TIDMAMS
RNS Number : 9901S
Advanced Medical Solutions Grp PLC
15 March 2023
15 March 2023
Advanced Medical Solutions Group plc
("AMS" or the "Group" or the "Company")
Unaudited preliminary results for the year ended 31 December
2022
Strong revenue growth, profit and cash generation in line with
expectations.
Good clinical and regulatory progress across promising pipeline
of new products
Winsford, UK: Advanced Medical Solutions Group plc (AIM: AMS),
the world-leading specialist in tissue-healing technologies, today
announces its unaudited preliminary results for the year ended 31
December 2022.
Financial Summary:
2022 2021 Reported Change at
change constant
currency(1)
------ ------ ---------
Revenue (GBP million) 124.3 108.6 +14% +10%
----------------------------------- ------ ------ --------- -------------
Adjusted Measures
Adjusted(2) profit before
tax (GBP million) 28.5 25.6 +11%
Adjusted(2) profit before
tax margin % 22.9% 23.6% -0.7pp
Adjusted(2) diluted earnings
per share (p) 10.47 9.66 +8%
Reported Measures
Profit before tax (GBP million) 25.9 22.0 +18%
Profit before tax margin
% 20.8% 20.2% +0.6pp
Diluted earnings per share
(p) 9.30 8.01 +16%
Net operating cash flow (GBP
million) 26.9 31.0 -13%
Net cash(3) (GBP million) 82.3 73.0 +13%
Proposed full year dividend
per share (p) 2.15 1.95 +10%
----------------------------------- ------ ------ --------- -------------
Business Highlights (including post period end):
AMS is pleased to report robust financial performance in line
with expectations and significant regulatory and clinical progress
as it continues to invest in its portfolio of next-generation
products.
Financial
-- Group revenue increased to GBP124.3 million (2021: GBP108.6
million), an increase of 14% or 10% at constant currency, driven by
commercial progress, foreign exchange tailwinds and higher pricing
to recover inflationary cost increases
-- Adjusted profit before tax increased by 11% to GBP28.5
million (2021: GBP25.6 million) as the business continued to manage
the majority of inflationary pressure through selling price
increases
-- Net cash increased to GBP82.3 million (2021: GBP73.0 million)
driven by strong trading and robust operational cash flow
-- Investment in R&D increased to GBP12.3 million (2021:
GBP9.3 million), representing 9.9% of revenues (2021: 8.6%), as the
Group accelerates investment in new products and Medical Device
Regulation ("MDR")
-- Surgical Business Unit revenues increased to GBP74.9 million
(2021: GBP64.6 million), an increase of 16% and of 12% at constant
currency
-- Woundcare Business Unit revenues increased to GBP49.5 million
(2021: GBP44.0 million), an increase of 13% and of 8% at constant
currency
-- Reflecting the strong financial performance and management's
ongoing confidence in the Group's outlook, the Board proposes an
increased final dividend of 1.51p per share (2021: 1.37p) bringing
the total proposed dividend to 2.15p per share (2021: 1.95p)
Operational
-- Good engagement and progress with the FDA on our US L
iquiBandFix8(R) Pre-Market Approval (PMA) with approval on track
for H2 2023
-- The Seal-G(R) and Seal-G(R) MIST clinical study continues to
progress well with over 80% of patients now recruited. The final
results are on track to be released in H1 2023 when they will be
used to market the technology during the commercial launch
-- LiquiBand (R) XL was approved and launched in the US during
H2 2022. Initial market response is very positive and underpins
confidence in the product
-- Completed the acquisition of AFS Medical GmbH ("AFS"), an
Austria-based distributor of minimally invasive surgical devices
for an initial cash purchase price of EUR4.5 million with a further
cash deferred consideration of up to EUR1.5 million based on
delivery of 2022-2024 EBITDA targets
-- On 1(st) February 2023, AMS announced that it had acquired
Connexicon Medical Ltd (Connexicon), a tissue adhesive technology
specialist, for an initial, upfront payment of EUR7 million with
further deferred payments dependent on delivery of certain research
& development, regulatory and commercial milestones between
2023 and 2027. The acquisition strengthens AMS's position in the
$300 million global medical adhesive market, providing significant
new commercial opportunities
Commenting on the results Chris Meredith, Chief Executive
Officer of AMS, said: "I am pleased with the resilience that our
business has shown in delivering another period of strong financial
performance in the current challenging economic conditions, and we
are on track to meet 2023 expectations. The investments we have
made in our in-house and acquired technologies have strengthened
the quality and breadth of our portfolio enabling us to deliver
returns across a broader range and validate our growth strategy.
AMS is committed to investing in R&D and acquisitions that will
further strengthen our established portfolios while continuing to
penetrate new markets, maintaining robust growth in the
long-term."
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 amortisation of
acquired intangible assets which was GBP3.4 million (2021: GBP3.2
million) and the movement in long-term liabilities recognised on
acquisitions which was a credit GBP0.8 million (2021: GBP0.4
million debit).
3. Net cash consists of cash and cash equivalents with nil debt (2021: GBPnil debt)
- 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
Michael King, Investor Relations
Consilium Strategic Communications Tel: +44 (0) 20 3709
5700
Mary-Jane Elliott / Matthew Neal / Lucy
Featherstone
Investec Bank PLC (NOMAD & Broker) Tel: +44 (0) 20 7597
5970
Gary Clarence / David Anderson
HSBC Bank PLC (Broker) Tel: +44 (0) 20 7991
8888
Sam McLennan / Joe Weaving / Stephanie
Cornish
About Advanced Medical Solutions Group plc
AMS is a world-leading independent developer and manufacturer of
innovative tissue-healing technology, focused on quality outcomes
for patients and value for payers. AMS has a wide range of surgical
products including tissue adhesives, sutures, haemostats, internal
fixation devices and internal sealants, which it markets under its
brands LiquiBand(R) , RESORBA(R) , LiquiBandFix8(R) and Seal-G(R) .
AMS also supplies wound care dressings such as silver alginates,
alginates and foams through its ActivHeal(R) brand as well as under
white label. Since 2019, the Group has made five acquisitions:
Sealantis, an Israeli developer of innovative internal sealants;
Biomatlante, a French developer and manufacturer of surgical
biomaterials, Raleigh, a leading UK coater and converter of
woundcare and bio-diagnostics materials, AFS Medical, an Austrian
specialist surgical business and Connexicon, an Irish tissue
adhesives specialist.
