REG - Adams PLC - Half-year Report
26/11/2021 07:00
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RNS Number : 6575T Adams PLC 26 November 2021
Adams plc
("Adams" or the "Company")
Interim Results for the Six Months ended 30 September 2021
Results
Adams Plc ("Adams" or the "Company") reported a loss after tax of £0.648
million for the six months to 30 September 2021 compared to a profit of
£1.091 million in the six months ended 30 September 2020. The reduction in
profitability is principally due to investment return losses of £0.567
million compared to investment return gains of £1.162 million in the previous
September 2020 half year.
In April 2021, Adams raised net cash proceeds of £4.057 million under a
placing and open offer which significantly increased the Company's net asset
base and cash balances.
During the six months ended 30 September 2021, the Company spent £2.948
million on equity investments, of which four were new investments and one was
a follow-on investment. There were no investment realisations for cash during
the period but its newly acquired listed investment in Telit Communications
Plc ("Telit") was acquired by Trieste Acquisitions Holding Limited ("Trieste")
in August 2021. The 380,000 shares in Telit acquired by the Company on 8 July
2021 were rolled over into the unlisted holding company of Trieste, Notano
Midco Limited ("Notano"), under the terms of a recommended share offer
alternative announced by Trieste on 21 May 2021.
Adams held eleven investments as at 30 September 2021, of which nine were
listed and two were un-listed, and for which the total investment carrying
value was £7.49 million (31 March 2021: £5.11 million, represented by six
listed and one un-listed investment holdings).
The Company held cash balances of £1.09 million as at 30 September 2021,
compared to cash balances of £0.05 million at the previous 31 March 2021 year
end.
Net assets increased to £8.56 million (equivalent to 5.87p per share) at the
30 September 2021 balance sheet date, compared with £5.15 million (equivalent
to 6.24p per share) at 31 March 2021. The £3.41 million increase in net
assets reflects the £4.06 million share issue fund raise in April 2021 less
the £0.65 million loss reported for the period.
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 30 September 2021
comprised C4X Discovery Holdings Plc ("C4XD"), Circassia Pharmaceuticals plc
("Circassia"), Access Intelligence Plc ("Access Intelligence"), Seeing
Machines Limited ("Seeing Machines") and Griffin Mining Limited ("Griffin")
and Adams also holds Oxehealth Limited ("Oxehealth") and Notano Midco
Limited ("Notano") as principal unquoted investments.
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
£3.6 million in the six months ending 31 January 2021 inclusive of R&D
investment of £3.3 million and with no revenues. Cash balances at 31 January
2021 amounted to £15.4 million. Post that period end, the company received a
€7 million upfront payment in relation to an exclusive worldwide licensing
agreement signed with Sanofi in April 2021 for C4XD's IL-17A oral inhibitor
programme worth up to €414 million including the €7 million upfront
payment and €407 million in potential development, regulatory and
commercialisation milestones. There is also potential for single‐digit
Sanofi royalties. The shareholding of Adams in C4XD at 30 September 2021 was,
and continues to be, 2.19 per cent of the C4XD shares in issue.
Circassia is an AIM listed global medical device company focused on
respiratory diagnostics and monitoring. Following a major restructuring and
the transfer of the Tudorza and Duaklir products back to AstraZeneca in March
2021, Circassia has now been transformed into a debt-free business with a
strong NIOX® asthma management products based continuing operations business.
For the six months ended 30 June 2021, NIOX sales increased 28% to £14.6
million , due in part to a post Covid-19 peak recovery. The NIOX business
generated an EBITDA profit for the first time of £0.6 million (excluding
corporate overheads of £0.7 million) in this half year period and which
reflected a substantial reduction in the cost base. Net cash as of 30 June
2021 amounted to £11.3 million inclusive of gross cash proceeds of £5.0
million raised through a share subscription in March 2021. The shareholding of
Adams at 30 September 2021 was, and continues to be, 0.74 per cent of the
Circassia shares in issue.
