0.1%.
Cash flow
Despite the unprecedented conditions, the Group delivered a strong net cash inflow from operating activities of £21.5 million (2019: £21.7 million) with the reduction in operating profit being mostly offset by working capital management.
Reconciliation of Net cash inflow from operating activities to Adjusted net cash inflow from operating activities
(Unaudited)
(Audited)
Year ended
31 December 2020
Year ended 31 December 2019
£'000
£'000
Net cash inflow from operating activities
21,511
21,699
Add back exceptional items
613
1,053
Adjusted net cash inflow from operating activities
22,124
22,752
At the end of the period, following the acquisition of Raleigh for £22.0 million, the Group had net cash of £53.8 million (31 December 2019: £64.8 million).
Working capital decreased during the year, due to a decrease in receivables as a result of lower sales, partially offset by increased inventory levels and lower payables. Inventory cover was temporarily increased to 5.7 months of supply (2019: 5.1 months) in preparation for potential supply chain risks relating to COVID-19 and the end of the Brexit transition period. Debtor days decreased to 45 days (2019: 49 days) due to customer mix and Creditor days decreased to 30 days (2019: 34 days).
Capital investment in equipment, R&D and regulatory costs decreased slightly to £5.3 million (2019: £5.9 million).
Cash outflow relating to taxation decreased to £3.7 million (2019: £5.9 million) due to lower taxable profits, partially offset by the requirement to accelerate payments on account in the UK.
The Group paid its final dividend for the year ended 31 December 2019 of £2.3 million in June 2020 (2019: for the year ending 2018, £1.9 million in June 2019), and its interim dividend for the six months ended 30 June 2020 of £1.1 million in October 2020 (for the 6 months ended 30 June 2019: £1.1 million in October 2019).
The Group has an undrawn unsecured £80 million credit facility provided jointly by The Royal Bank of Scotland and HSBC which is in place until December 2023. This facility carries an annual interest rate of LIBOR or EURIBOR plus a margin that varies between 0.60% and 1.70% depending on the Group's net debt to EBITDA ratio.
CONDENSED CONSOLIDATED INCOME STATEMENT
Year ended 31 December
(Unaudited)
(Audited)
Before exceptional items
Exceptional items
2020
Before exceptional items
Exceptional items
2019
Note
£'000
£'000
£'000
£'000
£'000
£'000
Revenue from continuing operations
3
86,796
-
86,796
102,368
102,368
Cost of sales
(40,756)
-
(40,756)
(41,885)
-
(41,885)
Gross profit
46,040
-
46,040
60,483
-
60,483
Distribution costs
(1,071)
-
(1,071)
(997)
-
(997)
Administration costs
(33,658)
(834)
(34,492)
(34,566)
(1,053)
(35,619)
Other income
253
-
253
376
-
376
Profit from operations
4
11,564
(834)
10,730
25,296
(1,053)
24,243
Finance income
220
-
220
406
-
406
Finance costs
(861)
-
(861)
(392)
-
(392)
Profit before taxation
10,923
(834)
10,089
25,310
(1,053)
24,257
Income tax
5
(1,505)
-
(1,505)
(5,338)
-
(5,338)
Profit for the year attributable to equity holders of the parent
9,418
(834)
8,584
19,972
(1,053)
18,919
Earnings per share
Basic
6
4.38p
(0.39p)
3.99p
9.30p
(0.49p)
8.81p
Diluted
6
4.32p
(0.38p)
3.94p
9.21p
(0.49p)
8.72p
Adjusted diluted
6
5.44p
(0.38p)
5.06p
9.83p
(0.49p)
9.34p
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
(Unaudited)
(Audited)
2020
2019
£'000
£'000
Profit for the year
8,584
18,919
Exchange differences on translation of foreign operations
3,507
(3,538)
Gain arising on cash flow hedges
842
3,091
Deferred tax charge arising on cash flow hedges
(160)
(130)
Total other comprehensive income/(expense) for the year
4,189
(577)
Total comprehensive income for the year attributable to equity holders of the parent
12,773
18,342
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
(Unaudited)
(Audited)
31 December 2020
31 December 2019
£'000
£'000
Assets
Non-current assets
Acquired intellectual property rights
9,879
9,478
Technology based intangible assets
22,357
15,985
Software intangibles
2,437
2,832
Development costs
7,368
5,039
Goodwill
68,911
53,558
Property, plant and equipment
30,064
27,707
Deferred tax assets
-
96
Trade and other receivables
364
531
141,380
115,226
Current assets
Inventories
21,025
17,655
Trade and other receivables
21,107
29,221