AMS's products, manufactured in the UK, Germany, France, the
Netherlands, the Czech Republic and Israel, 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, Ireland, Germany, France and Israel. Established in 1991,
the Group has more than 800 employees. For more information, please
see www.admedsol.com .
Chief Executive's Review
Group performance
The Group delivered record sales of GBP124.3 million driven by
good commercial progress from both Business Units.
Surgical Business Unit
The Surgical Business Unit includes tissue adhesives, sutures,
biosurgical devices and internal fixation devices marketed under
the AMS brands LiquiBand(R) , RESORBA(R) , LiquiBandFix8(R) and
Seal-G(R) .
Growth in the Surgical Business was driven by strong
performances from the Biosurgical Devices and Internal Fixation
products. Revenue increased by 16% in the period to GBP74.9 million
(2021: GBP64.6 million) and by 12% on a constant currency
basis.
Surgical Business 2022 2021 Reported Change
Unit GBP million GBP million Growth at constant
currency
Advanced Closure 36.0 33.1 9% 1%
------------- ------------- --------- -------------
Internal Fixation
and Sealants 4.1 2.6 60% 60%
------------- ------------- --------- -------------
Other Distributed 2.9 0.0
------------- ------------- --------- -------------
Traditional Closure 16.0 14.9 7% 6%
------------- ------------- --------- -------------
Biosurgical Devices 15.8 14.0 13% 13%
------------- ------------- --------- -------------
TOTAL 74.9 64.6 16% 12%
------------- ------------- --------- -------------
Advanced Closure
LiquiBand(R) is a range of topical skin adhesives, incorporating
medical grade cyanoacrylate in combination with purpose-built
applicators. These products are used to close and protect a broad
variety of surgical and traumatic wounds.
Advanced Closure 2022 2021 Reported Change
GBP million GBP million Growth at constant
currency
Americas 23.4 22.4 5% -6%
------------- ------------- --------- -------------
UK/Germany 7.3 6.3 17% 17%
------------- ------------- --------- -------------
ROW 5.3 4.5 19% 17%
------------- ------------- --------- -------------
TOTAL 36.0 33.1 9% 1%
------------- ------------- --------- -------------
Revenues increased to GBP36.0 million (2021: GBP33.1 million)
representing growth of 9% on a reported basis and 1% on a constant
currency basis.
Strong growth in LiquiBand(R) globally was partially offset by
weakness in US revenues and consequently US sales increased by only
5% at reported currency and declined by 6% at constant
currency.
In 2022, the Group began a strategic review of its US
LiquiBand(R) business which involves assessing and streamlining its
routes to market and product offering in order to help drive
stronger growth in this key market sector. As part of this
initiative, we identified and first made contact with Connexicon as
a potential acquisition target. We intend to complete this
strategic review process during 2023 and it is expected that this
will result in improved market access and growth potential from H2
2023. As a consequence of the ongoing changes, we had reduced
orders from one partner in H2 2022 and this is expected to continue
throughout H1 2023.
Following its approval in H1 2022, LiquiBand(R) XL delivered a
strong launch in H2 2022 with GBP0.6 million of initial US orders
fulfilled, strengthening our optimism on the short and long-term
potential of LiquiBand(R) XL in the fast growing $60 million long
wound market and unlocking further growth potential for the
LiquiBand(R) business. The US approval is to be extended in early
2023 with the addition of a product that can close wounds up to
60cm rather than the current maximum of 40cm.
Going forward, we remain highly confident of delivering growth
with LiquiBand(R) in the US, especially as we start to reap the
benefits of adding LiquiBand(R) XL and the recently acquired
Connexicon Medical products to our portfolio.
The acquisition of Connexicon Medical in February 2023 brings an
existing Indermil(R) Flexifuse(R) business in Europe and APAC,
progress towards accessing the large Chinese market and an
exciting, enhanced portfolio for the US market that provides
significant commercial synergies with approvals expected by early
2024. The addition of Connexicon's highly experienced R&D team
to the Group has provided AMS with a medical adhesive development
hub in Dublin, strengthening the Company's ability to develop and
launch innovative adhesive and sealant technologies in the coming
years.
Outside the US market, the LiquiBand(R) brand continued to
perform very strongly, with underlying growth of 17% in both the
UK/Germany and the Rest of the World markets. AMS is encouraged to
see early-stage traction building for LiquiBand(R) XL outside the
US, and this is now contributing to growth.
In addition, the Group has recently taken over the direct
ownership and distribution of InteguSeal(R) , a cyanoacrylate
microbial surgical sealant, from a partner that has historically
generated a low level of sales. AMS is now looking at options for
broader global distribution that have the potential to generate
more meaningful revenue. The first direct order was shipped to a
new partner in Japan in late 2022 and there is significant business
development activity planned in other key EU and APAC markets in
early 2023.
Internal Fixation and Sealants
LiquiBandFix8(R) uses individual, accurately delivered drops of
cyanoacrylate adhesive inside the body, to fix hernia meshes in
place, instead of sutures or tacks.
A strong performance from LiquiBandFix8(R) was supported by the
UK National Institute for Clinical Excellence (NICE) recommendation
and the AFS acquisition as revenues increased to record levels of
GBP4.1 million (2021: GBP2.6 million) an increase of 60% at
reported and constant currency. The marketing expertise from AFS
will be beneficial to other marketing teams and will help to
increase traction in more specialist minimally invasive surgical
markets.
In October 2022, AMS reported that the Premarket Approval (PMA)
for LiquiBandFix8(R) had been submitted and accepted by the FDA.
Since then, FDA engagement has been high and the process is
progressing well with approval on track for H2 2023. This would be
the first product of its kind in the US and the anticipated launch
in 2024 represents a significant commercial opportunity for the
Company.
Seal-G(R) MIST ( laparoscopic surgery) and Seal-G(R) (open
surgery ) are novel, internal, biological sealants used to seal
tissue during gastrointestinal surgery to reduce bleeding and
leakage of fluid. The trial continues to progress well with over
80% of the 160 procedures now complete, with results on track for
H1 2023 and launch planned for H2 2023.
