Final Results

Advanced Medical Solutions Grp PLC 28 March 2001 ADVANCED MEDICAL SOLUTIONS GROUP PLC Preliminary results for the year ended 31 December 2000 Winsford, 28 March 2001 Advanced Medical Solutions Group plc announces preliminary results for the year ended 31 December 2000. 2000 1999 ----- ----- Turnover £7.8m £6.2m Gross profit / (loss) £0.4m £(0.8)m Loss before taxation £(2.7)m £(5.2)m Basic loss per share (2.9)p (7.3)p Highlights for the year: - Turnover up by 26% to £7.8m (1999 : £6.2m) - Losses almost halved to £2.7m (1999 : £5.2m) - Operating cash outflow reduced by 53% to £1.7m (1999 : £3.6m) - Balance sheet improved with cash over £7m - Further significant partnerships agreed including Johnson & Johnson Consumer Products Company in North America - Technology position strengthened for future revenue stream in our two focus areas of delivery of actives and tissue engineering. Commenting on the results, Don Evans, Chief Executive of Advanced Medical Solutions Group plc said: 'We have been successful during 2000 in establishing a more secure financial platform for the development of the business. The partnerships we have now formed with major global players such as Novartis Consumer Health, Johnson & Johnson Consumer Products Company, Molnlycke Healthcare and Smith + Nephew / Beiersdorf are key in providing future growth. The progress we have made in developing our technology in delivery of actives and tissue engineering give me confidence that we can deliver high value products into a range of healthcare applications in the years ahead'. For further information, please contact: Advanced Medical Solutions Group plc Don Evans, Chief Executive Officer on 28 March Tel: 0207 457 2345 Mary Tavener, Finance Director thereafter Tel: 01606 863500 Gavin Anderson & Company Philip Ward Tel: 0207 457 2345 Charlotte Stone Chairman's Statement I am delighted to have taken over as Chairman at a time when the Group has started to realise its potential and is entering an exciting phase in its evolution. The financial improvement that has been achieved during the last year has put the Group firmly on track to achieve profitability. Financial Performance Group turnover has increased by 26% to £7.8m driven by strong growth in the Consumer Skincare business. The focus of the management team on reducing losses and cash burn resulted in a 48% reduction in loss to £2.7m, whilst the operating cash outflow position improved by 53% to £1.7m. This, together with continued tight control of working capital, puts the Group in a strong cash position going forward with £7m cash at 31 December 2000. Good progress continues to be made in improving manufacturing efficiencies with the Group achieving positive gross profit over 2000. Partnerships Increased volumes will continue to improve our gross margins going forward. Therefore, the partnerships we have developed with leading sales and marketing companies capable of providing growth are key. The recent addition of Johnson & Johnson Consumer Products Company as a partner is a significant step forward for the Group, as the strength of its first aid brands in North America complements the strength in Europe of the Novartis Consumer Health brands. Our strategy of focusing on securing relationships with high quality players is proving successful, which allows streamlining of the business at all levels. Technology The identification and delivery of proprietary new materials technology has been, and will remain, key to attracting major partners into strategic relationships, thus improving the value of the Group. By focussing our efforts and resources on areas where we can build upon our expertise and add value, we have considerably strengthened our position during the past year in actives/drug delivery and cell-fibre interactions for tissue engineering. Our strategy is to move from passive to active products which can accelerate tissue repair for woundcare and other healthcare applications. Relationships have been forged with leading academic institutions in the U.K. These collaborations together with the awarding of grants have served to validate our technology and are enabling us to progress longer-term research. Board Changes With the departure of James Noble owing to his increased commitments, I assumed the non-executive Chairman's role in January this year. In addition, the Board was strengthened by the appointment of Steve Harris as a non- executive director. Steve and I are excited to be working with the executive team to complete the Group's transition to profitability and, in the future, based on our international exposure to the healthcare and biotechnology markets, support Advanced Medical Solutions as it increases its portfolio of added value products throughout all its key target markets. Advisors As part of an overall review of the Group's professional advisors, HLB Kidson has been appointed as our auditors and Granville Baird as our sole stock brokers and financial advisors. These changes took effect from December, 2000. Prospects The rights issue, strong cash management and continued growth is securing a firmer financial footing for the future. The Group has signed major strategic partnerships, has become a recognised global producer of woundcare dressings and has improved the balance sheet. A strong and experienced management team is in place who are capable of delivering value for shareholders from this opportunity. I am pleased to report that results for the first quarter of 2001 are in line with our forecasts and market expectations. Finally, I would like to thank all of the employees at Advanced Medical Solutions who have committed long hours to the Group during 2000. They have experienced a year of significant change and have worked extremely hard on your behalf in moving the business towards profitability. Dr Geoffrey N. Vernon, Chairman 28 March 2001 Consolidated Profit