Current tax assets
1,214
129
Cash and cash equivalents
53,829
64,751
97,175
111,756
Total assets
238,555
226,982
Liabilities
Current liabilities
Trade and other payables
13,139
14,043
Current tax liabilities
319
1,781
Lease liabilities
1,257
1,353
14,715
17,177
Non-current liabilities
Trade and other payables
3,229
3,150
Deferred tax liabilities
8,536
6,409
Lease liabilities
9,864
8,347
Borrowings
-
664
21,629
18,570
Total liabilities
36,344
35,747
Net assets
202,211
191,235
Equity
Share capital
10,769
10,745
Share premium
36,288
36,226
Share-based payments reserve
11,142
9,466
Investment in own shares
(162)
(159)
Share-based payments deferred tax reserve
430
649
Other reserve
1,531
1,531
Hedging reserve
1,237
555
Translation reserve
3,258
(249)
Retained earnings
137,718
132,471
Equity attributable to equity holders of the parent
202,211
191,235
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Attributable to equity holders of the Group
Share-
Investment
Share-based
Share
Share
based
in own
payments
Other
Hedging
Translation
Retained
capital
premium
payments
shares
deferred tax
reserve
reserve
reserve
earnings
Total
£'000
£'000
£'000
£'000
£'000
£'000
£'000
£'000
£'000
£'000
At 1 January 2019
10,674
35,192
7,333
(156)
708
1,531
(2,406)
3,289
116,560
172,725
Consolidated profit for the year to 31 December 2019
-
-
-
-
-
-
-
-
18,919
18,919
Other comprehensive
income/(expense)
-
-
-
-
-
-
2,961
(3,538)
-
(577)
Total comprehensive income
-
-
-
-
-
-
2,961
(3,538)
18,919
18,342
Share-based payments
-
-
1,856
-
(59)
-
-
-
-
1,797
Share options exercised
71
1,034
277
-
-
-
-
-
-
1,382
Shares purchased by EBT
-
-
-
(603)
-
-
-
-
-
(603)
Shares sold by EBT
-
-
-
600
-
-
-
-
-
600
Dividends paid
-
-
-
-
-
-
-
-
(3,008)
(3,008)
At 31 December 2019 (Audited)
10,745
36,226
9,466
(159)
649
1,531
555
(249)
132,471
191,235
Consolidated profit for the year to 31 December 2020
-
-
-
-
-
-
-
-
8,584
8,584
Other comprehensive income
-
-
-
-
-
-
682
3,507
-
4,189
Total comprehensive income
-
-
-
-
-
-
682
3,507
8,584
12,773
Share-based payments
-
-
1,611
-
(219)
-
-
-
-
1,392
Share options exercised
24
62
65
-
-
-
-
-
-
151
Shares purchased by EBT
-
-
-
(542)
-
-
-
-
-
(542)
Shares sold by EBT
-
-
-
539
-
-
-
-
-
539
Dividends paid
-
-
-
-
-
-
-
-
(3,337)
(3,337)
At 31 December 2020 (Unaudited)
10,769
36,288
11,142
(162)
430
1,531
1,237
3,258
137,718
202,211
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
(Audited)
Year ended
Year ended
31 December 2020
31 December 2019
Note
£'000
£'000
Cash flows from operating activities
Profit from operations
10,730
24,243
Adjustments for:
Depreciation
3,467
3,154
Amortisation - intellectual property rights
2,269
1,683
- software intangibles
563
519
- development costs
533
492
Increase in inventories
(1,892)
(2,454)
Decrease/(Increase) in trade and other receivables
10,262
(574)
Decrease in trade and other payables
(2,292)
(1,275)
Share-based payments expense
1,611
1,856
Taxation
(3,740)
(5,945)
Net cash inflow from operating activities
21,511
21,699
Cash flows from investing activities
Purchase of software
(126)
(826)
Capitalised research and development
(2,788)
(2,355)
Purchases of property, plant and equipment
(2,346)
(2,673)
Disposal of property, plant and equipment
136
4
Interest received
277
422
Acquisition of subsidiaries net of cash
7
(21,924)
(24,145)
Net cash used in investing activities
(26,771)
(29,573)
Cash flows from financing activities
Dividends paid
(3,337)
(3,008)
Repayment of principal under lease liabilities
(1,150)
(925)
Repayment of loan
(664)
-
Issue of equity shares
65
1,066
Shares purchased by EBT
(542)
(603)
Shares sold by EBT
539
600
Interest paid
(735)
(709)
Net cash used in financing activities
(5,824)
(3,579)
Net decrease in cash and cash equivalents
(11,084)
(11,453)
Cash and cash equivalents at the beginning of the year
64,751
76,391
Effect of foreign exchange rate changes
162
(187)
Cash and cash equivalents at the end of the year
53,829
64,751
Notes Forming Part of the Condensed Consolidated Financial Statements
1. Reporting entity
Advanced Medical Solutions Group plc ("the Company") is a public limited company incorporated and domiciled in England and Wales (registration number 2867684). The Company's registered address is Premier Park, 33 Road One, Winsford Industrial Estate, Cheshire, CW7 3RT.
