AMS Interim Results: Underlying Growth Holds Up as Deal and Restructuring Costs Bite

Advanced Medical Solutions Group has reported respectable underlying growth for the first half of 2026, with higher revenue, improved margins and an 11% increase in adjusted profit before tax.

The statutory numbers look much less comfortable. Reported profit before tax fell 96% to just £0.3 million, mainly because AMS booked £12.4 million of exceptional costs relating to its operational restructuring programme and proposed acquisition by H.B. Fuller.

Cash generation also weakened, net debt increased and the interim dividend has been dropped following shareholder approval of the takeover resolutions.

That leaves investors with two versions of the same result. The operating businesses are making progress, but restructuring, investment and transaction costs are weighing heavily on the accounts as AMS prepares for a potential change of ownership.

AMS interim results at a glance

Key figure	H1 2026	H1 2025	Change
Revenue	£115.5 million	£110.8 million	+4%
Gross margin	54.5%	53.5%	+1.0 percentage point
Adjusted EBITDA	£26.3 million	£24.4 million	+8%
Adjusted EBITDA margin	22.7%	22.0%	+0.7 percentage points
Adjusted profit before tax	£18.1 million	£16.4 million	+11%
Reported profit before tax	£0.3 million	£8.5 million	-96%
Adjusted diluted EPS	6.25p	5.67p	+10%
Reported diluted EPS	-0.03p	2.84p	-101%
Operating cash inflow	£7.4 million	£15.1 million	-51%
Net debt	£60.3 million	£50.1 million	+20%
Interim dividend	Nil	0.85p	-100%

Revenue increased 3% at constant currency, which removes the effect of exchange-rate movements. The improvement was accompanied by a stronger gross margin and faster growth in adjusted earnings.

Adjusted EBITDA means earnings before interest, tax, depreciation and amortisation, with exceptional items also excluded. It is useful for examining trading progress, but investors should not ignore the cash costs excluded from the measure.

Underlying margins moved in the right direction

AMS increased its gross margin from 53.5% to 54.5%. Management attributed much of the improvement to stronger Woundcare margins following restructuring initiatives introduced in the first quarter of 2025.

Adjusted EBITDA rose 8% to £26.3 million, while the associated margin improved from 22.0% to 22.7%. Adjusted profit before tax increased 11% to £18.1 million, comfortably ahead of the 4% revenue increase.

That operating leverage is encouraging. It suggests AMS is turning modest sales growth into faster underlying profit growth, supported by restructuring benefits, additional volume and commercial synergies from the Peters Surgical acquisition.

This follows the progress covered in my review of AMS's record 2025 results.

Surgical growth masked a weaker LiquiBand performance

The Surgical division remained the main contributor, generating revenue of £91.4 million. That was 4% higher on a reported basis and 2% higher at constant currency.

Performance varied considerably by category:

Surgical category	H1 2026 revenue	Reported change
Advanced Closure	£22.4 million	-8%
Internal Fixation and Sealants	£4.9 million	+36%
Suture, Clips and VTO	£42.5 million	+9%
Biosurgical Devices	£13.5 million	+4%
Other Distributed Products	£8.1 million	+1%

Global LiquiBand revenue fell 8% to £22.4 million. Sales in the Americas were down 15%, although AMS said the comparison was distorted by unusually favourable partner order phasing in the first half of 2025.

That distinction matters. The announcement links the decline to timing rather than stating that the product has suffered a structural loss of demand. Even so, the category's performance is one of the weaker features of the period.

Elsewhere, Internal Fixation and Sealants revenue rose 36%, driven by US sales of LIQUIFIX. Suture, Clips and VTO revenue grew 9% following the Peters Surgical acquisition.

The Surgical adjusted EBITDA margin edged up from 24.9% to 25.1%.

Woundcare restructuring is showing through

Advanced Woundcare revenue increased 5% to £24.1 million, with the same growth rate at constant currency.

More importantly, its adjusted EBITDA margin rose from 13.2% to 14.7%. Management linked this improvement to higher volumes, a focus on better-margin opportunities and the previous restructuring programme.

Woundcare remains much smaller and less profitable than Surgical, but this margin improvement supports the argument that management's operational changes are producing tangible benefits.

Why reported profit nearly disappeared

The sharp fall in statutory profit is primarily explained by £12.4 million of exceptional items, up from £3.0 million in the previous period.

Exceptional item	H1 2026 cost
Operational synergy project activities	£2.8 million
Employee termination costs	£3.8 million
Asset impairments	£3.7 million
H.B. Fuller transaction costs	£2.1 million
Total	£12.4 million

AMS is closing four manufacturing sites in Germany and one in Czechia as part of its Suture and Collagen operational synergy programme. Manufacturing at those locations is expected to cease by the end of March 2027.

These costs may be classified as exceptional, but they are still economically real. They explain why reported profit before tax fell from £8.5 million to £0.3 million and why the company recorded a £0.1 million loss after tax.

AMS also said that, subject to completion of the H.B. Fuller acquisition, it expects approximately £15 million of further transaction costs relating to financial, legal and other advice.

Cash flow and debt need watching

Net cash inflow from operating activities fell 51% to £7.4 million. On an adjusted basis, operating cash inflow declined from £18.4 million to £11.0 million.

Several factors contributed:

• Inventory increased by £5.3 million ahead of the manufacturing transition.
• Receivables increased by £5.2 million, although AMS said significant payments arrived after the period end.
• Tax payments rose to £4.7 million from £2.3 million.
• Capital investment increased substantially.

AMS invested £9.5 million in capital equipment, research and development, and regulatory costs, compared with £4.1 million a year earlier. Projects included an extension at the Bangkok suture facility and additional Woundcare converting lines in Stafford.

Net debt consequently rose to £60.3 million from £50.5 million at the end of 2025. However, leverage remained within banking limits at 1.2 times adjusted EBITDA, compared with a covenant ceiling of 3.0 times. AMS also had £17 million available through its revolving credit facility.

The balance sheet is therefore not presented as being under immediate pressure, but cash conversion has clearly weakened during this investment-heavy period.

No interim dividend as the takeover progresses

The board does not intend to pay an interim dividend, compared with 0.85p per share last year. This follows approval of the resolutions connected with H.B. Fuller's proposed cash acquisition of AMS.

Shareholders approved the scheme in August 2026. AMS expects it to become effective in the fourth quarter, subject to outstanding conditions being satisfied or waived.

The announcement reports progress with competition and regulatory clearances in Austria, Germany and the UK. Completion is not yet guaranteed, however, and further updates are expected.

Investors can read the original company announcement for the complete financial statements and takeover conditions.

What matters from here

The main positive is that AMS's underlying operations continued to grow. Revenue increased, both major divisions expanded, gross margin improved and adjusted profit grew faster than sales.

The negatives sit mainly below that adjusted line. Restructuring costs have reduced reported earnings to almost nothing, operating cash flow has fallen, debt has increased and the interim dividend is nil.

Ordinarily, investors would focus heavily on whether the site closures can deliver sustainable margin and cash benefits. That remains relevant, but the H.B. Fuller transaction now dominates the investment case.

The key near-term issue is whether the remaining takeover conditions are completed on schedule in the fourth quarter. Until then, AMS is showing a business with improving underlying profitability, but also substantial integration costs and weaker cash generation during a complicated transition period.