TIDMADA
RNS Number : 2339D
Adams PLC
28 June 2021
28 June 2021
Adams Plc
("Adams" or the "Company")
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEARED 31 MARCH
2021
Adams Plc presents its annual report and audited financial
results for the year ended 31 March 2021.
Highlights:
- Net assets at 31 March 2021 of GBP5.15 million (2020: GBP2.06 million).
- Net assets per share 6.24 pence at 31 March 2021 (2020: 2.50 pence).
- Profit after tax of GBP3.09 million (2020: loss GBP0.30 million).
- Investments at 31 March 2021 valued at GBP5.11 million (2020: GBP1.18 million).
- Spend on new investments of GBP1.90 million (2020: GBP1.38 million).
- Investment realisation proceeds of GBP1.21 million (2020: GBP2.03 million).
- Cash at 31 March 2021 of GBP0.05 million (2020: GBP0.90 million).
- Post year end raised gross cash proceeds of GBP4.11 million
under a placing and open offer in April 2021.
- No part of the GBP3.00 million shareholder loan facility drawn down to date.
Michael Bretherton, Chairman, said:
"Whilst the arrival of a number of Covid-19 vaccines and the
associated roll-out of the global vaccination programs should now
provide a pathway for the gradual easing of the social and economic
restrictions currently in force, the full economic fallout from
this pandemic remains uncertain. Against this economic backdrop,
your Board will continue to maintain a rigorous and highly
selective investment approach which is committed to delivering
additional value for shareholders going forward. We remain
confident in the underlying fundamentals, technologies and
long-term potential for growth at the companies within our
investment portfolio."
The Company's 2021 Annual Report will shortly be posted to
shareholders together with a Notice of Annual General Meeting,
copies of which will be made available on the Company's website at
www.adamsplc.co.uk under the Investor Relations / Company &
Shareholder Documents section. The Annual General Meeting is to be
held at 11.00 a.m. on Wednesday 25 August 2021 at the Company's
registered office at 55 Athol Street, Douglas, Isle of Man, IM1
1LA. In accordance with current guidance regarding Covid-19 and the
travel restrictions into the Isle of Man, the Company recommends
that shareholders should not physically attend the AGM and should
instead vote by form of proxy.
Certain information contained in this announcement would have
been deemed inside information for the purposes of Article 7 of
Regulation (EU) No 596/2014 until the release of this
announcement.
Enquiries:
Adams Plc Michael Bretherton Tel: +44 1534 719 761
Nomad Cairn Financial Advisers LLP. Sandy Jamieson, James
Caithie Tel: +44 207 213 0880
Broker Peterhouse Capital Limited. Heena Karani Tel: +44 207 469
3393
Chairman's Statement
Results
Adams Plc ("Adams" or the "Company") achieved a good performance
during the year ended 31 March 2021 recording a gross investment
return of GBP3.24 million, which, after overhead costs of GBP0.15
million, resulted in a net profit after tax of GBP3.09 million.
This compares to a loss after tax of GBP0.30 million for the prior
year ended 31 March 2020. The improvement in profitability is
principally due to higher investment returns in the year.
During the year, the Company spent GBP1.90 million on the
purchase of additional investments and generated cash proceeds of
GBP1.21 million from the sale of two of its investments and the
partial realisation of another. The carrying value of investments
at 31 March 2021 was GBP5.11 million, represented by six listed and
one un-listed investment holdings, versus GBP1.18 million at 31
March 2020, represented by five listed and one un-listed investment
holdings.
Net assets increased to GBP5.15 million (equivalent to 6.24p per
share) at the 31 March 2021 balance sheet date, compared with
GBP2.06 million (equivalent to 2.50p per share) at the previous
year end. The GBP3.09 million increase in net assets reflects the
profit reported for the year.
Cash and cash equivalent balances were GBP0.05 million at 31
March 2021 compared to cash balances of GBP0.90 million at 31 March
2020.
Subsequent to the 31 March 2021 year end, Adams raised gross
cash proceeds of GBP4.11 million under a placing and open offer in
April 2021 which has significantly further increased the Company's
net asset base. The Strategic Report includes a pro-forma balance
sheet for Adams which discloses net assets of GBP9.21 million
following the placing and open offer.