The Company's ordinary shares are traded on the AIM market of the London Stock Exchange plc. The consolidated financial statements of the Company for the twelve months ended 31 December 2020 comprise the Company and its subsidiaries (together referred to as the "Group").
The Group is primarily involved in the design, development and manufacture of novel high-performance polymers (both natural and synthetic) for use in advanced woundcare dressings and materials, and medical adhesives and sutures for closing and sealing tissue, for sale into the global medical device market and dental market.
2. Basis of preparation
These condensed unaudited consolidated financial statements have been prepared in accordance with the accounting policies set out in the annual report for the year ended 31 December 2019 except for new standards adopted for the year.
In the current year the Group has applied a number of amendments to IFRSs issued by the IASB. Their adoption has not had a material impact on the disclosures or on the amounts reported in the Annual Financial Statements. The following amendments were applied:
· Amendments to References to the Conceptual Framework in IFRS Standards
· Definition of a Business (Amendments to IFRS 3)
· Definition of Material (amendments to IAS 1 and IAS 8)
· Interest Rate Benchmark Reform (Amendments to IFRS 9, IAS 39 and IFRS7)
· Conceptual Framework for Financial Reporting (Revised)
While the financial information included in this preliminary announcement has been prepared in accordance with the recognition and measurement criteria of International Financial Reporting Standards (IFRSs), this announcement does not itself contain sufficient information to comply with IFRSs. The Group expects to publish full financial statements that comply with IFRSs in April 2021.
The financial information set out in the announcement does not constitute the Group's statutory accounts for the years ended 31 December 2020 or 31 December 2019. The financial information for the year ended 31 December 2019 is derived from the statutory accounts for that year, which have been delivered to the Registrar of Companies. The auditor reported on those accounts; their report was unqualified, did not draw attention to any matters by way of emphasis without qualifying their report and did not contain a statement under s498 (2) or (3) Companies Act 2006. The audit of the statutory accounts for the year ended 31 December 2020 is not yet complete. These accounts will be finalised on the basis of the financial information presented by the Directors in this preliminary announcement and will be delivered to the Registrar of Companies following the Group's annual general meeting.
The financial statements have been prepared on the historical cost basis of accounting except as disclosed in the accounting policies set out in the annual report for the year ended 31 December 2019.
With regards to the Group's financial position, it had cash and cash equivalents at the 31 December 2020 of £53.8 million. In December 2018, the Group entered a five-year, unsecured, multi-currency, credit facility for £80 million and which was undrawn in 2020.
While the current economic environment is uncertain, the Group operates in markets whose demographics are favourable, underpinned by an increasing need for products to treat chronic and acute wounds. Consequently, market growth is predicted. The Group has a number of contracts with customers across different geographic regions and also with substantial financial resources, ranging from government agencies through to global healthcare companies. The Group has also considered the ongoing implications of COVID-19 and Brexit and developed appropriate risk management solutions to mitigate these risks.
Having taken the above into consideration and reviewed cash flow forecasts for the next 12 months, the Directors have reached the conclusion that the Group is well placed to manage its business risks in the current economic environment. Accordingly, they continue to adopt the going concern basis in preparing the preliminary announcement.
New accounting standards not yet applied
Certain new accounting standards and interpretations have been published that are not mandatory for 31 December 2020 reporting periods and have not been early adopted by the Group. These standards are not expected to have a material impact on the entity in the current or future reporting periods or on foreseeable future transactions.
