19 March 2025

 

Advanced Medical Solutions Group plc

(“AMS” or the “Group” or the “Company”)

 

Unaudited preliminary results for the year ended 31 December 2024

 

~ Strong underlying growth maintained, and excellent progress made integrating recent acquisitions ~

 

Winsford, UK: Advanced Medical Solutions Group plc (AIM: AMS), a world-leading specialist in tissue-healing technologies, today announces its unaudited preliminary results for the year ended 31 December 2024.

 

Financial Summary:

 

	2024	2023	Reported change	Change at constant currency¹	Growth excluding acquisitions5
Revenue (£ million)	177.5	126.2	+41%	+43%	+10%
Adjusted Measures
Adjusted² EBITDA (£ million)	40.2	29.7	+35%
Adjusted² EBITDA margin	22.6%	23.5%	-0.9pp
Adjusted² profit before tax (£ million)	29.4	25.9	+14%
Adjusted² profit before tax margin	16.6%	20.5%	-3.9pp
Adjusted3 diluted earnings per share (p)	10.45	9.05	+16%
Reported Measures
Profit before tax (£ million)	9.8	21.2	-54%
Profit before tax margin	5.5%	16.8%	-11.2pp
Diluted earnings per share (p)	3.25	7.25	-55%
Net operating cash flow (£ million)	19.5	12.3	+58%
Net (debt)/cash4 (£ million)	(55.8)	60.2	-193%
Proposed full year dividend per share (p)	2.60	2.36	+10%

 

Business Highlights (including post Period end):

 

AMS is pleased to report Full Year 2024 results in line with consensus forecasts and excellent progress in integrating the recent acquisitions of Peters Surgical and Syntacoll.  

 

Operational

·      Successful implementation of the new route to market strategy in late 2023 has resulted in strong growth from US LiquiBand^® throughout 2024.  

 

·      Transformational acquisition of Peters Surgical SAS (“Peters Surgical”) at an enterprise value of €132.5 million (£113 million) was completed on 1 July 2024. The acquisition added £37.2 million of revenue from the July acquisition date.

 

·      Acquisition of Syntacoll GmbH (“Syntacoll”) for €1 million on 1 March 2024, a specialist manufacturer of drug-eluting collagens has significantly strengthened the capacity and capability of the Group’s existing Biosurgical business. The acquisition added £5.6 million of revenue from the March acquisition date.

 

·      The full in-market launch of LIQUIFIX^TM, the first atraumatic hernia fixation device in the US, resulted in better-than-expected initial orders. On the back of major Group Purchasing Organisation (“GPO”) approvals, accelerated in-market growth is expected in 2025 and record monthly end user sales were recorded in January and February 2025.

 

 

Financial

·      Group revenue increased by 43% at constant currency to £177.5 million (2023: £126.2 million), driven by strong growth in US LiquiBand^®, other key surgical product categories and the acquisitions of Peters Surgical and Syntacoll. Excluding both acquisitions, group revenue increased by 10% at constant currency.

 

·      Adjusted profit before tax increased by 14% to £29.4 million (2023: £25.9 million) and reported profit before tax decreased by 54% to £9.8 million (2023: £21.2 million) as a result of acquisition and integration costs.

 

·      Net debt at 31 December 2024 stood at £55.8 million (2023: Net cash of £60.2 million) following the acquisition of Peters Surgical.

 

·      Investment in R&D increased to £12.9 million (2023: £12.6 million), representing 7% of revenues (2023: 10%). Whilst the gross investment in R&D has increased following the addition of Peters Surgical, R&D expenditure as a proportion of revenue has been diluted by the acquisition and by reduced Medical Device Regulation (“MDR”) related investment.  

 

·      Surgical Business Unit revenues (excluding Peters Surgical) increased to £98.6 million (2023: £79.1 million), an increase of 28% at constant currency, driven by strong performances from all key product categories.

 

·      Woundcare Business Unit revenues decreased to £41.8 million (2023: £47.1 million), a decrease of 11% at reported and constant currency due to a number of factors. Strategic initiatives within the Woundcare business are being successfully implemented, which are expected to positively impact margins in 2025. 