and Loss Account for the year ended 31 December 2000 Year ended Year ended 31 December 31 December Note 2000 1999 £'000 £'000 ------------------------- Turnover 7,815 6,221 Cost of sales (7,373) (7,029) ----------- ----------- Gross profit / (loss) 442 (808) Distribution costs (262) (274) Administration costs (3,701) (4,782) Other operating income 402 564 ----------- ----------- Operating loss (3,119) (5,300) Interest receivable and similar income 470 221 Interest payable and similar charges (37) (77) Loss on ordinary activities before taxation (2,686) (5,156) ----------- ----------- Taxation - - Retained loss for the year (2,686) (5,156) ----------- ----------- Loss per share: restated including effect of rights issue Basic 2 (2.9)p (7.3)p Fully diluted (2.7)p (6.7)p The above results relate to continuing operations. There is no difference between the results reported above and results on a historic basis. Statement of Total Recognised Gains and Losses Year ended Year ended 31 December 31 December 2000 1999 £'000 £'000 ------------------------------- Loss for the financial year (2,686) (5,156) Currency translation differences on foreign currency net investments 24 14 ------------ ----------- Total losses recognised since last annual report (2,662) (5,142) Reconciliation of Movements in Shareholders' Funds Group Company Year ended Year ended Year ended Year ended 31 December 31 December 31 December 31 December 2000 1999 2000 1999 £'000 £'000 £'000 £'000 --------------------------------------------------- Opening shareholders' funds 9,590 14,732 13,351 39,582 Loss for the financial year (2,686) (5,156) (2,809) (26,231) Currency translation differences on foreign currency net investments 24 14 - - New share capital subscribed 3,184 - 3,184 - Premium on issue of shares during the year 3,822 - 3,822 - Costs of share issue (480) - (480) - --------------------------------------------------- Closing shareholders'funds 13,454 9,590 17,068 13,351 The loss for the Company includes an exceptional write-down in the value of investments of £3,164k (1999: £26,312k). Balance Sheets at 31 December 2000 Group Company Note 2000 1999 2000 1999 £'000 £'000 £'000 £'000 Fixed assets Tangible assets 5,403 5,606 - - Investments - - 10,180 10,742 ------ ------ ------ ------ 5,403 5,606 10,180 10,742 Current assets Stocks 1,021 1,803 - - Debtors - due within one year 2,385 2,091 68 254 - due after more than one year 200 - 200 - Cash at bank and in hand 7,013 2,723 6,642 2,387 ------ ------ ------ ------ 10,619 6,617 6,910 2,641 Creditors: amounts falling due within one year. (2,228) (2,306) (22) (32) ------ ------ ------ ------ Net current assets 8,391 4,311 6,888 2,609 ------ ------ ------ ------ Total assets less current liabilities 13,794 9,917 17,068 13,351 Creditors: amounts falling due after More than one year (340) (327) - - Provisions for liabilities and charges - - - - ------ ------ ------ ------ 13,454 9,590 17,068 13,351 Capital and reserves Called up share capital 2 9,355 6,171 9,355 6,171 Share premium account 2 36,910 33,568 36,910 33,568 Other reserve 1,531 1,531 - - Profit and loss account (34,342) (31,680) (29,197) (26,388) ------ ------ ------ ------ Equity shareholders' funds 13,454 9,590 17,068 13,351 Consolidated Cash Flow Statement for the year ended 31 December 2000 Year ended Year ended 31 December 31 December 2000 1999 Note £'000 £'000 ------------------------------------- Net cash outflow from operating activities (1,705) (3,600) Returns on investments and servicing of finance Interest paid - (1) Interest received 452 170 Interest element of finance lease Rental and hire purchase payments (37) (76) ------------------------------------- Net cash inflow from returns on investment and servicing finance 415 93 Capital expenditure and financial investment Purchase of tangible fixed assets (660) (704) Sale of tangible fixed assets 6 6 Cash outflow before use of liquid resources and financing (1,944) (4,205) Management of liquid resources Sales of term deposits - 4,223 Purchase of term deposits (4,362) - Financing Share issues by parent company 7,006 - Share issue expenses (480) - Repayment of promissory note - (49) Net movement of capital element of finance lease rental and hire purchase payments (316) (409) ------------------------------------- Net cash inflow/(outflow) from financing 6,210 (458) ------------------------------------- Decrease in cash (96) (440) Notes to the Accounts: 1. No dividend has been proposed. 2. The basic loss per share has been calculated on a weighted average number of shares in issue during the year, namely 93,181,925 (1999 : 70,893,769) after adjusting for the effect of the rights issue) and loss of £2,686k (1999: £5,156k). The comparative loss per share as disclosed in the previous financial statements has been adjusted for the effects of the rights issue. On 6 January 2000 the Company made a rights issue on a 16 for 31 basis at 22p. The Company issued 31,847,615 ordinary 10p shares ranking pari passu with existing shares and raised £7,006k before expenses of £480k. 3. This statement was approved by the Directors and agreed with the Group's auditors on 26 March 2000. A copy can be obtained from the Secretary at the Company's Head Office, Road Three, Winsford Industrial Estate, Winsford, Cheshire CW7 3PD. 4. The figures and financial information for the year 2000 do not constitute the statutory financial statements for that year. 5. The figures and financial information for the year 1999 do not constitute the statutory financial statements for that year. Those financial statements have been delivered to the Registrar and included the auditors report which was unqualified. 6. The Annual General Meeting will be held at the Oaklands Country House Hotel, Millington Lane, Gorstage, Weaverham, Northwich, Cheshire CW8 2SU at 11:00am on 29 May 2001.

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