3. Segment information
As referred to in the Chief Executive's Statement, the Group is organised into two Business Units: Surgical and Woundcare. These Business Units are the basis on which the Group reports its segment information.
Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Unallocated items comprise mainly investments and related revenue, corporate assets, head office expenses and income tax assets. These are the measures reported to the Group's Chief Executive for the purposes of resource allocation and assessment of segment performance.
Business segments
Segment information about these businesses is presented below.
Year ended
Surgical
Woundcare
Consolidated
31 December 2020
(Unaudited)
£'000
£'000
£'000
Revenue
External sales
50,169
36,627
86,796
Result
Adjusted segment operating profit
9,094
5,357
14,451
Amortisation of acquired intangibles
(2,132)
(137)
(2,269)
Segment operating profit
6,962
5,220
12,182
Unallocated expenses
(618)
Exceptional costs
(834)
Operating profit
10,730
Finance income
220
Finance costs
(861)
Profit before tax
10,089
Tax
(1,505)
Profit for the year
8,584
At 31 December 2020
Surgical
Woundcare
Consolidated
(Unaudited)
Other information
£'000
£'000
£'000
Capital additions:
Software intangibles
74
52
126
Development
1,659
1,129
2,788
Property, plant and equipment
1,367
979
2,346
Depreciation and amortisation
(4,709)
(2,123)
(6,832)
Statement of Financial Position
Assets
Segment assets
155,301
82,999
238,300
Unallocated assets
255
Consolidated total assets
238,555
Liabilities
Segment liabilities
20,354
15,990
36,344
Year ended
Surgical
Woundcare
Consolidated
31 December 2019
(Audited)
£'000
£'000
£'000
Revenue
External sales
56,544
45,824
102,368
Result
Adjusted segment operating profit
16,086
11,378
27,464
Amortisation of acquired intangibles
(1,675)
(8)
(1,683)
Segment operating profit
14,411
11,370
25,781
Unallocated expenses
(485)
Exceptional costs
(1,053)
Operating profit
24,243
Finance income
406
Finance costs
(392)
Profit before tax
24,257
Tax
(5,338)
Profit for the year
18,919
At 31 December 2019
Surgical
Woundcare
Consolidated
(Audited)
Other information
£'000
£'000
£'000
Capital additions:
Software intangibles
364
462
826
Development
1,346
1,009
2,355
Property, plant and equipment
1,393
1,280
2,673
Depreciation and amortisation
(3,985)
(1,863)
(5,848)
Statement of Financial Position
Assets
Segment assets
160,241
66,354
226,595
Unallocated assets
387
Consolidated total assets
226,982
Liabilities
Segment liabilities
21,647
14,100
35,747
Consolidated total liabilities
35,747
Geographic segments
The Group operates in the UK, The Netherlands, Germany, the Czech Republic, France, Israel, with a sales office located in Russia, and a sales presence in the USA. In presenting information on the basis of geographical segments, segment revenue is based on the geographical location of customers. Segment assets are based on the geographical location of the assets.
The following table provides an analysis of the Group's revenue by geographical market, irrespective of the origin of the goods/services, based upon location of the Group's customers:
(Unaudited)
(Audited)
Year ended 31 December
2020
2019
£'000
£'000
United Kingdom
16,748
20,151
Germany
18,888
20,018
France
4,369
3,913
Rest of Europe
18,027
19,563
United States of America
23,690
34,879
Rest of World
5,074
3,844
86,796
102,368
The following table provides an analysis of the Group's total assets by geographical location:
(Unaudited)
(Audited)
As at 31 December
2020
2019
£'000
£'000
United Kingdom
125,343
117,055
Germany
71,752
69,501
France
9,703
9,614
Rest of Europe
7,224
5,106
United States of America
3,370
2,532
Israel
21,163
23,175
238,555
226,982
4. Profit from operations
(Unaudited)
(Audited)
Year ended 31 December
2020
2019
£'000
£'000
Profit from operations is arrived at after charging:
Depreciation of property, plant and equipment
3,467
3,154
Amortisation of:
- acquired intellectual property rights
2,269
1,683
- software intangibles
563
519
- development costs
533
492
Research and development costs expensed excluding regulatory costs
3,727
3,195
Cost of inventories recognised as expense
40,397
40,717
Write down of inventories expensed
359
504
Staff costs
35,828
33,179
Net foreign exchange loss
376
2,790
5. Taxation
(Unaudited)
(Audited)
Year ended 31 December
2020
2019
£'000
£'000
a) Analysis of charge for the year
Current tax:
Tax on ordinary activities - current year
1,514
5,195
Tax on ordinary activities - prior year
21
5
1,535
5,200
Deferred tax:
Tax on ordinary activities - current year
(3)
61
Tax on ordinary activities - prior year
(27)
77
(30)
138
Tax charge for the year
1,505
5,338
The Group has chosen to use a weighted average country tax rate rather than the UK tax rate for the reconciliation of the charge for the year to the profit per the income statement. The Group operates in several jurisdictions, some of which have a tax rate in excess of the UK tax rate. As such, a weighted average country tax rate is believed to provide the most meaningful information to the users of the financial statements.