Business model and investing policy
Adams is an investing company with an investing policy under
which the Board is seeking to acquire interests in special
situation investment opportunities that have an element of
distress, dislocation, dysfunction or other special situation
attributes and that the Board perceives to be undervalued. The
principal focus is in the small to middle-market capitalisation
sectors in the UK or Europe, but the Directors will also consider
possible special situation opportunities anywhere in the world if
they believe there is an opportunity to generate added value for
shareholders.
Investment Portfolio
The principal listed investments held by the Company at 31 March
2021 comprised C4X Discovery Holdings Plc ("C4XD"), Circassia
Pharmaceuticals plc ("Circassia") and Griffin Mining Limited
("Griffin") and Adams also holds Oxehealth Limited ("Oxehealth") as
a principal unquoted investment.
C4XD is a pioneering drug discovery company combining scientific
expertise with cutting-edge drug discovery technologies to
efficiently deliver world--leading medicines which are developed by
licensing partners. The company applies its enhanced DNA-based
target identification and candidate molecule design capabilities to
generate small molecule drug candidates across multiple disease
areas including inflammation, oncology, neurodegeneration and
addictive disorders. To date C4XD has successfully out-licensed two
programmes with one candidate in clinical development. C4XD
reported a loss after tax of GBP3.6 million in the six months
ending 31 January 2021 inclusive of R&D investment of GBP3.3
million and with no revenues. Cash balances at 31 January 2021
amounted to GBP15.4 million. Post that period end, the company is
due an imminent EUREUR7 million upfront payment in relation to an
exclusive worldwide licensing agreement signed with Sanofi in April
2021. The shareholding of Adams in C4XD at 31 March 2021 was, and
continues to be, 2.21 per cent of the C4XD shares in issue.
Circassia is an AIM listed global medical device company focused
on respiratory diagnostics and monitoring. In April 2020, the
company announced a transaction to terminate the development and
commercialisation agreement between the company and AstraZeneca for
the U.S. commercial rights to Tudorza(R) and Duaklir(R) and the
transfer of these products back to Astra Zeneca in order to
transform Circassia into a debt-free business with a strong Niox
based continuing operations business. The company's management has
subsequently undertaken a major restructuring of the business to
focus on Niox which has delivered significant cost savings. On
current gross margins, this means that the EBITDA breakeven point
for the Niox business will be at around GBP30 million of annualised
revenue. Revenues for the continuing Niox business for the year
ended 31 December 2020 were GBP23.9 million (2019: GBP34.6 million)
having been impacted by the Covid-19 pandemic. Cash balances at 31
December 2020 amounted to GBP7.4 million but Circassia subsequently
raised gross cash proceeds of GBP5.0 million through a share
subscription in March 2021. The shareholding of Adams at 31 March
2021 was, and continues to be, 0.74 per cent of the Circassia
shares in issue.
Griffin i s an AIM listed mining and investment company that has
been the leader in foreign investment in mining in China having
been engaged in developing the Caijiaying zinc and gold project
since 1997. Despite Covid-19 related interruptions to operations in
the first quarter of 2020, the Group recorded a 6.5 per cent.
increase in operating profits in the year to 31 December 2020,
primarily as a result of higher zinc metal prices received and
reduced costs. Griffin reported a profit of US$8.9 million after
tax for that year on reduced revenues of US$74.4 million.
Subsequently in January 2021, Griffin announced a major achievement
in finally securing a significant new mining license from the
Chinese Ministry of Land and Natural Resources which catapults
Griffin into the ranks of one of the largest zinc producers in
China. The shareholding of Adams in Griffin as at 31 March 2021
was, and continues to be, 0.27 per cent of the Griffin shares in
issue.
Oxehealth is a private company that is involved in vision-based
patient monitoring and management, using proprietary signal
processing and computer vision to process normal digital video
camera data to measure the vital signs and activity of patients in
a number of different markets, primarily in Mental Health, Acute
Hospital settings, Primary Care settings, Care Home, and Custodial
facilities in both the UK and also in Sweden. This is achieved
through the deployment of their Digital Care Assistant platform
which enables clinicians to take non-contact cardiorespiratory
measurements of patients' pulse and breathing rate, generates
alerts to potentially risky activity and reports on patients' vital
signs and behaviour, all without the clinician entering the
patient's room. At 31 March 2021, the investment holding by Adams
in Oxehealth's represents 2.4 per cent of Oxehealth's issued share
capital at that date.