Key Opinion Leader feedback continues to be highly positive and
AMS remains excited about the opportunity for Seal-G(R) products in
answering a high unmet patient need for an effective GI sealant.
Beyond colon surgery, the Company sees opportunities to drive
demand in surgeries with other potential indications that
experience high leakage rates, for example oesophageal and
pancreatic surgery. In early 2023, we received our first end-user
commercial order from a UK surgeon who is using SEAL-G(R) in
oesophageal surgery to reduce the risk of leaks.
Traditional Closure
RESORBA(R) branded Absorbable and Non-absorbable Suture ranges
are used in general surgery and a wide range of surgical
specialties including dental and ophthalmic surgery. Revenue
increased by 7% to GBP16.0 million and by 6% at constant currency
(2021: GBP14.9 million).
This portfolio has been established in predominantly European
markets. However, in line with the Group's ongoing strategy to
expand the geographic reach of existing products, recent successes
in the US dental market made a significant contribution to
Traditional Closure revenues during the period.
Biosurgical Devices
The Biosurgical Devices category comprises antibiotic-loaded
collagen sponges, collagen membranes and cones, oxidised cellulose,
synthetic bone substitutes and bio-absorbable screws. R evenues
increased by 13% at reported and constant currency to GBP15.8
million (2021: GBP14.0 million).
Demand for collagens both with and without antibiotics continued
to drive growth in Europe in 2022 including an increased focus on
the cardiovascular market with a supplementary brand and a new
specialist partner network. AMS's strategy to expand its
distribution network into new territories has also been working
well, with particular success in the Far East where one of its
distributors was the first to exceed annual collagen revenues of
GBP0.5 million.
The Group continues to work towards its first collagen approval
in the US with a 510(k) submission expected in 2023 for a dental
application to support haemostasis and healing following tooth
extraction.
The RESORBA (R) branded bone substitutes range has shown a
promising start following its launch in 2021, rolling out in a
number of European countries during 2022. The Group continues to
work towards its planned Independent Rep launch into the US Bone
Substitutes market which is on track for mid-2023.
Other Distributed Products
Following the acquisition of AFS in the period, the Other
Distributed category comprises products distributed by AFS,
including minimally invasive access ports and laparoscopic
instruments. This category excludes sales of LiquiBandFix8(R) which
are recorded within the Internal Fixation and Sealants category.
Since acquisition, AFS trading has been in-line with
expectations.
Woundcare Business Unit
The Woundcare Business Unit is comprised of the Group's
multi-product portfolio of advanced woundcare dressings sold under
its partners' brands and the ActivHeal (R) label, plus a portfolio
of specialist medical bulk materials including multi-layer
woundcare and bio diagnostics products.
The Woundcare portfolio growth was driven by higher ordering
from OEM partners, growth in ActivHeal (R) , bulk materials and
royalties as well as increased pricing to recover inflationary cost
increases . Revenue increased by 13% in the Period to GBP49.5
million (2021: GBP44.0 million) and by 8% on a constant currency
basis.
Woundcare Business 2022 2021 Reported Change
Unit GBP million GBP million Growth at constant
currency
Infection Management 16.1 15.1 7% 2%
------------- ------------- --------- -------------
Exudate Management 23.4 21.7 8% 7%
------------- ------------- --------- -------------
Other Woundcare 9.9 7.2 38% 26%
------------- ------------- --------- -------------
TOTAL 49.5 44.0 13% 8%
------------- ------------- --------- -------------
Infection Management
The infection management category comprises advanced woundcare
dressings that incorporate anti-microbials such as Silver and
Polyhexamethylene Biguanide (PHMB). Revenue increased by 7% on a
reported basis and by 2% on a constant currency basis to GBP16.1
million (2021: GBP15.1 million).
The Group's growth in the infection management market continues
to be affected by reimbursement issues in a number of territories,
driving greater use of standard dressings over higher priced
anti-microbial alternatives. However, orders for AMS's silver
alginate range have now stabilised following the renegotiation of a
major contract in 2022 and progress continues to be made through
new distribution channels. Other new products, such as the Silver
High Performance Dressing and Silicone PHMB foam range continue to
be rolled out and help to sustain growth.
New product approvals in this area are becoming increasingly
challenging and we are currently reviewing FDA questions on the
510(k) for our innovative high gelling product with anti-biofilm
activity that was submitted in 2022. On a more positive note, we
expect to obtain extended US approval for our Silicone PHMB foam
range in H1 2023. This dressing provides high efficacy and
sustained performance, and the enhanced anti-microbial approval
increases its potential to penetrate the US, MEA and APAC
regions.
Exudate Management
Exudate Management comprises advanced woundcare dressings, gels
and bulk materials which do not incorporate any antimicrobial
elements. Revenue increased by 8% on a reported basis and by 7% on
a constant currency basis to GBP23.4 million (2021: GBP21.7
million).
Increased orders from the Group's OEM partners continued to
drive Exudate Management growth with a significant increase in
demand for our specialist medical foam material.
Growth has also been driven by the successful implementation of
the Group's strategy to expand the distribution network for its own
ActivHeal(R) range of dressings. AMS has continued to appoint new
ActivHeal (R) distribution partners in markets where its key
partners have no or low presence, but the demand for a high
quality, cost effective woundcare dressing range still exists.
Several new contracts were signed in 2022, with launches being
undertaken as market registrations are obtained.
AMS has applied its Biosurgical, collagen technology into
developing a tissue scaffold designed to treat hard to heal and
stalled wounds such as diabetic foot ulcers and venous leg ulcers.
A 510(k) submission was made in the period and we are reviewing FDA
questions as we continue to evaluate the optimal commercial
strategy.
Progress continues to be made in the development of a
customer-specific negative pressure dressing. The 510(k) submission
has been made by our partner and AMS awaits confirmation of
approval and commercialisation.
Other Woundcare
Other Woundcare comprises royalties, fees and woundcare
sealants. Revenue increased by 38% at reported currency and by 26%
at constant currency to GBP9.9 million (2021: GBP7.2 million) due
to increased partner demand for membranes, gels and hydrocolloid
and a higher royalty income from the Group's licensing arrangement
with Organogenesis.