 

·      Reflecting management’s ongoing confidence in the Group’s outlook, the Board proposes an increased final dividend of 1.83p per share (2023: 1.66p) bringing the total proposed dividend to 2.60p per share (2023: 2.36p).

 

 

Commenting on the results Chris Meredith, Chief Executive Officer of AMS, said: “I am very pleased to report such a strong set of results during a year where AMS went through such a significant transformation. The integration of both Peters Surgical and Syntacoll has established the Group as a larger, more diverse tissue-healing specialist with a broader geographic reach. 2025 has started well and we remain confident that the strong, underlying momentum of our core business, combined with the broader portfolio, synergies and benefits from the acquisitions, will drive future strong topline growth and greater profitability.”

 

 

 

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.     Reconciled in the Financial Review

3.     Reconciled in note 6 of the financial information

4.     Net debt consists of cash and cash equivalents of £17.0 million and £72.8 million of borrowings, excluding the impact of IFRS16 as reconciled in note 7 of the financial information. (2023: £60.2 million of cash and £nil debt)

5.     Growth excluding acquisitions excludes the impact of acquisitions in the year on a constant currency basis

 

– 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
ICR Healthcare	Tel: +44 (0) 20 3709 5700
Mary-Jane Elliott / Lucy Featherstone	AMS@icrhealthcare.com
Investec Bank PLC (NOMAD & Broker)	Tel: +44 (0) 20 7597 5970
Gary Clarence / David Anderson

 

About Advanced Medical Solutions Group plc – see www.admedsol.com

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^®, RESORBA^®, LiquiBandFix8^®, LIQUIFIX™, Peters Surgical, Ifabond, Vitalitec and Seal-G^®. AMS also supplies wound care dressings such as silver alginates, alginates and foams through its ActivHeal^® brand as well as under white label. Since 2019, the Group has made seven 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, Connexicon, an Irish tissue adhesives specialist, Syntacoll, a German specialist in collagen-based absorbable surgical implants and Peters Surgical, a global provider of specialty surgical sutures, mechanical haemostasis and internal cyanoacrylate devices.

 

AMS’s products, manufactured in the UK, Germany, France, the Netherlands, Thailand, India, 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, Austria, France, Poland, Benelux, India, 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 1,500 employees. For more information, please see www.admedsol.com.

 

-    

 

Chief Executive’s Review

 

Summary and Outlook

Growth across all surgical product categories has resulted in a strong financial performance for the Group in the twelve months to December 2024, including a significant contribution from Peters Surgical from 1 July. The integration of Peters Surgical and Syntacoll has been a key focus in the second half of the year, and excellent progress has been made, supported by detailed operational plans to deliver further synergies and cost efficiencies from the enlarged Group over the next three years. 

 

The business has continued to perform well in Q1 2025, and the Board’s expectations are in line with current consensus forecasts for the full year. As more revenue and operational synergies are generated, the Board expects further growth across the business in 2026 and 2027.

 

Surgical Business Unit

 

The Surgical Business Unit includes tissue adhesives, sutures, biosurgical devices and internal fixation devices marketed under the AMS brands LiquiBand^®, RESORBA^®, LiquiBandFix8^®, LIQUIFIX^TM, Peters Surgical, Ifabond, Vitalitec and Seal-G^®.

 

Organic growth in the Surgical Business was driven by strong performances from LiquiBand^® in the US, Traditional Closure, Other Distributed and Internal Fixation products. Revenue increased to £98.6 million (2023: £79.1 million) during the Period, an increase of 28% on a constant currency and 25% on a reported basis.

 

Surgical Business Unit	2024 £ million	2023 £ million	Reported Growth	Change at constant currency
Advanced Closure	43.4	34.6	25%	28%
Internal Fixation and Sealants	6.4	5.0	28%	30%
Traditional Closure	19.9	18.1	10%	15%
Biosurgical Devices	22.6	16.4	38%	42%
Other Distributed	6.3	5.0	26%	30%
Subtotal (excluding Peters Surgical)	98.6	79.1	25%	28%
Peters Surgical	37.2	–	–	–
Total	135.8	79.1	72%	–

 

Advanced Closure

LiquiBand^® 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	2024 £ million	2023 £ million	Reported Growth	Change at constant currency
Americas	26.9	18.2	48%	52%
Rest of World	16.5	16.4	1%	2%
Total	43.4	34.6	25%	28%

 

LiquiBand^® revenues increased in the Period by 28% on a constant currency basis and 25% on a reported currency basis driven by strong US growth.

