TIDMADA
RNS Number : 6013R
Adams PLC
07 July 2022
7 July 2022
Adams Plc
("Adams" or the "Company")
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEARED 31 MARCH
2022
Adams Plc presents its annual report and audited financial
results for the year ended 31 March 2022
Highlights:
- Net assets at 31 March 2022 of GBP7.48 million (2021: GBP5.15 million).
- Net assets per share 5.13 pence at 31 March 2022 based on
145.9 million shares in issue (2021: 6.24 pence based on 82.5
million shares in issue).
- Loss after tax of GBP1.73 million (2021: profit GBP3.09 million).
- Investments at 31 March 2022 valued at GBP6.62 million (2021: GBP5.11 million).
- Spend on new investments of GBP3.09 million (2021: GBP1.90 million).
- No investment realisation proceeds generated (2021: GBP1.21 million).
- Cash at 31 March 2022 of GBP0.87 million (2021: GBP0.05 million).
- G ross cash proceeds of GBP4.11 million raised 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:
"World economies are currently facing many uncertainties
associated with the Russia-Ukraine conflict as well as soaring
energy prices and rising inflation. In addition, whilst the arrival
of a number of Covid-19 vaccines and the associated roll-out of
global vaccination programs has allowed for a full reopening of
society in many countries during the first quarter of 2022, the
full economic fallout from this two-year pandemic remains uncertain
and the financial support measures taken during the period have
left governments heavily indebted."
"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 ."
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 12.30 p.m. on Friday 26 August 2022 at the Company's
registered office at 55 Athol Street, Douglas, Isle of Man, IM1
1LA.
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") reported a loss after tax
of GBP1.73 million for the year to 31 March 2022 compared to a
profit of GBP3.09 million in the previous year ended 31 March 2021.
The reduction in profitability reflects difficult financial market
conditions and is principally due to investment return losses of
GBP1.57 million compared to investment return gains of GBP3.24
million in the previous year.
In April 2021, Adams raised net cash proceeds of GBP4.06 million
under a placing and open offer which significantly increased the
Company's net asset base and cash balances.
During the year ended 31 March 2022, the Company spent GBP3.09
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 listed shares newly
acquired in Telit Communications Plc in July 2021 for GBP0.86
million were rolled over into the Notano Midco Limited unlisted
holding company of Trieste Acquisitions Holding Limited under the
terms of a recommended share offer alternative completed in August
2021. Notano Midco subsequently changed its name to Telit IOT
Solutions Limited in the second quarter of 2022.
Adams held eleven investments as at 31 March 2022, of which nine
were listed and two were un-listed, and for which the total
investment carrying value was GBP6.62 million (31 March 2021:
GBP5.11 million, represented by six listed and one un-listed
investment holdings).
The Company held cash balances of GBP0.87 million as at 31 March
2022, compared to cash balances of GBP0.05 million at the previous
31 March 2021 year end.
Net assets increased to GBP7.48 million (equivalent to 5.13p per
share) at the 31 March 2022 balance sheet date, compared with
GBP5.15 million (equivalent to 6.24p per share) at 31 March 2021.
The GBP2.33 million increase in net assets reflects the share issue
in April 2021 which raised cash of GBP4.06 million, less the
GBP1.73 million loss reported for the year.
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
2022 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 Telit IOT Solutions Limited ("Telit") 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. This
includes an exclusive worldwide licensing agreement signed with
Sanofi in April 2021 for C4XD's IL-17A oral inhibitor programme
worth up to EUR414 million including the EUR7 million upfront
payment and EUR407 million in potential development, regulatory and
commercialisation milestones. There is also potential for single --
digit Sanofi royalties. C4XD reported a loss after tax of GBP4.5
million in the six months ending 31 January 2022 inclusive of
R&D investment of GBP3.9 million and with only minimal revenues
of GBP0.01 million. Cash balances at 31 January 2022 amounted to
GBP11.7 million. The shareholding of Adams in C4XD at 31 March 2022
was, and continues to be, 2.18 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(R) asthma
management products based continuing operations business. The group
is continuing its transition to a distributor-led business model
with new arrangements in the USA and China expected to drive
scalable growth as it continues to implement access to a large and
underserved population of patients suffering from asthma. For the
year ended 31 December 2021, NIOX sales increased 17% to GBP27.9
million and generated an EBITDA profit for the first time of GBP0.6
million (excluding corporate overheads). The profit after tax for
the year amounted to GBP3.6 million inclusive of deferred tax
credits and discontinued operations. The company had net cash
balances of GBP11.7 million at 31 December 2021. The shareholding
of Adams at 31 March 2022 was, and continues to be, 0.73 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. It is supported by partnerships with the world's
largest data providers and social media platforms including
Twitter, Reddit and Twitch. In September 2021, Access Intelligence
c ompleted 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 year ended 30 November
2021, Access Intelligence reported revenues of GBP33.3 million,
reflecting organic growth of 21% coupled with a GBP10.2m
contribution from Isentia, and delivered an EBITDA loss for the
year of GBP0.5 million inclusive of additional investment in sales
and marketing to drive global expansion. The shareholding of Adams
in Access Intelligence as at 31 March 2022 was, and continues to
be, 0.51 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 in corporates 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, in both the aftermarket and OEM sectors, having now won
contracts with a total of seven automotive Tier 1 global customers.
In the half year to 31 December 2021, Seeing Machines reported
underlying revenue growth of 25 per cent when using constant
currency to give 6 month revenues of A$21.7 million and a loss for
the period of A$13.8 million. Seeing Machines's cash and cash
equivalent balances at 31 December 2021 amounted to A$79.3 million
having been strengthened by a successful US$41.0 million fundraise
completed in November 2021. The shareholding of Adams in Seeing
Machines as at 31 March 2022 was, and continues to be, 0.19 per
cent of the Seeing Machines 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. 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 61% to US$121.6 million for the year to 31
December 2021 and generated a profit after tax of US$25.4 million.