Access Intelligence is an AIM listed London based technology innovator
delivering Artificial Intelligence/ AI software and service solutions that
address the fundamental business needs of customers in the PR, marketing and
communications industries. The company combines AI technologies with human
expertise to analyse data and provide strategic insights as a single, real
time view of what is important. On 1 September 2021, Access Intelligence
completed the acquisition of Isentia Group Limited, a market leading Asia
Pacific focused media intelligence and award winning insights company for the
corporate communications market, headquartered in Sydney, Australia. For the
six months ended 31 May 2021, Access Intelligence's first half revenue
increased by approximately 17 per cent. to £11.0 million and delivered an
EBITDA loss in the period of £0.13 million reflecting additional investment
in sales and marketing to drive global expansion. Insentia reported revenues
of A$42.9 million for the six months ended 31 December 2020 and delivered an
EBITDA profit in the period of A$5.5 million. The enlarged group intends to
invest in and drive further innovation to deliver its strategic vision of
building the leading intelligence provider for the global marketing and
communications industry. Adams acquired 667,000 ordinary shares in Access
Intelligence at £1.20 per share on 19 August 2021 for a total consideration
of approximately £0.80 million. The shareholding of Adams in Access
Intelligence as at 30 September 2021 was, and continues to be, 0.52 per cent
of the Access Intelligence shares in issue.
Seeing Machines is headquartered in Australia and is an AIM listed industry
leader in advanced computer vision technologies. The company designs
Artificial Intelligence/ AI powered operator monitoring systems to improve
transport safety in automotive, commercial fleet, aviation, rail and off-road
markets. The company has pioneered such technology through algorithm
development, extensive behavioural research and data, expertise in
camera-based optics and embedded processing to deliver true AI driven human
machine interaction. The technology incorporates warnings when human state
attention impairment, distraction and other measures are identified, in
order to re-engage the operator or driver. Seeing Machines continues to grow
as an automotive leader in such technology, having now won contracts with a
total of seven automotive Tier 1 global customers. In the year to 30 June
2021, Seeing Machines reported underlying revenue growth of 30 per cent when
using constant currency to give total revenues of A$47.2 million and a loss
for the period of A$17.4 million. Seeing Machines's cash and cash equivalent
balances at 30 June 2021 amounted to A$47.4 million and have subsequently been
strengthened by a successful fundraise completed on 23 November 2021 of US$41m
to finance accelerated growth in the rapidly expanding driver monitoring
system technology market, across all transport sectors globally. The
shareholding of Adams in Seeing Machines as at 30 September 2021 was 0.21 per
cent of the Seeing Machines shares in issue but has subsequently been diluted
to 0.20 per cent following the fundraise referred to above.
Griffin is 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. 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
elevates Griffin to being one of the largest zinc producers in China. Revenues
increased by 154% to US$54.1 million for the six months to 30 June 2021 and
generated a profit after tax of US$10.3 million. The results benefitted from
the new mining license as well as a significant improvement in the market
price for zinc and lower smelter treatment charges and in addition the 2020
first half year results were adversely affected by the suspension in
operations to contain the Covid-19 pandemic. The shareholding of Adams in
Griffin as at 30 September 2021 was, and continues to be, 0.27 per cent of the
Griffin shares in issue.
Oxehealth is a private company which 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 its Oxevision platform which enables clinicians to
take non-contact cardiorespiratory measurements of a patient's pulse and
breathing rate, generates alerts to potentially risky activity and reports on
a patient's vital signs and behaviour, all without the clinician entering the
patient's room. At 30 September 2021, the investment holding by Adams in
Oxehealth represents 2.98 per cent of Oxehealth's issued share capital at that
date.
Notano is a private company which has Telit Communications as its principal
operating subsidiary and which is a global leader in Internet of Things (IoT)
enablement. Telit has over twenty years of experience designing, building, and
executing the most complex solutions that are redefining the rules of digital
business. Telit has an extensive portfolio of wireless connectivity modules,
software platforms and global IoT connectivity services, empowering hundreds
of millions of connected 'things' to date, and trusted by thousands of direct
and indirect customers, globally. The company offers the largest portfolio of
specialty IoT communications modules as well as a comprehensive platform for
collecting, managing and analysing critical device data and is available as a
subscription-based cloud service or as an on premise installation. Telit also
offers its own IoT SIM cards and global data plans to meet a variety of
applications and bandwidth requirements. In the year ended 31 December 2020,
Telit generated an operating profit of US$13.2 million on revenues of US$343.6
million. Adams acquired 380,000 shares in Telit at £2.256 per share on 8 July
2021 for a total consideration of approximately £0.85 million. On 31 August
2021, the acquisition of Telit by Trieste was completed, and Adams received
380,000 ordinary shares in Notano in consideration for its 380,000 Telit
shares. At 30 September 2021, the investment holding by Adams in Notano
represents 0.48 per cent of Notano's issued share capital at that date.