 

New agreements, greater incentives and more brand differentiation for the Group’s US partners were successfully implemented towards the end of 2023 and made a significant impact on Advanced Closure US revenue growth during the Period. Sales increased to £26.9 million (2023: £18.2 million), 52% at constant currency and 48% on a reported basis. This positive performance during the Period reflects improved partner engagement under the new distribution agreements, as well as the strength of the pipeline of new business. Reported sales were positively impacted by re-stocking of one of the Group’s partners in H1 and the phasing of orders in Q4 related to some of the LiquiBand^® products. This is expected to impact reported growth in the first half of 2025.  

 

 

Outside the US, end user sales were not fully reflected in reported revenue due to the phasing of orders in some key markets. Stronger reported growth in Rest of World sales is expected to return this year.

 

Internal Fixation and Sealants

LiquiBandFix8^®/LIQUIFIX^TM is used to fix hernia meshes placed inside the body with accurately delivered individual drops of cyanoacrylate adhesive, instead of traditional sutures, tacks and staples.

Global supply of the LiquiBandFix8^®/LIQUIFIX^TM devices was affected by a supplier-driven quality issue in the year and although it has since been resolved, the issue did impact sales during 2024. Despite this, LiquiBandFix8^®/LIQUIFIX^TM revenues increased by 30% on a constant currency basis and by 28% on a reported basis to £6.4 million (2023: £5.0 million), following the successful US launch through our distribution partner TELA Bio.  

Having already obtained listings for LIQUIFIX^TM from two important US GPOs, the company now expects to receive approval from the largest and most significant GPO by the end of March with an anticipated go-live date in mid-2025. An extensive training programme for TELA Bio’s specialist hernia sales force was completed during the Period, and the initial response from surgeons has been positive. US pre-launch orders in H1 2024 were ahead of expectations and 2025 has started positively, with record monthly end user sales in January and February 2025. It is worth noting that the initial stocking coupled with later than expected GPO approvals in 2024 and 2025 will impact overall reported sales in 2025, albeit we do expect to be reporting continued strong end user growth.

 

The pancreatic study for our novel, internal, biological sealant, SEAL-G^®, continues to progress with interim results expected mid-2025; as does the development of a next generation device that will remove the necessity for a gas supply connection and regulator. We expect to be able to give a meaningful update on these two workstreams at the time of our 2025 interim results. Since our acquisition of Sealantis in 2019, the company has been investing in the development of the SEAL-G^® product and the amortised carrying value of the capitalised development costs stands at £6.8 million at 31 December 2024.

 

Traditional Closure

RESORBA^® branded Absorbable and Non-absorbable Suture ranges are used in general surgery and a wide range of surgical specialties including dental and ophthalmic surgery. Revenues (excluding Peters Surgical sutures) grew strongly during the Period, increasing by 10% to £19.9 million and by 15% at constant currency (2023: £18.1 million). The brand continued to generate good growth in its core German market and across multiple other markets as hospital appetite for progressing suture conversions continues to build.

 

Biosurgical Devices

Biosurgical Devices comprise antibiotic-loaded collagen sponges, collagen membranes and cones, oxidised cellulose, synthetic bone substitutes and bio-absorbable screws. Revenues increased 38% to £22.6 million (2023: £16.4 million) and 42% at constant currency, following the acquisition of Syntacoll which contributed £5.6 million during the Period.

 

As reported in September 2024, technical and manufacturing issues at the Nuremberg facility had restricted the Group’s ability to fulfil all RESORBA^® collagen customer orders during the first half. The integration of Syntacoll’s facilities and its expertise has addressed these issues and supply of product has improved during the second half. However, this has resulted in end user demand not being fully reflected in reported sales for the Period.

 

Syntacoll’s expertise has enabled the Group to accelerate its regulatory pathway to access the substantial opportunity for its distinctive collagen portfolio in the lucrative US market. The first US collagen approval, for a dental application, is expected in 2026. Multiple avenues are also being explored to obtain US approval of our wider antibiotic loaded collagen portfolio within the next few years.