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/or that have products or customers that offer effective
commercial synergies.
In line with our stated strategy, the acquisition of AFS in May
2022 underlines the Group's ambition to expand its direct surgical
footprint and capability and the acquisition of Connexicon Medical
in February 2023 illustrates the company's commitment to further
expand its key portfolios and ensure that it remains at the
forefront of its core technologies.
Whilst in recent years the Group's completed transactions have
been strategic bolt-ons, a key focus of the recently formed
corporate business development team is on identifying larger more
transformative targets. With cash of GBP82.3 million at the end of
2022 and access to extensive debt facilities, the Group is well
placed to execute a deal of this nature.
Regulatory
In December 2022, the EU Commissioner announced that the
enforcement of the Medical Devices Regulation (MDR) would be
delayed until 2027 or 2028 depending on the classification of the
device. Given the progress we have already made, AMS expects
positive responses to its applications for certificate extensions
for MDD products expiring before these dates. It is anticipated
that competitors that have not made MDR progress will be unable to
secure such extensions.
AMS plans to maintain its current schedule of work to meet the
new standards and anticipates that the phasing of its
capitalisation of R&D costs relating to MDR will be broadly
unchanged.
At the current time, of the 55 AMS product groups going through
MDR, 30 have been approved or are awaiting self-declaration, 19 are
with the Notified Bodies ahead of their review and the remaining 6
files are being readied for submission to Notified Bodies in the
next 12 months.
Supply Chain and Inflation
AMS has taken proactive steps to mitigate risks arising from
global supply chain challenges such as increasing inventory levels
and setting up alternative suppliers where feasible. As a result,
shortages of material have not had a significant impact on the
Group's ability to supply products to its customers. Given the long
shelf life of the Group's materials and finished goods, the risk of
inventory obsolescence is low but is closely monitored and
provisions are made where relevant. We continue to closely monitor
the global supply chain situation.
Inflationary pressures continue to be felt across the business
through higher cost of goods, energy prices and staff costs.
However, the Group has been able to successfully recover a
significant proportion of this impact from its customers through
price review negotiations.
Environmental, Social & Governance
Our ESG strategy remains focused on our environmental impact,
the well-being of our workforce, driving equality, diversity and
inclusion, and further strengthening our corporate governance,
internally and across our supply chain. We believe that being a
good corporate citizen is critical to our long-term sustainable
success .
Building on the ESG framework we developed in 2021, the Group
has made good progress in 2022. An important step during the year
was the appointment of Inspired Energy as our ESG partner. AMS has
worked with the organisation to create a 'Pathway to Net Zero' with
an initial focus on calculating our Scope 3 emissions and Carbon
Balance Sheet. We intend to complete this process prior to issuing
the annual report in early Q2 2023 and will publish a comprehensive
update at that time.
The steering committee continues to manage ESG activities across
the Group and has been supplemented with a network of local ESG
champions representing each site and function, as well as an
Equality Diversity and Inclusion Committee.
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, and the years
prior, would not have been possible.
Outlook
The Group is well placed to navigate the ongoing macro-economic
challenges. We have proven our ability to recover the majority of
energy and other cost inflation by increasing selling prices, are
insulated from high interest rates due to our cash position and our
products do not rely on consumer demand exposed to recessionary
factors.
These factors along with our proven commercial strategy to
increase our share of our large markets with innovation and
geographical expansion, leaves us well placed for continued growth
both in the short and long term.
Influenced by the strategic review of our US LiquiBand(R)
business, and the associated 2024 launch timing for the US
Connexicon products, we expect weak demand in H1 2023 as we
finalise the strategic discussions across our partner base,
followed by recovery in H2 2023 and much stronger growth
thereafter.
Given AMS' resilience and the strength of its overall portfolio,
the Group remains on track to meet market expectations for
2023.
Chris Meredith
Chief Executive Officer
Financial Review
Summary
IFRS reporting
To provide the clearest possible insight into our 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 reconciles
them as appropriate. The measures used in this statement include
constant currency revenue growth, adjusted operating margin,
adjusted profit before tax and adjusted earnings per share,
allowing the impacts of exchange rate volatility, exceptional
items, amortisation, and the movement in long-term acquisition
liabilities to be separately identified. Net cash is an additional
non-GAAP measure used.
Overview
Revenue increased by 14% at reported currency and 10% at
constant currency to GBP124.3 million (2021: GBP108.6 million).
Gross margin improved to 59.0% (2021: 56.2%) as increased
volumes drove improved operational leverage.
Administration expenses increased to GBP47.4 million (2021:
GBP37.0 million) due to the addition of AFS expenses, higher
regulatory and R&D investment, increased selling and marketing
activity and a significant adverse foreign exchange movement.
The Group incurred GBP12.3 million of gross R&D spend in the
period (2021: GBP9.3 million), representing 9.9% of sales (2021:
8.6%), reflecting increased investment in innovation and in meeting
the increasing regulatory standards. As shown in the table below,
part of this cost is capitalised and amortised over the following 5
to 10 years.
2022 2021
GBP'000 GBP'000
---------------------------------------- -------- --------
Total investment in Research and
Development, Regulatory and Clinical 12,301 9,343
Of which:
Charged to the profit and loss account 6,149 5,310
Capitalised, to be amortised over
5-10 years 6,152 4,033
Amortisation of acquired intangible assets increased to GBP3.4
million in 2022 (2021: GBP3.2 million) due to the acquisition of
AFS in May 2022.
In the period, a credit of GBP0.8 million (2021: GBP0.4 million
debit) was recorded in relation to movements in the long-term
liabilities relating to deferred consideration and earnout from the
Sealantis and AFS acquisitions.
Adjusted profit before tax, which excludes amortisation of
acquired intangibles and movements in long term liabilities
recognised on acquisition, increased by 11% to GBP28.5 million
(2021: GBP25.6 million) whilst the adjusted PBT margin decreased by
70 bps to 22.9% (2021: 23.6%) due to cost inflation having an
adverse impact on the Group's profit margin.
Reported profit before tax was GBP25.9 million (2021: GBP22.0
million).