In addition to the above investments, at 30 September 2021 Adams held quoted
holdings in four other 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; Euromax Resources Ltd, which is a Canadian development
company, focused on building and operating the Ilovica-Shtuka copper and gold
project in Macedonia; and Afentra Plc, which has a strategic imperative of
capitalising on opportunities resulting from the accelerating energy
transition on the African continent.
Outlook
Whilst the arrival of a number of Covid-19 vaccines and the associated
roll-out of the global vaccination programmes has now provided a pathway for
easing of the social and economic restrictions previously in force, the full
economic fallout from this pandemic remains uncertain. In addition, economic
threats remain including from the unprecedented levels of worldwide public
debt and continued volatility in financial markets can, therefore, be
expected.
In view of these uncertainties and economic threats, 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, many of
which are in sectors that are regarded as defensive stocks in the current
environment.
Michael Bretherton
Chairman
26 November 2021
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. The Directors of the Company
take responsibility for this announcement.
Enquiries:
Adams plc
Mike Bretherton Tel: +44 1534 719 761
Nomad
Cairn Financial Advisers LLP
Sandy Jamieson, James Caithie Tel: +44 207 213 0880
Broker
Peterhouse Corporate Finance Limited
Lucy Williams, Duncan Vasey Tel: +44 207 469 0930
Caution regarding forward looking statements
Certain statements in this announcement, are, or may be deemed to be, forward
looking statements. Forward looking statements are identified by their use of
terms and phrases such as ''believe'', ''could'', "should" ''envisage'',
''estimate'', ''intend'', ''may'', ''plan'', ''potentially'', "expect",
''will'' or the negative of those, variations or comparable expressions,
including references to assumptions. These forward-looking statements are not
based on historical facts but rather on the Directors' current expectations
and assumptions regarding the Company's future growth, results of operations,
performance, future capital and other expenditures (including the amount,
nature and sources of funding thereof), competitive advantages, business
prospects and opportunities. Such forward looking statements reflect the
Directors' current beliefs and assumptions and are based on information
currently available to the Directors.
STATEMENT OF COMPREHENSIVE INCOME
FOR THE SIX MONTH PERIOD TO 30 SEPTEMBER 2021
Year ended 31 Mar 2021
6 months ended 6 months ended
30 Sep 2021 30 Sep 2020
Note (Unaudited) (Audited) (Unaudited)
£'000 £'000 £'000
(Loss)/gain on investments 5 (567) 3,234 1,159
Dividend income - 3 3
Investment return (567) 3,237 1,162
Expenses and other income
Administrative expenses (81) (153) (77)
Operating (loss)/profit (81) 3,084 1,085
Interest income - 6 6
(Loss)/profit before income tax (648) 3,090 1,091
Income tax expense - - -
(Loss)/profit and total comprehensive
(loss)/income for the period (648) 3,090 1,091
Basic and diluted (loss)/earnings per share 10 (0.46)p 3.74p 1.32p
STATEMENT OF FINANCIAL POSITION
AS AT 30 SEPTEMBER 2021
As at As at As at
30 Sep 2021 31 Mar 2021 30 Sep 2020
(Unaudited) (Audited) (Unaudited)
Note £'000 £'000 £'000
Assets
Non-current assets
Investments 6 7,486 5,105 2,187
Current assets
Trade and other receivables 7 3 22 3
Cash and cash equivalents 1,089 49 972
Total current assets 1,092 71 975
Total assets 8,578 5,176 3,162
Liabilities
Current liabilities
Trade and other payables 8 (16) (23) (8)
Total liabilities (16) (23) (8)
Net current assets 1,076 48 967
Net assets 8,562 5,153 3,154
Equity
Called up share capital 9 1,459 826 826
Share premium 9 3,424 - -
Accumulated gains 3,679 4,327 2,328
Total shareholder equity 8,562 5,153 3,154
STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTH PERIOD TO 30 SEPTEMBER 2021
Share Share Premium Accumulated Gains Total
Capital
£'000 £'000 £'000
At 31 March 2020 (audited) 826 - 1,237 2,063
Total comprehensive gain for period - - 1,091 1,091
At 30 September 2020 (unaudited) 826 - 2,328 3,154
Total comprehensive gain for period - - 1,999 1,999
At 31 March 2021 (audited) 826 - 4,327 5,153
Issue of shares 633 3,482 - 4,115
Share issue costs - (58) - (58)