 

The Group’s innovative next-generation Freeze Dried Bone Substitute (FDBS) presents another considerable opportunity given its ability to significantly improve bone re-growth through its highly differentiated cohesiveness, mouldability and capacity to mix with various biological fluids and compounds. AMS is targeting US 510(k) submission at the end of 2025 with approval expected around of the end of 2026. Launch into Europe is expected to be on a similar timeline.

 

Other Distributed Products      

The Other Distributed category comprises bought-in minimally invasive access ports and laparoscopic instruments predominately sold by AFS. Revenues increased to £6.3 million during the Period (2023: £5.0 million), growth of 26% on a reported basis and 30% at constant currency.

 

Peters Surgical           

The acquisition of Peters Surgical on 1 July 2024 has contributed revenue of £37.2 million to the AMS Group during the Period. As anticipated, the business ended the year strongly, generating sales growth of 8%, for continuing products, in the second half, compared with proforma 2023 results with good year-on-year growth in sutures, glues and with its innovative Vascular Temporary Occlusion (VTO) portfolio.

 

Integration

The organisational integration of the AMS and Peters Surgical teams has been completed, with the establishment of a single Group-wide team for all key functions including Sales, Marketing and R&D.

 

The program of delivery for commercial synergies is well underway with some due to start in 2025 and others expected to follow in the next few years depending on contractual restrictions.

 

In mid-2024, the Group created a dedicated integration team to deliver the other key synergies relating to branding, product portfolio, manufacturing and supply chain of sutures. This team consists of individuals with key capabilities from both AMS and Peters Surgical, is supported by external consultants and will be fully focused on building and delivering critical elements of the integration plan.

 

To maximise the significant commercial opportunity, it will be necessary to invest in increased manufacturing capacity and to enable the supply of alternative suture winding cards to allow deeper penetration of the substantial US market. Good progress was made in the Period, and the Group remains on track to deliver the majority of the planned operational synergies from early 2027.

 

Further 510(k) approvals of Peter Surgical suture ranges were granted in 2024, leaving one final suture family awaiting US approval which is expected during 2025, paving the way for the US launch before the end of the year. 

 

In addition, a development project has been started to combine the IFABOND^® portfolio of internal hexyl cyanoacrylate adhesives with AMS’s more precise delivery device technology which will allow the improved portfolio to be optimised for use in a range of internal applications.

 

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^® label, plus a portfolio of specialist medical bulk materials including multi-layer woundcare and bio diagnostics products.  

Revenues decreased by 11% to £41.8 million (2023: £47.1 million) on a reported and constant currency basis due to ongoing and challenging market conditions and reducing royalties.

Since the announcement in September of AMS’s plans to restructure the Woundcare business by focusing on higher margin business and reducing investment in certain areas, excellent progress has been made and these initiatives are on track to positively impact margins from Q2 2025.  

Woundcare Business Unit	2024 £ million	2023 £ million	Reported Growth	Change at constant currency
Infection and Exudate Management	36.9	39.5	-7%	-6%
Other Woundcare	4.9	7.6	-36%	-35%
Total	41.8	47.1	-11%	-11%

 

Infection and Exudate Management

Infection and Exudate Management revenue decreased by 7% at reported currency and 6% at constant currency to £36.9 million (2023: £39.5 million), as the business implemented its strategy to focus on more profitable product categories.

 

Other Woundcare

Other Woundcare comprises royalties, fees and woundcare sealants. Revenue reduced by 36% at reported currency and by 35% at constant currency to £4.9 million (2023: £7.6 million) due to the continued reduction in royalty from Organogenesis following US reimbursement reviews announced in 2023.

 

Regulatory

Despite enforcement dates for the Medical Devices Regulation (MDR) being delayed until 2027-2028, AMS has already substantially completed its established schedule of work to meet the new standards. Consequently, capitalisation of regulatory costs is expected to start to decline in 2025.

 

Environmental, Social & Governance

The transformational acquisition of Peters Surgical has created the opportunity to leverage the considerable CSR program already established in the Peters Surgical group and to create an optimised combined ESG program for the enlarged group. This alignment will include combining emissions data for the two businesses and rebasing the initial carbon footprint for the enlarged group, progressing its Pathway to Net Zero project, which has a commitment date of 2045.