Reconciliation of profit before tax to adjusted
profit before tax
(Unaudited) Audited
2022 2021
GBP'000 GBP'000
------------------------------------- ----------- -------
Profit before tax 25,910 21,984
--------------------------------------- ----------- -------
Amortisation of acquired intangibles 3,414 3,179
Movement in long-term acquisition
liabilities (840) 426
Adjusted profit before tax 28,484 25,589
--------------------------------------- ----------- -------
The Group's effective corporation tax rate, reflecting the
blended tax rates in the countries where we operate and including
UK patent box relief, increased slightly to 21.2% (2021: 20.5%).
The UK Government's enactment of a 25% tax rate from April 2023
will result in an increased group effective tax rate from
FY2023.
Adjusted diluted earnings per share increased by 8% to 10.47p
(2021: 9.66p) and diluted earnings per share increased by 16% to
9.30p (2021: 8.01p), reflecting the Group's increased earnings.
Reflecting its confidence in the Group's prospects, the Board is
proposing an increased final dividend of 1.51p per share, to be
paid on 9 June 2023 to shareholders on the register at the close of
business on 19 May 2023. This follows the interim dividend of 0.64p
per share paid on 22 October 2022 and would, if approved, make a
total dividend for the year of 2.15p per share (2021: 1.95p) an
increase of 10%.
Operating result by business segment
Year ended 31 December 2022 Surgical Woundcare
GBP'000 GBP'000
------------------------------ --------- ----------
Revenue 74,861 49,469
Segment operating profit 19,333 6,687
Amortisation of acquired
intangibles 2,469 945
Adjusted segment operating
profit(4) 21,802 7,632
Adjusted operating margin(4) 29.1% 15.4%
------------------------------ --------- ----------
Year ended 31 December 2021
Revenue 64,630 43,971
Segment operating profit 18,298 5,420
Amortisation of acquired
intangibles 2,005 1,174
Adjusted segment operating
profit(4) 20,303 6,594
Adjusted operating margin(4) 31.4% 15.0%
------------------------------ --------- ----------
(Note 4: Adjusted for amortisation of acquired intangible
assets)
(Table is reconciled to statutory information in note 3 of the
financial information.)
Surgical
Surgical revenues increased by 16% to GBP74.9 million (2021:
GBP64.6 million) at reported currency and by 11.6% at constant
currency. Adjusted operating margin decreased by 230 bps to 29.1%
(2021: 31.4%) due to lower shipments of LiquiBand(R) to US
partners, the addition of AFS at lower operating margin and the
adverse margin impact of inflation.
Woundcare
Woundcare revenues increased by 13% to GBP49.5 million (2021:
GBP44.0 million) at reported currency and increased 8.4% at
constant currency. Adjusted operating margin increased by 40 bps to
15.4% (2021: 15.0%) as favourable sales pricing mix was offset by
the adverse margin impact of inflation.
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 18 months. In the
financial year, approximately one third of sales were invoiced in
Euros and approximately 30% were invoiced in US Dollar.
The Group estimates that a 10% movement in the GBP:US$ or GBP:
EUR exchange rate will impact Sterling revenues by approximately
3.1% and 3.0% respectively and, in the absence of any hedging, this
would have an impact on the Group operating margin of 2.5% and 0.3%
percentage points respectively.
Cash flow
The Group continued to generate significant amounts of cash from
operations. Net cash inflow from operating activities in the period
was GBP26.9 million, which was lower than 2021 (GBP31.0 million)
due to increased investment in inventory to mitigate the supply
chain crisis and to mitigate any potential risks relating to the
transition to MDR.
At the end of the period, the Group had net cash of GBP82.3
million (31 December 2021: GBP73.0 million) inclusive of the
acquisition of AFS.
Working capital increased during the year. Increased inventory
and receivables were only partially offset by increased payables.
Inventory cover increased to 6.2 months of supply (2021: 4.9
months) due to planned increases in stock levels. Debtor days and
Creditor days have both remained broadly consistent with prior
period at 44 days (2021: 44 days) and 37 days (2021: 37 days)
respectively.
Capital investment in equipment, R&D and regulatory costs
increased to GBP9.9 million (2021: GBP6.5 million) as the Group
continues to invest in its future pipeline.
Cash outflow relating to taxation decreased to GBP3.3 million
(2021: GBP4.1 million) due to the timing of payments on
account.
The Group paid its final dividend for the year ended 31 December
2021 of GBP3.0 million in June 2022 (2021: for the year ending
December 2020, GBP2.6 million in June 2021), and its interim
dividend for the six months ended 30 June 2022 of GBP1.4 million in
October 2022 (for the 6 months ended 30 June 2021: GBP1.2 million
in October 2021).
The Group retains strong support from its two banks, NatWest and
HSBC, and in order to retain maximum flexibility of facility size
for future acquisitions, it did not renew its credit facility when
it expired in December 2022.
CONDENSED CONSOLIDATED INCOME STATEMENT
(Unaudited) (Audited)
Year ended 31 December 2022 2021
Note GBP'000 GBP'000
----------------------------------------- ----- ------------ ----------
Revenue from continuing operations 3 124,330 108,601
Cost of sales (50,914) (47,531)
----------------------------------------- ----- ------------ ----------
Gross profit 73,416 61,070
Distribution costs (1,626) (1,483)
Administration costs (47,378) (36,970)
Other income 478 381
----------
Operating profit 4 24,890 22,998
Finance income 1,691 84
Finance costs (671) (1,098)
----------------------------------------- ----- ------------ ----------
Profit before taxation 25,910 21,984
Income tax 5 (5,504) (4,503)
----------------------------------------- ----- ------------ ----------
Profit for the period attributable to
equity holders of the parent 20,406 17,481
----------------------------------------- ----- ------------ ----------
Earnings per share
Basic 6 9.42p 8.11p
Diluted 6 9.30p 8.01p
Adjusted diluted (5) 6 10.47p 9.66p
----------------------------------------- ----- ------------ ----------
(Note 5: Adjusted for amortisation of acquired intangible assets
and movement in long-term acquisition liabilities.)