Total comprehensive loss for period - - (648) (648)
At 30 September 2021 (unaudited) 1,459 3,424 3,679 8,562
STATEMENT OF CASH FLOWS
FOR THE SIX MONTH PERIOD TO 30 SEPTEMBER 2021
Year
6 months ended 6 months
ended 31 Mar 2021 ended
30 Sep 2021 30 Sep 2020
(Unaudited) (Audited) (Unaudited)
£'000 £'000 £'000
(Loss)/profit for the period (648) 3,090 1,091
Unrealised loss/(gain) on revaluation of investments 567 (2,644) (736)
Realised gain on disposal of investments - (590) (423)
Decrease/(Increase) in trade and other receivables 19 (13) 6
Decrease in trade and other payables (7) (5) (20)
Net cash outflows from operating activities (69) (162) (82)
Cash flows from investing activities
Proceeds from sales of investments - 1,207 602
Purchase of investments (2,948) (1,900) (451)
Net cash (outflows)/inflows from investing activities (2,948) (693) 151
Cash flows from financing activities
Issue of share capital net of costs 4,057 - -
Net cash inflows from financing activities 4,057 - -
Net increase/(decrease) in cash and cash equivalents 1,040 (855) 69
Cash and cash equivalents at beginning of period 49 904 903
Cash and cash equivalents at end of period 1,089 49 972
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTH PERIOD TO 30 SEPTEMBER 2021
1 General information
Adams Plc ("the Company") is a company incorporated in the Isle of Man and is
listed on the AIM market of the London Stock Exchange.
2 Basis of preparation
The interim financial statements of Adams Plc are unaudited condensed
financial statements for the six months ended 30 September 2021. These include
unaudited comparatives for the six months ended 30 September 2020 together
with audited comparatives for the year ended 31 March 2021.
These interim condensed financial statements have been prepared on the basis
of the accounting policies expected to apply for the financial year to 31
March 2022 which are based on the recognition and measurement principles of
International Financial Reporting Standards (IFRS) as adopted by the European
Union (EU). The financial statements have been prepared under the historical
cost convention. The Company's presentation and functional currency is GBP
Pounds Sterling.
The interim financial statements do not include all of the information
required for full annual financial statements and do not comply with all the
disclosures in IAS 34 'Interim Financial Reporting', and should be read in
conjunction with the Company's annual financial statements to 31 March 2021.
Accordingly, whilst the interim statements have been prepared in accordance
with IFRS, they cannot be construed as being in full compliance with IFRS.
The preparation of financial statements in conformity with IFRS as adopted by
the EU requires the use of certain critical accounting estimates. It also
requires management to exercise its judgement in the process of applying the
Company's accounting policies.
3 Going concern
Information on the business environment, financial position and the factors
underpinning the Company's future prospects and portfolio are included in the
Chairman's Statement. The Directors have considered their obligation in
relation to the assessment of the going concern of the Company and have
reviewed the current cash forecasts and assumptions as well as the main risk
factors facing the Company. The Directors acknowledge the ongoing Coronavirus
pandemic ("Covid-19") and the adverse impact it, and the measures taken to
tackle it, continue to have on the global economy. The Directors will
continue to closely monitor the ongoing impact of Covid-19 on the Company's
operations. The Directors consider that the Company has adequate resources to
continue in operational existence for the foreseeable future. Accordingly, the
going concern basis has been adopted in the preparation of the financial
statements.
4 Significant accounting policies
The accounting policies adopted are consistent with those followed in the
preparation of the annual financial statements of Adams Plc for the year ended
31 March 2021 which received an unqualified audit opinion. A copy of these
financial statements is available on the Company website at www.adamsplc.co.uk
(http://www.adamsplc.co.uk) .
5 Segment reporting
Operating segments for Adams Plc are reported based on the financial
information provided to the Board, which is used to make strategic decisions.