 

All sustainability activities are now being optimised and managed by a single team across the enlarged group.

 

On 18 March it was announced that Grahame Cook, Senior Independent Non-Executive Director, will become Non-Executive Chair on 31 March following Liz Shanahan’s decision to step down for personal reasons. In his new role, Grahame will retain his positions on the Audit, Nominations and Remuneration Committees. Grahame was appointed to the Board in February 2021 and has substantial global equity markets experience, having formerly worked as a managing director at UBS and joint Chief Executive of Panmure Gordon.

 

Stakeholders

On behalf of the Board, I would like to thank the Group’s staff, partners and other stakeholders, without whose help and commitment, the achievements of this year, and the years prior, would not have been possible.

 

 

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, adjusted EBITDA and adjusted earnings per share, allowing the impacts of exchange rate volatility, exceptional items, unwind of Inventory fair value accounting, amortisation, and the movement in long-term acquisition liabilities to be separately identified. Net debt/cash are an additional non-GAAP measure used.

 

Overview

Revenue increased by 43% at constant currency and by 41% at reported currency to £177.5 million (2023: £126.2 million).

 

Gross margin decreased to 52.2% (2023: 55.6%) whilst adjusted gross margin which excludes the impact of the fair value accounting on the acquisition of Peters Surgical results in a gross margin of 53.1% (2023: 55.6%). Despite the strong performance of US LiquiBand^® several factors are contributing to the reduced gross margin including the acquisition of Syntacoll which has had a dilutive impact as it currently achieves a significantly lower gross margin than the Group’s average and the reduced Organogenesis royalty. The addition of Peters Surgical has also had a slight dilutive impact as its gross margins are marginally below those of the AMS group.

 

As part of the IFRS3 acquisition accounting of Peters Surgical, the Inventory valuation has been increased by £1.7 million to its fair value. This increased Inventory valuation has resulted in higher cost of goods sold in the second half of the year and has been treated as an adjusted item.

 

Administration expenses before exceptional items increased to £69.0 million (2023: £50.7 million) due to the addition of Peters Surgical which added approximately £16 million of additional cost into the second half of the year and includes £3.2 million of Peters Surgical related amortisation of acquired intangible assets. The remaining increase in administration expenses in the year relates to increased sales and marketing activity and expenditure in Research, Development, Regulatory and Clinical as the Group continues to invest in growth opportunities.

 

 

Exceptional items
			(Unaudited)		Audited
			2024		2023
			£’000		£’000
Syntacoll			1,890		–
Risk Management			2,017		–
Peters acquisition-related			5,090		–
Peters integration activities			1,927		–
Total exceptional items			10,924		–

 

 

Exceptional items of £10.9 million were incurred in the year in relation to the acquisition and integration of Peters Surgical and Syntacoll. Given the significance of these costs in the year, in comparison to costs incurred for acquisitions in previous years, they have been disclosed separately. Syntacoll exceptional costs relate to legal fees, staff termination costs, an initial idle Period following when no manufacturing was undertaken and some integration related costs.  Risk management exceptional costs relate to foreign currency risk management costs to protect against adverse movements in the euro rate whilst the Group awaited FDI approval to complete the acquisition of Peters Surgical. Risk and warranty insurance was also obtained.

 

Acquisition related costs include costs for advisory services, legal, financial, tax, HR and operational due diligence services, as well as legal services relating to the share purchase agreement and related banking facility required as part of the acquisition funding.

 

Integration-related costs predominately relate to consultancy services to lead the integration project as well as the costs of an internal dedicated integration team and other relevant integration activities.

 

The Group incurred £12.9 million of gross R&D spend in the Period (2023: £12.6 million), representing 7.3% of sales (2023: 10.0%), maintaining 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 with the amount capitalised declining in the year as a result of the substantial MDR progress made.

 

R&D, Regulatory and Clinical expenditure
		2024	2023
	£’000		£’000
Total investment in Research and Development, Regulatory and Clinical	12,922		12,621
Of which:
Charged to the profit and loss account	8,807		6,405
Capitalised, to be amortised over 5-10 years	4,115		6,216

 

 

Amortisation of acquired intangible assets increased to £7.8 million (2023: £4.9 million) due to the acquisition of Peters Surgical in July 2024.  

