Advanced Medical Solutions Group

BUY

15/09/2011 Ben Jaglom

Wound care specialist Advanced Medical Solutions Group (AMS) reported a 25% increase in profits amid strong sales of its Liquiband products.

The AIM-quoted enterprise declared profits of £2.62m on turnover that rose 12% to £16.3m over the six months to June. Earnings per share increased from 1.42p to 1.72p. Its cash position moved from net debt of £300,000 to cash of £3.6m.

The company, which makes a variety of products for people suffering from burns, wounds and cuts, noted that it had achieved 5% market share in the US after 'only our second year of selling activity', while its range of ActivHeal products enjoyed a 64% increase in like-for-like sales. Its silver products grew sales by 7%.

In an interview with Growth Company Investor, chief executive officer Chris Meredith said that 'all of the business's key growth drivers continue to perform well', adding that Liquiband in particular had shown growth. Regarding the reforms to the NHS, he argued that they would be 'beneficial' to AMS as the 'focus will be on saving money, and our brand saves money'.

Analysts at finnCap are forecasting pre-tax profits of £6.6m (EPS: 4p) on sales of £35.2m for the year to December 2011. For 2012, the forecast is profits of £7.9m (EPS: 4.8p) on turnover of £40.1m.

Last recommended by Growth Company Investor last October at 65.5p the shares currently trade at 87p. A business that has profited from an increase in demand for its products and success in marketing its wares overseas, the company should have further to go. Buy.