The Directors are of the opinion that under IFRS 8 'Operating segments' the
Company has only one reportable segment, being Investment Return. The Board
assesses the performance of the operating segment based on financial
information which is measured and presented in a manner consistent with that
in the financial statements.
The principal sources of revenue for the Company in the period to 30 September
2021 were as follows:
6 months ended 30 Sep 2021 Year ended 6 months ended 30 Sep 2020
31 Mar 2021
£'000 £'000 £'000
Unrealised (loss)/gain on investments (567) 2,644 736
Realised gains on investments - 590 423
Total (loss)/gain on investments (567) 3,234 1,159
6 Investments
An analysis of movements in the value of the Company's investments is as
follows:
Quoted Equity Shares Unquoted Equity Shares Derivative Trading Asset Unquoted Loan Notes Total
£'000 £'000 £'000 £'000 £'000
Fair value at 31 March 2020 1,049 5 - 124 1,178
Additions at cost 445 - - 6 451
Disposals (178) - - - (178)
Unrealised revaluation gains 736 - - - 736
Fair value at 30 September 2020 2,052 5 - 130 2,187
Additions at cost 883 566 - - 1,449
Disposals (304) (5) - (130) (439)
Unrealised revaluation losses 1,351 - 557 - 1,908
Fair value at 31 March 2021 3,982 566 557 - 5,105
Additions at cost* 2,624 1,196 - - 3,820
Disposals* (872) - - - (872)
Unrealised revaluation gains (198) 18 (387) - (567)
Fair value at 30 September 2021 5,536 1,780 170 - 7,486
* The additions at cost comprise cash outflows of £2,948,000 on investment
additions, including for shares purchased in Telit Communications Plc
("Telit") in July 2021, together with a non-cash addition of £872,000 in
relation to the investment, by way of rollover of Adams' listed shareholding
in Telit, into the unlisted holding company, Notano Midco Limited, of Trieste
Acquisitions Holdings Limited, under a recommended share offer alternative
completed in August 2021. The corresponding £872,000 disposal of the listed
Telit investment also represents a non-cash disposal transaction.
7 Trade and other receivables
As at As at As at
30 Sep 2021 31 Mar 2021 30 Sep 2020
£'000 £'000 £'000
Prepayments 3 22 3
3 22 3
The carrying amount of prepayments is approximate to their fair value.
8 Trade and other payables
As at As at As at
30 Sep 2021 31 Mar 2021 30 Sep 2020
£'000 £'000 £'000
Trade payables 8 8 1
Accruals and other creditors 8 15 7
16 23 8
The carrying amount of trade and other payables approximates to their fair
value.
9 Share capital
Ordinary shares Number of shares issued and fully paid up Share capital Share premium
£'000 £000
At 30 September 2020 82,553,232 826 -
Issue of shares - - -
At 31 March 2021 82,553,232 826 -
Issue of shares 63,305,999 633 3,424
At 30 September 2021 145,859,231 1,459 3,424
On 1 April 2021, the Company placed 8,650,000 new £0.01 ordinary shares at a
price of 6.5p per share. In addition, on 15 April 2021 a further 54,655,999
£0.01 new ordinary shares were issued by way of an open offer at a price of
6.5p per share.
The authorised Ordinary share capital of the Company at 30 September 2021, 31
March 2021 and 30 September 2021 was 350,000,000 Ordinary Shares with a
nominal value of £0.01 per share.
10 Earnings/(loss) per share
The basic earnings or loss per share is calculated by dividing the profit or
loss after tax attributable to equity shareholders by the weighted average
number of Ordinary Shares in issue during the period:
Year 6 months
6 months ended ended
ended 31 Mar 2021 30 Sep 2020
30 Sep 2021
(Loss)/profit after tax attributable to equity holders of the Company (£'000) (648) 3,090 1,091
Weighted average number of Ordinary Shares 141,379,226 82,553,232 82,553,232
Basic and diluted (loss)/earnings per share (0.46) 3.74 1.32
There were no potentially dilutive shares in issue as at 30 September 2021, 31
March 2021 or 30 September 2020.
11 Half year interim report
A copy of this half year interim report, as well as the annual statutory
accounts to 31 March 2021, are available on the Company's website at
www.adamsplc.co.uk (http://www.adamsplc.co.uk) .
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