In addition to the above investments, at 31 March 2021 Adams
held quoted holdings in three other AIM listed companies comprising
4D Pharma Plc, which is a pioneer in harnessing bacteria of the gut
microbiome as a novel and revolutionary class of medicines, known
as live biotherapeutics; Source Bioscience International Plc ,
which is an international provider of state-of-the art laboratory
services, clinical diagnostics and analytical testing services; and
Afentra Plc, which has a strategic imperative of capitalising on
opportunities resulting from the accelerating energy transition on
the African continent.
Post year end investment transaction . Subsequent to the
Company's 31 March 2021 year end, Adams announced that on 6 May
2021 it had purchased 8 million shares in AIM listed Seeing
Machines Limited for a total cash consideration of GBP0.91 million.
The investment holding represents 0.21 per cent. of the currently
issued ordinary share capital of Seeing Machines. This company is
an industry leader in advanced computer vision technologies and
designs AI-powered operator monitoring systems to improve transport
safety in automotive, commercial fleet, aviation, rail and off-road
markets.
Adams subsequently also announced on 27 May 2021 that it had
committed to subscribe for 2.5 million shares in Motif Bio Plc for
a total cash consideration of GBP0.5 million under a conditional
placing agreement. The conditions of the placing were, however, not
met and the related GBP0.5 million commitment by Adams fell away on
14 June 2021.
Adams had remaining cash balances of approximately GBP3.18
million following the post year end investment transaction in
Seeing Machines noted above and receipt of the GBP4.11 million
placing and open offer cash proceeds in April 2021.
Outlook
Whilst the arrival of a number of Covid-19 vaccines and the
associated roll-out of the global vaccination programs should now
provide a pathway for the gradual easing of the social and economic
restrictions currently in force, the full economic fallout from
this pandemic remains uncertain.
The Adams Board will, therefore, remain vigilant in the face of
this uncertain future and will continue to apply a disciplined
investment approach to both preserve shareholder capital in the
near term and deliver additional value for shareholders over the
longer term. We remain confident in the underlying fundamentals,
technologies and long-term potential for growth at the companies
within our investment portfolio.
Michael Bretherton
Chairman
29 June 2020
Investing Policy
The current Investing Policy is:
The Board will seek to acquire a direct and/or indirect
interests in special situation investment opportunities that have
an element of distress, dislocation, dysfunction or other special
situation attributes and that they perceive to be undervalued. The
principal focus will be in the small to middle-market
capitalisation sectors in the UK or Europe but the Directors will
also consider possible special situation opportunities anywhere in
the world if they believe there is an opportunity to generate added
value for Shareholders.
The Directors intend to identify investment opportunities
offering the potential to deliver a favourable return to
Shareholders over the medium to long term, primarily in the form of
a capital gain. A particular consideration will be to identify
businesses which, in the opinion of the Directors, are under-valued
due to any of a number of special situations that adversely impact
the business's short-term prospects and/or underlying value but
which business interests the Directors believe have a solid
fundamental core or sound development potential to present
opportunities for value creation.
The Company's interest in a potential investment may range from
a minority position to 100 per cent. ownership and the interest may
be either quoted or unquoted. Investments may be made in shares, or
by the acquisition of assets (including intellectual property) of a
relevant business, or by entering into partnerships, joint
ventures, equity derivatives, contracts for differences or other
equity or debt related securities that the Board deem
appropriate.
There will be no limit on the number of projects into which the
Company may invest, and the Company's financial resources may be
invested in a number of propositions or in just one investment,
which may be deemed to be a reverse takeover pursuant to Rule 14 of
the AIM Rules.
While the Directors intend to take into account the level of
existing funds available for investment when assessing the amount
of any investment, it is not proposed that there be any maximum
investment limit.
The Company may be both an active and a passive investor
depending on the nature of the individual investments. Although the
Company intends to be a medium to long term investor, there will be
no minimum or maximum limit on the length of time that any
investment may be held and short-term investments may be made.