 

Other Income remained consistent at £0.9 million (2023: £0.9 million) and relates to R&D claims in the UK and Ireland.

 

In the Period, finance income declined to £2.2 million (2023: £3.8 million), as the majority of funds held on deposit were used to fund the acquisition of Peters Surgical. Finance costs increased to £3.6 million (2023: £1.5 million) following the acquisition of Peters Surgical which was funded by an initial £80 million of borrowing. Finance costs are expected to reduce as SONIA rates are widely expected to reduce in the coming year and the Group repays its borrowings.

 

A net credit of £0.9 million (2023: £0.2 million credit) was recorded in relation to movements in long-term acquisition liabilities, primarily relating to deferred consideration and earnout from the Connexicon acquisition.

 

Adjusted EBITDA which consists of earnings before finance costs, tax, depreciation and amortisation as well as excluding exceptional items and the unwind of Inventory fair value accounting increased by 35% to £40.2 million (2023: £29.7 million) as a result of the addition of Peters Surgical.

 

 

Reconciliation of profit before tax to adjusted EBITDA
			(Unaudited)		Audited
			2024		2023
			£’000		£’000
Profit before tax			9,823		21,157
Finance income and costs			1,396		(2,275)
Amortisation			9,849		6,413
Depreciation			6,453		4,375
Exceptional items			10,924		–
Unwind of Inventory fair value accounting			1,726		–
Adjusted EBITDA			40,171		29,670

 

 

Adjusted profit before tax which excludes amortisation of acquired intangibles, exceptional items, unwind of Inventory fair valuer accounting and movements in long term liabilities recognised on acquisition, increased by 14% to £29.4 million (2023: £25.9 million) whilst the adjusted PBT margin decreased by 400 bps to 16.5% (2023: 20.5%) as a result of the dilutive impact of the Peters Surgical acquisition and associated borrowing.

 

Reported profit before tax decreased by 54% to £9.8 million (2023: £21.2 million) as a result of £10.9 million of exceptional items, the £1.7 million unwind of Inventory fair value accounting following the acquisition of Peters Surgical in the second half of the year and the addition of £2.9 million of additional amortisation on acquired intangibles as a result of the Peters Surgical acquisition.

 

 

Reconciliation of profit before tax to adjusted profit before tax
			(Unaudited)		Audited
			2024		2023
			£’000		£’000
Profit before tax			9,823		21,157
Amortisation of acquired intangibles			7,804		4,887
Exceptional items			10,924		–
Movement in long-term acquisition liabilities			(868)		(186)
Unwind of Inventory fair value accounting			1,726		–
Adjusted profit before tax			29,409		25,858

 

 

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 to 27.3% (2023: 24.9%) with the main driver behind the increase being acquisition costs, some of which are not tax deductible, and the annualised impact of the UK Corporation tax rate increase to 25%, effective 1 April 2023. These are partly offset by lower profits in Germany as a result of the reduced Organogenesis royalty. The tax rate in Germany is higher than the Group’s average tax rate and therefore a lower proportion of profit in Germany reduces the Group’s effective tax rate.

 

Adjusted diluted earnings per share increased by 16% to 10.45p (2023: 9.05p) and diluted earnings per share decreased by 55% to 3.25p (2023: 7.25p), reflecting the Group’s reduced earnings.

 

Reflecting its confidence in the Group’s prospects, the Board is proposing an increased final dividend of 1.83p per share (2023 final dividend: 1.66p), to be paid on 20 June 2025 to shareholders on the register at the close of business on 30 May 2025. This follows the interim dividend of 0.77p per share (2023 interim dividend: 0.70p) paid on 25 October 2024 and would, if approved, make a total dividend for the year of 2.60p per share (2023: 2.36p) an increase of 10%.