(Unaudited)
(Audited)
Year ended 31 December
2020
2019
£'000
£'000
b) Factors affecting tax charge for the year
Profit before taxation
10,089
24,257
Profit multiplied by the weighted average Group tax rate of 24.6% (2019: 21.6%)
2,481
5,248
Effects of:
Net expenses not deductible for tax purposes and other timing differences
268
246
Patent Box Relief
(1,091)
(124)
Utilisation of trading losses
-
(26)
Net impact of deferred tax on capitalised development costs and R&D relief
(186)
(131)
Share-based payments
39
43
Adjustments in respect of prior year - current tax
21
5
Adjustments in respect of prior year and rate changes - deferred tax
(27)
77
Taxation
1,505
5,338
6. Earnings per share
The calculation of the basic and diluted earnings per share is based on the following data:
(Unaudited)
(Audited)
Year ended 31 December
2020
2019
Number of shares
'000
'000
Weighted average number of ordinary shares for the purposes of basic earnings per share
215,126
214,730
Effect of dilutive potential ordinary shares: share options, deferred share bonus, LTIPs
2,705
2,107
Weighted average number of ordinary shares for the purposes of diluted earnings per share
217,831
216,837
(Unaudited)
(Audited)
2020
2019
£'000
£'000
Profit for the year attributable to equity holders of the parent
8,584
18,919
Exceptional costs
834
1,053
Amortisation of acquired intangible assets
2,269
1,683
Movement in fair value accounting for liabilities
167
(345)
Adjusted profit for the year attributable to equity holders of the parent
11,854
21,310
(Unaudited)
(Audited)
2020
2019
pence
pence
Basic EPS
3.99
8.81
Diluted EPS
3.94
8.72
Adjusted basic EPS
5.51
9.92
Adjusted diluted EPS
5.44
9.83
7. Acquisition of Raleigh
On 23 November 2020 the Group acquired the entire issued share capital of Raleigh Adhesive Coatings Limited, a UK-based woundcare and bio-diagnostics coatings business. In the year ended 31 December 2020, Raleigh contributed £0.7 million revenue to the Group and had an operating profit of £0.1 million. In addition, amortisation of intangible assets of £0.1 million was recorded within the Group as a result of the acquisition. Had Raleigh been part of the Group since 1 January 2020, it would have contributed £6.4 million of revenue and £0.4 million of operating profit.
£'000
Identifiable net assets acquired
Technology-based Intangible assets
1,320
Customer related intangible assets
7,390
Property, plant and equipment
587
Finance lease assets
645
Trade and other receivables
1,999
Inventory
1,009
Cash and cash equivalents
76
Corporation tax debtor
54
Trade and other payables
(1,891)
Lease liabilities
(646)
Deferred tax
(1,713)
Goodwill
13,170
Total net assets acquired
22,000
Satisfied by
£'000
Cash consideration
22,000
Net cash flow on acquisition
£'000
Cash consideration
22,000
Cash acquired
(76)
21,924
None of the goodwill on the acquisition is expected to be deductible for income tax.
8. Events after reporting period
There have been no material events subsequent to the end of the reporting period ended 31 December 2020.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our Privacy Policy.ENDFR JFMMTMTABTMB
Recent news on Advanced Medical Solutions
See all newsREG - Adv Medical Solutns. - Interim Results
AnnouncementREG - Adv Medical Solutns. - Total Voting Rights
AnnouncementREG - Adv Medical Solutns. - Notice of Interim Results
AnnouncementREG - Adv Medical Solutns. - Total Voting Rights
AnnouncementREG - Adv Medical Solutns. - Half Year Trading update
Announcement