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
(Unaudited) (Audited)
2022 2021
GBP'000 GBP'000
---------------------------------------------- ----------- ---------
Profit for the year 20,406 17,481
-------------------------------------------------- ----------- ---------
Exchange differences on translation
of foreign operations 6,940 (5,194)
Loss arising on cash flow hedges (1,297) (1,548)
Deferred tax (charge)/credit arising
on cash flow hedges (201) 290
-------------------------------------------------- ----------- ---------
Total other comprehensive income/(expense)
for the year 5,442 (6,452)
-------------------------------------------------- ----------- ---------
Total comprehensive income for
the year attributable to equity
holders of the parent 25,848 11,029
-------------------------------------------------- ----------- ---------
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
(Unaudited) (Audited)
31 December 31 December
2022 2021
GBP'000 GBP'000
Assets
Non-current assets
Intangible assets 48,373 40,958
Goodwill 70,859 66,032
Property, plant and equipment 29,015 27,441
Trade and other receivables 937 105
------------------------------------------- ------------ --------------------------------
149,184 134,536
Current assets
Inventories 27,911 19,300
Trade and other receivables 21,553 21,016
Current tax assets 184 1,692
Cash and cash equivalents 82,262 72,965
------------------------------------------- ------------ --------------------------------
131,910 114,973
------------------------------------------- ------------ --------------------------------
Total assets 281,094 249,509
------------------------------------------- ------------ --------------------------------
Liabilities
Current liabilities
Trade and other payables 20,671 14,958
Current tax liabilities 948 897
Lease liabilities 1,059 1,153
22,678 17,008
Non-current liabilities
Trade and other payables 3,510 3,679
Deferred tax liabilities 9,593 7,438
Lease liabilities 8,691 8,707
21,794 19,824
------------------------------------------- ------------ --------------------------------
Total liabilities 44,472 36,832
------------------------------------------- ------------ --------------------------------
Net assets 236,622 212,677
------------------------------------------- ------------ --------------------------------
Equity
Share capital 10,843 10,804
Share premium 37,269 36,996
Share-based payments reserve 15,711 13,180
Investment in own shares (167) (164)
Share-based payments deferred tax reserve 531 933
Other reserve 1,531 1,531
Hedging reserve (1,519) (21)
Translation reserve 5,004 (1,936)
Retained earnings 167,419 151,354
------------------------------------------- ------------ --------------------------------
Equity attributable to equity holders
of the parent 236,622 212,677
------------------------------------------- ------------ --------------------------------
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
deferred
capital premium payments shares tax reserve reserve reserve earnings Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------ -------------- ------------------ -------------- ----------- ---------------- --------------- -------- ------------ -------------- --------------
At 1 January 2021
(Audited) 10,769 36,288 11,142 (162) 430 1,531 1,237 3,258 137,718 202,211
------------------ -------------- ------------------ -------------- ----------- ---------------- --------------- -------- ------------ -------------- --------------
Consolidated
profit
for the year to
31 December 2021 - - - - - - - - 17,481 17,481
Other
comprehensive
expense - - - - - - (1,258) (5,194) - (6,452)
------------------ -------- ------------ -------------- --------------
Total
comprehensive
expense - - - - - - (1,258) (5,194) 17,481 11,029
------------------ -------------- ------------------ -------------- ----------- ---------------- --------------- -------- ------------ -------------- --------------
Share-based
payments - - 1,979 - 503 - - - - 2,482
Share options
exercised 35 708 59 - - - - - - 802
Shares purchased
by EBT - - - (366) - - - - - (366)
Shares sold by
EBT - - - 364 - - - - - 364
Dividends paid - - - - - - - - (3,845) (3,845)
--------------
At 31 December
2021 (Audited) 10,804 36,996 13,180 (164) 933 1,531 (21) (1,936) 151,354 212,677
------------------ -------------- ------------------ -------------- ----------- ---------------- --------------- -------- ------------ -------------- --------------
Consolidated
profit for the
year to 31
December
2022 - - - - - - - - 20,406 20,406
Other
comprehensive
(expense)/income - - - - - - (1,498) 6,940 - 5,442
------------------ -------------- ------------------ -------------- ----------- ---------------- --------------- -------- ------------ -------------- --------------
Total
comprehensive
(expense)/income - - - - - - (1,498) 6,940 20,406 25,848
------------------ -------------- ------------------ -------------- ----------- ---------------- --------------- -------- ------------ -------------- --------------
Share-based
payments - - 2,439 - (402) - - - - 2,037
Share options
exercised 39 273 92 - - - - - - 404
Shares purchased
by EBT - - - (392) - - - - - (392)
Shares sold by
EBT - - - 389 - - - - - 389
Dividends paid - - - - - - - - (4,341) (4,341)
--------------
At 31 December
2022 (Unaudited) 10,843 37,269 15,711 (167) 531 1,531 (1,519) 5,004 167,419 236,622
------------------ -------------- ------------------ -------------- ----------- ---------------- --------------- -------- ------------ -------------- --------------
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited) (Audited)
Year ended Year ended
31 December
31 December 2022 2021
Note GBP'000 GBP'000
---------------------------------------- ------- ---------------- -----------
Cash flows from operating activities
Operating profit 24,890 22,998
Adjustments for:
Depreciation 4,049 3,893
Amortisation - acquired intangible
assets 3,414 3,179
- software intangibles 502 529
- development costs 879 1,247
(Increase)/decrease in inventories (7,087) 941
Increase in trade and other receivables (596) (1,769)
Increase in trade and other payables 1,711 2,105
Share-based payments expense 2,439 1,979
Taxation paid (3,324) (4,077)
Net cash inflow from operating
activities 26,877 31,025
---------------------------------------- ------- ---------------- -----------
Cash flows from investing activities
Purchase of software (73) (254)
Capitalised research and development (6,152) (4,441)
Purchases of property, plant and
equipment (3,739) (1,768)
Disposal of property, plant and
equipment 46 53
Interest received 820 84
Acquisition of subsidiaries net
of cash 7 (2,781) -
Net cash used in investing activities (11,879) (6,326)
---------------------------------------- ------- ---------------- -----------
Cash flows from financing activities
Dividends paid (4,341) (3,845)
Repayment of principal under lease
liabilities (1,295) (1,281)
Repayment of loan 7 (331) -
Issue of equity shares 266 723
Shares purchased by EBT (392) (366)
Shares sold by EBT 389 364
Interest paid (617) (700)
Net cash used in financing activities (6,321) (5,105)
---------------------------------------- ------- ---------------- -----------
Net increase in cash and cash
equivalents 8,677 19,594
Cash and cash equivalents at
the beginning of the year 72,965 53,829
Effect of foreign exchange rate
changes 620 (458)
Cash and cash equivalents at
the end of the year 82,262 72,965
---------------------------------------- ------- ---------------- -----------
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 02867684). 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
2022 comprise the Company and its subsidiaries (together referred
to as the "Group").