 

 

Operating result by business segment
Year ended 31 December 2024	Surgical	Woundcare
	£’000	£’000
Revenue	135,768	41,753
Segment operating profit	23,268	1,664
Amortisation of acquired intangibles	6,864	940
Adjusted segment operating profit6	30,132	2,604
Adjusted operating margin6	22.2%	6.2%
Year ended 31 December 2023
Revenue	79,093	47,117
Segment operating profit	16,041	4,374
Amortisation of acquired intangibles	3,944	943
Adjusted segment operating profit6	19,985	5,317
Adjusted operating margin6	25.3%	11.3%

 

^{Note 6: Adjusted for amortisation of acquired intangible assets and excludes exceptional items and the unwind of Inventory fair value accounting.}

^{Table is reconciled to statutory information in note 3 of the financial information.}

 

Surgical

Surgical revenues inclusive of Peters Surgical increased by 72% to £135.8 million (2023: £79.1 million) at reported currency. Adjusted operating margin decreased by 310 bps to 22.2% (2023: 25.3%) due to the dilutive impact of Peters Surgical at an operating margin level. Whilst Peters Surgical contributes significant sales, it only adds £4.5 million of adjusted operating profit. The previously mentioned impact on gross margin of the addition of low margin Syntacoll business is also impacting adjusted operating margin.

 

Woundcare

Woundcare revenues decreased by 11% to £41.8 million (2023: £47.1 million) at reported currency and constant currency. Adjusted operating margin decreased by 510 bps to 6.2% (2023: 11.3%) due to the factors noted in the Chief Executive’s review. We are confident that the actions taken will improve the business unit’s operating margin in 2025.

 

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 half of sales were invoiced in Euros and approximately one quarter were invoiced in US Dollar.

 

The Group estimates that a 10% movement in the £:US$ or £:€ exchange rate will impact Sterling revenues by approximately 2.5% and 4.4% respectively and, in the absence of any hedging, this would have an impact on the Group operating margin of 1.7% and 0.7% percentage points respectively.

 

Cash flow

Net cash inflow from operating activities in the Period was £19.5 million, an increase on the prior year (2023: £12.3 million) as a result of the acquisition of Peters Surgical. Further information on the acquisition impact of Peters Surgical is included in note 8.

 

Working capital increased during the year. Inventory cover decreased to 6.0 months of supply (2023: 7.1 months) partly due to the addition of Peters Surgical and Syntacoll. Excluding the impact of Peters Surgical and Syntacoll, Inventory levels were in-line with the prior year despite growing sales as the stock builds seen in prior years have been completed. Increasing levels of receivables is linked to the strong performance in the US although a number of large payments were received shortly after year-end inflating the year-end position. As a result, Debtor days has increased to 53 days (2023: 45 days).  Creditor days were in line with prior year at 35 days (2023: 35 days). Total payables increased by £14.0 million as a result of the addition of Peters Surgical and Syntacoll.

 

Net cash used in investing activities in the Period was £67.1 million as a result of the acquisition of Peters Surgical which resulted in investing cash outflows of £53.2 million (net of cash acquired). £5.5 million of cash outflows relating to payment of contingent consideration occurred and principally relates to achievement of milestones at Connexicon following receipt of FDA approval (2023: £7.4 million).

 

Capital investment in equipment, R&D and regulatory costs declined to £8.7 million (2023: £9.8 million) as a result of the reducing investment in MDR certification.

 

Cash outflow relating to taxation increased to £5.0 million (2023: £4.4 million) and included £1.1 million of taxation payments for Peters Surgical.

 

Net cash received from financing activities in the Period was £5.5 million (2023: used £13.6 million) which includes receipt of £79.3 million of borrowings in July 2024 as part of a facilities provided by the Group’s banks, NatWest and HSBC. £8.0 million was subsequently repaid before the end of the year resulting in a net inflow on these facilities of £71.3 million. £62.2 million of these borrowings was utilised to repay Peters Surgical loans as part of the cash-free, debt-free basis of the acquisition. Interest payments increased from £0.4 million to £4.0 million as a result of the new borrowing facilities. The Group did not purchase any of its own shares in the year (2023: £6.7 million).

 

The Group paid its final dividend for the year ended 31 December 2023 of £3.6 million in June 2024 (for the year ending December 2022, £3.3 million in June 2023), and its interim dividend for the six months ended 30 June 2024 of £1.6 million in October 2024 (for the 6 months ended 30 June 2023: £1.5 million in October 2023). No cash outflows relating to share purchases occurred during the year (2023: £6.7 million).

