AMS reports higher revenue and lower profit, proposes fresh acquisition

Advanced Medical Solutions unveiled its unaudited preliminary results for 2023 on Wednesday, alongside a significant acquisition announcement.

The AIM-traded firm reported a 2% increase in group revenue to £126.2m for the year.

Despite challenges such as reduced royalties and a temporary dip in US LiquiBand revenue, AMS saw growth, particularly in its surgical business unit, which experienced a 6% increase in revenue to £79.1m.

Adjusted profit before tax decreased 9% to £25.9m, however, reflecting margin impacts from revenue fluctuations.

Operationally, AMS reported resilience and progress, with FDA approval for LIQUIFIX, successful clinical trials for SEAL-G, and the acquisition of Syntacoll and Connexicon taking place during the year.

AMS also initiated a strategic route-to-market shift for US LiquiBand, resulting in accelerated growth projections for 2024.

“I am very pleased with the progress we made in 2023 with a number of key initiatives setting a strong foundation for growth for the next five years,” said chief executive officer Chris Meredith.

“The recently signed US distribution agreements are already having a positive impact on the LiquiBand franchise.”

Meredith said market feedback through the firm’s new US partner for LIQUIFIX validated the confidence it had in the commercial potential for the product.

“Outside the US, we continue to make excellent progress as we strengthen our position in established markets and drive growth through geographic expansion.”

In a transformative move, AMS also announced the proposed acquisition of Peters Surgical for total maximum cash of €141.4m (£121m).

The company said the strategic acquisition would strengthen its global position by integrating Peters Surgical's specialty surgical sutures, mechanical hemostasis, and internal cyanoacrylate devices into its portfolio.

Peters Surgical, generating €84m in revenue in the 12 months ended 31 December 2023, would bolster AMS's capabilities in tissue repair and skin closure, the board explained.

The acquisition, structured with an initial cash payment of €132.5m and additional earnouts, was expected to yield significant long-term benefits, including enhanced sales capabilities, geographic expansion, and synergistic opportunities.

Expected to close by June, the transaction was projected to deliver high single-digit earnings accretion in its first full year, aligning with AMS's strategic vision for growth.

“Peters Surgical is an ideal fit for AMS in terms of its complementary expertise, global reach and potential for synergies with AMS's existing portfolio,” Chris Meredith added.

“As well as broadening our portfolio, AMS will benefit from the shared capabilities of the two companies, including direct sales channels, distribution networks, and manufacturing locations.

“We're thrilled to have secured such a transformational deal which aligns perfectly with our acquisition strategy.”

At 1145 GMT, shares in Advanced Medical Solutions Group were up 1.66% at 214p.

Reporting by Josh White for Sharecast.com.