The Company will not have a separate investment manager.
The Company may require additional funding as investments are
made and new opportunities arise. The Directors may offer new
Ordinary Shares by way of consideration, as well as cash, thereby
helping to preserve the Company's cash resources. The Company may,
in appropriate circumstances, issue debt securities or otherwise
borrow money to complete an investment
Given the nature of the Company's Investing Policy, the Company
does not intend to make regular periodic disclosures or
calculations of net asset value other than at the time of
publication of its half year and annual results.
The Board's principal focus will be on achieving capital growth
for Shareholders.
Statement of Comprehensive Income for the year ended 31 March
2021
Year ended Year ended
31 March 2021 31 March 2020
GBP'000 GBP'000
-------------------------------------------------------- --------------- ----------------
Dividend income 3 83
Gain/(loss) on investments 3,234 (245)
--------------------------------------------------------- --------------- ----------------
Investment return 3,237 (162)
Expenses and other income
Administrative expenses (153) (152)
Other income - 1
--------------------------------------------------------- --------------- ----------------
Operating profit / (loss) 3,084 (313)
Interest income 6 10
--------------------------------------------------------- --------------- ----------------
Profit / (loss) on ordinary activities before taxation 3,090 (303)
Tax on profit on ordinary activities - -
-------------------------------------------------------- --------------- ----------------
Profit / (loss) for the year 3,090 (303)
--------------------------------------------------------- --------------- ----------------
Basic and diluted profit / (loss) per share 3.74 (0.37)p
--------------------------------------------------------- --------------- ----------------
Statement of Financial Position at 31 March 2021
31 March 31 March
2021 2020
GBP'000 GBP'000
----------------------------- --------- -----------
Assets
Non-current assets
Investments 5,105 1,178
------------------------------ --------- -----------
Current assets
Trade and other receivables 22 9
Cash and cash equivalents 49 904
------------------------------ --------- -----------
Current assets 71 913
------------------------------ --------- -----------
Total assets 5,176 2,091
------------------------------ --------- -----------
Liabilities
Current liabilities
Trade and other payables (23) (28)
------------------------------ --------- -----------
Total liabilities (23) (28)
------------------------------ --------- -----------
Net current assets 48 885
------------------------------ --------- -----------
Net assets 5,153 2,063
------------------------------ --------- -----------
Equity
Share capital 826 826
Retained earnings reserve 4,327 1,237
------------------------------ --------- -----------
Total shareholder equity 5,153 2,063
------------------------------ --------- -----------
Statement of Changes in Equity as at 31 March 2021
Share Capital Retained earnings reserve Total
GBP'000 GBP'000 GBP'000
At 1 April 201 9 826 1,540 2,366
Changes in equity
Total comprehensive loss - (303) (303)
At 31 March 2020 826 1,237 2,063
--------------------------- -------------- -------------------------- --------
Changes in equity
Total comprehensive gain - 3,090 3,090
--------------------------- -------------- -------------------------- --------
At 31 March 2021 826 4,327 5,153
--------------------------- -------------- -------------------------- --------
Statement of Cash Flows for the year ended 31 March 2021
Year ended Year ended
31 March
2020
31 March
2021 *Restated
GBP'000 GBP'000
Profit/(loss) for the year 3,090 (303)
Unrealised (gain)/loss on revaluation
of portfolio investments (2,644) 319
Realised gain on disposal of portfolio
investments (590) (74)
Increase in trade and other receivables (13) (7)
(Decrease)/increase in trade and other
payables (5) 2
--------------------------------------------- ----------- -------------
Net cash outflow from operating activities (162) (63)
--------------------------------------------- ----------- -------------
Cash flows from investing activities
Purchase of portfolio investments (1,900) (1,378)
Proceeds from sales of investments 1,207 2,030
--------------------------------------------- ----------- -------------
Net cash (used) / generated from investing
activities (693) 652
--------------------------------------------- ----------- -------------
Net (decrease) / increase in cash
and cash equivalents (855) 589
Cash and cash equivalents at beginning
of year 904 315
--------------------------------------------- ----------- -------------
Cash and cash equivalents at end of
year 49 904
--------------------------------------------- ----------- -------------
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