Advanced Medical Solutions jumps on takeover speculation as H1 profits rise

Shares in Advanced Medical Solutions jumped on Wednesday after the tissue-healing technologies specialist announced its interim results amid speculation that a private equity firm is circling the company.

According to a report in Sky News on Tuesday, Inflexion has been studying a takeover of AMS, though no discussions are said to have taken place. Sky also said "other private equity firms" were interested in the company.

The speculation came as AMS delivered an 8% increase in adjusted pre-tax profits to £14.8m in the six months to 30 June on revenues that were 8% higher at £68m.

AMS said it saw growth across all categories within the Surgical Business unit, which grew 23% to £48.4m overall, outweighing ongoing challenges in Woundcare which saw revenues drop 27% to £19.5m.

The board has now completed a strategic review of the Woundcare arm and "concluded that profitability of the unit can be improved by focusing on higher margin business and reducing investment in certain areas", AMS said in a statement.

"Whilst Woundcare has continued to struggle, we believe we have a pathway to improving its profitability," said chief executive Chris Meredith.

"We feel confident that our enlarged portfolio, greater geographic reach, the synergies that we believe can be established over the next three years, combined with the revitalised momentum established in the legacy AMS Surgical business has set us on a very strong trajectory for growth in the long-term."

The stock was up nearly 6% at 254.7p by 0947, following a 4% rise the previous session.