 

At the end of the Period, as a result of the above movements, the Group had net debt of £55.8 million (31 December 2023: net cash of £60.2 million) a movement of £116.0 million as a result of the Peters Surgical acquisition.

 

 

CONDENSED CONSOLIDATED INCOME STATEMENT
		(Unaudited)				(Audited)
Year ended 31 December		2024				2023
		Before Exceptional items	Exceptional items	Total		Before Exceptional items	Exceptional items	Total
			Note 8				Note 8
	Note	£’000	£’000	£’000		£’000	£’000	£’000
Revenue from continuing operations	3	177,521	–	177,521		126,210	–	126,210
Cost of sales		(84,903)	–	(84,903)		(56,070)	–	(56,070)
Gross profit		92,618	–	92,618		70,140	–	70,140
Distribution costs		(2,348)	–	(2,348)		(1,520)	–	(1,520)
Administration costs		(69,033)	(10,924)	(79,957)		(50,669)	–	(50,669)
Other income		906	–	906		931	–	931
Operating profit	4	22,143	(10,924)	11,219		18,882	–	18,882
Finance income		2,161	–	2,161		3,786	–	3,786
Finance costs		(3,557)	–	(3,557)		(1,511)	–	(1,511)
Profit before taxation		20,747	(10,924)	9,823		21,157	–	21,157
Income tax	5	(4,662)	1,981	(2,681)		(5,268)	–	(5,268)
Profit for the Period		16,085	(8,943)	7,142		15,889	–	15,889
Profit for the Period attributable to equity holders of the parent		16,037	–	7,094		15,889	–	15,889
Non-controlling interest		48	–	48		–	–	–
Earnings per share
Basic	6	7.48p	(4.17p)	3.31p		7.36p	–	7.36p
Diluted	6	7.35p	(4.10p)	3.25p		7.25p	–	7.25p
Adjusted diluted6	6	10.45p	(4.69p)	5.77p		9.39p	–	9.39p

 

 

^{Note 6: Reconciled in note 7 of the financial information.}

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
					(Unaudited)	(Audited)
					2024	2023
					£’000	£’000
Profit for the year					7,142	15,889
Exchange differences on translation of foreign operations					(6,177)	(3,126)
(Loss)/gain arising on cash flow hedges					(3,104)	3,984
Deferred tax credit /(charge) arising on cash flow hedges					664	(465)
Total other comprehensive (expense)/income for the year					(8,617)	393
Total comprehensive (loss)/income for the year attributable to equity holders of the parent					(1,475)	16,282

 

 

 

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

 

	(Unaudited)	(Audited)
	31 December 2024	31 December 2023
	£’000	£’000
Assets
Non-current assets
Intangible assets	99,412	55,864
Goodwill	115,384	80,435
Property, plant and equipment	45,871	29,601
Deferred tax assets	1,022	356
Derivative financial assets	–	520
Trade and other receivables	1,029	73
	262,718	166,849
Current assets
Inventories	55,259	36,046
Trade and other receivables	52,451	23,583
Current tax assets	1,233	388
Derivative financial assets	296	2,145
Cash and cash equivalents	17,039	60,160
	126,278	122,322
Total assets	388,996	289,171
Liabilities
Current liabilities
Trade and other payables	33,782	19,254
Derivative financial liabilities	261	–
Borrowings	5,421	–
Current tax liabilities	1,780	1,165
Lease liabilities	3,087	1,164
	44,331	21,583
Non-current liabilities
Trade and other payables	3,873	4,400
Derivative financial liabilities	474	–
Borrowings	67,428	–
Deferred tax liabilities	20,746	11,013
Lease liabilities	10,628	7,973
	103,149	23,386
Total liabilities	147,480	44,969
Net assets	241,516	244,202
Equity
Share capital	10,892	10,865
Share premium	37,525	37,473
Share-based payments reserve	21,747	18,649
Investment in own shares	(6,877)	(6,877)
Share-based payments deferred tax reserve	224	150
Other reserve	1,531	1,531
Hedging reserve	(440)	2,000
Translation reserve	(4,299)	1,878
Retained earnings	180,474	178,533
Equity attributable to equity holders of the parent	240,777	244,202
Non-controlling interest	739	–
Total equity	241,516	244,202