The Group is primarily involved in the design, development and
manufacture of innovative tissue healing technology, focused on
quality outcomes for patients and value for payers The Group has a
wide range of surgical products including tissue adhesives,
sutures, haemostats, internal fixation devices and internal
sealants, which it markets under its brands LiquiBand(R) ,
RESORBA(R) , LiquiBandFix8(R) and Seal-G(R) . The Group also
supplies wound care dressings such as silver alginates, alginates
and foams through its ActivHeal(R) brand as well as under white
label.
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 2021 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:
-- Interest Rate Benchmark Reform (Amendments to IFRS 9, IAS 39 and IFRS7, IFRS4 and IFRS16)
-- Onerous Contracts - Cost of Fulfilling a Contract (Amendments to IAS37)
-- Property, Plant and Equipment: Proceeds before Intended Use (Amendments to IAS 16)
-- Annual Improvements to IFRS Standards 2018-2020 (Amendments
to IFRS1, IFRS9, IFRS16 and IAS 41); and
-- References to Conceptual Framework (Amendments to IFRS3)
While the financial information included in this preliminary
announcement has been prepared in accordance with the recognition
and measurement criteria of international accounting standards and
International Financial Reporting Standards (IFRSs) as adopted by
the UK, 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 2023.
The financial information set out in the announcement does not
constitute the Group's statutory accounts for the years ended 31
December 2022 or 31 December 2021. The financial information for
the year ended 31 December 2021 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 2022 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 2021.
Going concern
With regards to the Group's financial position, it had cash and
cash equivalents at the 31 December 2022 of GBP82.3 million. In
December 2018, the Group entered an unsecured, multi-currency,
credit facility for GBP80 million which was undrawn in 2022 and
expired in December 2022. The Group has opted not to renew the
facility.
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.
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 2022 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 31 December
2022 Surgical Woundcare Consolidated
(unaudited)
GBP'000 GBP'000 GBP'000
------------------------------- --------- ---------- -------------
Revenue
External sales 74,861 49,469 124,330
Result
------------------------------- --------- ---------- -------------
Adjusted segment operating
profit 21,802 7,632 29,434
Amortisation of acquired
intangibles (2,469) (945) (3,414)
------------------------------- --------- ---------- -------------
Segment operating
profit 19,333 6,687 26,020
Unallocated expenses (1,130)
Operating profit 24,890
Finance income 1,691
Finance costs (671)
------------------------------- --------- ---------- -------------
Profit before tax 25,910
Tax (5,504)
------------------------------- --------- ---------- -------------
Profit for the year 20,406
------------------------------- --------- ---------- -------------
Year ended 31 December
2022 Surgical Woundcare Consolidated
(Unaudited)
Other information GBP'000 GBP'000 GBP'000
------------------------------- --------- ---------- -------------
Capital additions:
Software intangibles 34 39 73
Development costs 4,617 1,535 6,152
Property, plant and
equipment 2,258 1,481 3,739
Depreciation and amortisation (5,759) (3,085) (8,844)
------------------------------- --------- ---------- -------------
At 31 December 2022
Statement of Financial
Position
Assets
Segment assets 190,456 90,638 281,094
Unallocated assets -
------------------------------- --------- ----------
Consolidated total
assets 281,094
------------------------------- --------- ---------- -------------
Liabilities
Segment liabilities 29,786 14,686 44,472
------------------------------- --------- ---------- -------------
Year ended 31 December 2021 Surgical Woundcare Consolidated
(audited)
GBP'000 GBP'000 GBP'000
----------------------------------------- ----------- ---------- -------------
Revenue
External sales 64,630 43,971 108,601
Result
----------------------------------------- ----------- ---------- -------------
Adjusted segment operating
profit 20,303 6,594 26,897
Amortisation of acquired intangibles (2,005) (1,174) (3,179)
----------------------------------------- ----------- ---------- -------------
Segment operating profit 18,298 5,420 23,718
Unallocated expenses (720)
-------------
Operating profit 22,998
Finance income 84
Finance costs (1,098)
----------------------------------------- ----------- ---------- -------------
Profit before tax 21,984
Tax (4,503)
----------------------------------------- ----------- ---------- -------------
Profit for the year 17,481
----------------------------------------- ----------- ---------- -------------
Year ended 31 December 2021 Surgical Woundcare Consolidated
(audited)
----------------------------------------- ----------- ---------- -------------
Other information GBP'000 GBP'000 GBP'000
----------------------------------------- ----------- ---------- -------------
Capital additions:
Software intangibles 145 109 254
Development costs 2,922 1,519 4,441
Property, plant and equipment 1,028 740 1,768
Depreciation and amortisation (5,579) (3,269) (8,848)
----------------------------------------- ----------- ---------- -------------
At 31 December 2021
Statement of Financial Position
Assets
Segment assets 159,442 89,944 249,386
Unallocated assets 123
----------------------------------------- ----------- ----------
Consolidated total assets 249,509
----------------------------------------- ----------- ---------- -------------
Liabilities
Segment liabilities 22,651 14,181 36,832
----------------------------------------- ----------- ---------- -------------
Geographic segments
The Group operates in the UK, The Netherlands, Germany, the
Czech Republic, France and Israel, with a sales office located in
Russia, as a distributor in Austria, 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 2022 2021
GBP'000 GBP'000
-------------------------- ------------------ ----------------
United Kingdom 19,960 18,454
Germany 20,780 20,863
Rest of Europe 32,519 22,913
United States of America 40,807 36,712
Rest of World 10,264 9,659
---------------------------- ------------------ ----------------
124,330 108,601
-------------------------- ------------------ ----------------
The following table provides an analysis of the Group's total
assets by geographical location:
-----------------------------------------------------------------------
(Unaudited) (Audited)
As at 31 December 2022 2021
GBP'000 GBP'000
------------------------------------ ---------------- -------------
United Kingdom 151,817 142,056
Germany 78,877 67,389
France 11,934 9,674
Rest of Europe 16,670 7,853
United States of America 451 1,984
Israel 21,345 20,553
-------------------------------------- ---------------- -------------
281,094 249,509
------------------------------------ ---------------- -------------
4. Operating profit
(Unaudited) (Audited)
Year ended 31 December 2022 2021
GBP'000 GBP'000
------------------------------------------------------------ ------------------ ----------------
Operating profit is arrived at after charging/(crediting):
Depreciation of property, plant and equipment 4,049 3,893
Amortisation of:
- acquired intangible assets 3,414 3,179
- software intangibles 502 529
- development costs 879 1,247
Research and development costs expensed
excluding regulatory costs 4,323 3,841
Cost of inventories recognised as expense 50,663 47,530
Write down of inventories expensed 251 1
Staff costs 46,065 39,691
Net foreign exchange loss/(gain) 1,683 (2,017)
------------------------------------------------------------- ------------------ ----------------
5. Taxation
(Unaudited) (Audited)
Year ended 31 December 2022 2021
GBP'000 GBP'000
-------------------------------------------- ------------ --------------
a) Analysis of charge for the year
Current tax:
Tax on ordinary activities - current
year 5,655 4,936
Tax on ordinary activities - prior
year 6 (323)
--------------------------------------------- ------------ --------------
5,661 4,613
Deferred tax:
Tax on ordinary activities - current
year (84) (490)
Tax on ordinary activities - prior
year (73) (190)
Effect of increase in UK corporation
tax rates to 25% - 570
--------------------------------------------- ------------ --------------
(157) (110)
-------------------------------------------- ------------ --------------
Tax charge for the year 5,504 4,503
--------------------------------------------- ------------ --------------
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 2022 2021
GBP'000 GBP'000
-------------------------------------------- ------------ --------------
b) Factors affecting tax charge
for the year
Profit before taxation 25,910 21,984
--------------------------------------------- ------------ --------------
Profit multiplied by the weighted
average Group tax rate of 22.8%
(2021: 23.0%) 5,911 5,053
Effects of:
Net expenses not deductible for
tax purposes and other timing differences 243 7
Patent Box Relief (554) (652)
Utilisation of trading losses (269) -
Net impact of deferred tax on capitalised
development costs and R&D relief 32 (123)
Share-based payments 208 161
Adjustments in respect of prior
year - current tax 6 (323)
Adjustments in respect of prior
year and rate changes - deferred
tax (73) 380
Taxation 5,504 4,503
--------------------------------------------- ------------ --------------
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 2022 2021
Number of shares '000 '000
----------------------------------------------- ------------ ----------
Weighted average number of ordinary shares
for the purposes of basic earnings per
share 216,512 215,677
----------------------------------------------- ------------ ----------
Effect of dilutive potential ordinary shares:
share options, deferred share bonus, LTIPs 2,969 2,635
----------------------------------------------- ------------ ----------
Weighted average number of ordinary shares
for the purposes of diluted earnings per
share 219,481 218,312
----------------------------------------------- ------------ ----------
(Unaudited) (Audited)
2022 2021
GBP'000 GBP'000
----------------------------------------------- ------------ ----------
Profit for the year attributable to equity
holders of the parent 20,406 17,481
Amortisation of acquired intangible assets 3,414 3,179
Movement in long-term acquisition liabilities (840) 426
Adjusted profit for the year attributable
to equity holders of the parent 22,980 21,086
----------------------------------------------- ------------ ----------
(Unaudited) (Audited)
2022 2021
pence pence
----------------------------------------------- ------------ ----------
Basic EPS 9.42 8.11
Diluted EPS 9.30 8.01
Adjusted basic EPS 10.61 9.78
Adjusted diluted EPS 10.47 9.66
----------------------------------------------- ------------ ----------
7. Acquisition of AFS
On 28 April 2022, the Group acquired the entire issued share
capital of AFS Medical GmbH, an Austria-based distributor of
minimally invasive surgical devices.
In the eight month period from acquisition to 31 December 2022,
AFS contributed GBP3.7 million of net revenue to the Group and
GBP0.2 million of operating profit. In addition, amortisation of
intangible assets of GBP0.3 million was recorded within the Group
as a result of the acquisition.
GBP'000
------------------------------------ ------------
Identifiable net assets acquired
Customer related intangible assets 3,424
Marketing intangible assets 524
Property, plant and equipment 242
Trade and other receivables 296
Inventory 845
Cash and cash equivalents 42
Trade and other payables (1,294)
Lease liabilities (226)
Borrowings (331)
Borrowings from AMS (2,526)
Deferred tax on intangible asset (986)
Arising on acquisition
Goodwill 1,452
------------------------------------ ------------
Total net assets 1,462
------------------------------------ ------------
Borrowings from AMS arose as funds were advanced prior to
completion of the acquisition to repay external funding. These
borrowings are now eliminated on consolidation. GBP0.3 million of
borrowings that existed at the date of acquisition have been repaid
prior to 31 December 2022 as disclosed in the Condensed
Consolidated Statement of Cash flows.
Satisfied by GBP'000
------------------------------ --------
Cash consideration 297
Contingent consideration 1,165
------------------------------ --------
1,462
------------------------------ --------
Net cash flow on acquisition GBP'000
------------------------------ --------
Cash consideration 297
Cash acquired (42)
------------------------------ --------
255
------------------------------ --------
Contingent consideration arose on the acquisition in respect of
up to EUR1.5 million which is payable subject to EBITDA delivery in
2022-2024. GBP1.2 million is the estimated fair value of it as at
the acquisition date.
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 31 December
2022 with the exception of the acquisition of Connexicon Medical
Limited, announced in February 2023, for initial consideration of
EUR7 million and with further deferred payments dependent on the
delivery of future research & development, regulatory and
commercial milestones.
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.
END
FR JIMTTMTABTAJ
(END) Dow Jones Newswires
March 15, 2023 03:00 ET (07:00 GMT)
Advanced Medical Solutions (AQSE:AMS.GB)
Historical Stock Chart
From Nov 2024 to Dec 2024
Advanced Medical Solutions (AQSE:AMS.GB)
Historical Stock Chart
From Dec 2023 to Dec 2024