The results benefited from record amounts of ore mined and
processed and a significant improvement in the market price for
zinc and lower smelter treatment charges. This bodes well for
future results once the new mining licence area is commissioned and
in full production and for which the development plans and design
have now been completed and with development expected to commence
in July 2022. The shareholding of Adams in Griffin as at 31 March
2022 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 31 March 2022, the investment holding by Adams in Oxehealth
represents 2.93 per cent of Oxehealth's issued share capital at
that date.
Telit is a private company and 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-premises installation. Telit also offers its
own IoT SIM cards and global data plans to meet a variety of
applications and bandwidth requirements. At 31 March 2022, the
investment holding by Adams in Telit represents 0.48 per cent of
Telit's issued share capital at that date.
In addition to the above investments, at 31 March 2022 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.
Events after the reporting period
During May 2022, the Company made investment purchases of 65,000
shares in Tremor International Ltd for a total cost of GBP0.31
million. This investment holding represents 0.04 per cent of
Tremor's issued share capital at that time.
Difficult financial market conditions have continued in the
current year. These have further adversely impacted Adams'
investment portfolio subsequent to our 31 March 2022 year end and
have generated unrealised investment losses which are estimated to
have resulted in an overall loss of GBP0.7 million for the June
quarter of this year. That loss includes a GBP0.1 million full
write down of our small investment in 4D Pharma Plc which went into
administration on 24 June 2022.
Adams had remaining cash balances of approximately GBP0.5
million following the post year end investment transaction in
Tremor and the expected June quarter loss noted above.
Outlook
World economies are currently facing many uncertainties
associated with the Russia-Ukraine conflict as well as soaring
energy prices and rising inflation. In addition, whilst the arrival
of a number of Covid-19 vaccines and the associated roll-out of
global vaccination programs has allowed for a full reopening of
society in many countries during the first quarter of 2022, the
full economic fallout from this two-year pandemic remains uncertain
and the financial support measures taken during the period have
left governments heavily indebted.
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 .
Michael Bretherton
Chairman
7 July 2022
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
2022
Year ended Year ended
31 March 2022 31 March 2021
GBP'000 GBP'000
-------------------------------------------------------- --------------- ----------------
Dividend income - 3
(Loss) / gain on investments (1,571) 3,234
--------------------------------------------------------- --------------- ----------------
Investment return (1,571) 3,237
Expenses and other income
Administrative expenses (160) (153)
Other income - -
-------------------------------------------------------- --------------- ----------------
Operating (loss) / profit (1,731) 3,084
Interest income - 6
--------------------------------------------------------- --------------- ----------------
(Loss) / profit on ordinary activities before taxation (1,731) 3,090
Tax on profit on ordinary activities - -
-------------------------------------------------------- --------------- ----------------
(Loss) / profit for the year (1,731) 3,090
--------------------------------------------------------- --------------- ----------------
Basic and diluted (loss) / profit per share (1.21)p 3.74p
--------------------------------------------------------- --------------- ----------------
Statement of Financial Position at 31 March 2022
31 March 31 March
2022 2021
GBP'000 GBP'000
----------------------------- --------- -----------
Assets
Non-current assets
Investments 6,622 5,105
------------------------------ --------- -----------
Current assets
Trade and other receivables 12 22
Cash and cash equivalents 871 49
------------------------------ --------- -----------
Current assets 883 71
------------------------------ --------- -----------
Total assets 7,505 5,176
------------------------------ --------- -----------
Liabilities
Current liabilities
Trade and other payables (25) (23)
------------------------------ --------- -----------
Total liabilities (25) (23)
------------------------------ --------- -----------
Net current assets 858 48
------------------------------ --------- -----------
Net assets 7,480 5,153
------------------------------ --------- -----------
Equity
Share capital 1,459 826
Share premium 3,425 -
Retained earnings reserve 2,596 4,327
------------------------------ --------- -----------
Total shareholder equity 7,480 5,153
------------------------------ --------- -----------
Statement of Changes in Equity as at 31 March 2022
Share Capital Share premium Retained earnings reserve Total
GBP'000 GBP'000 GBP'000 GBP'000
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
--------------------------- -------------- -------------- -------------------------- --------
Issue of shares 633 3,482 - 4,115
Share issue costs - (57) - (57)
Changes in equity
Total comprehensive loss - - (1,731) (1,731)
--------------------------- -------------- -------------- -------------------------- --------
At 31 March 2022 1,459 3,425 2,596 7,480
--------------------------- -------------- -------------- -------------------------- --------
Statement of Cash Flows for the year ended 31 March 2022
Year ended Year ended
31 March
2021
31 March
2022 *Restated
GBP'000 GBP'000
(Loss)/profit for the year (1,731) 3,090
Unrealised loss/(gain) on revaluation
of portfolio investments 1,571 (2,644)
Realised gain on disposal of portfolio
investments - (590)
Increase in trade and other receivables 10 (13)
Increase/(decrease) in trade and other
payables 2 (5)
--------------------------------------------- ----------- --------------
Net cash outflow from operating activities (148) (162)
--------------------------------------------- ----------- --------------
Cash flows from investing activities
Purchase of portfolio investments (3,088) (1,900)
Proceeds from sales of investments - 1,207
--------------------------------------------- ----------- --------------
Net cash used in investing activities (3,088) (693)
--------------------------------------------- ----------- --------------
Cash flows from financing activities
Issue of new ordinary shares 4,058 -
Net cash generated from financing
activities 4,058 -
-------------------------------------------- ----------- --------------
Net increase / (decrease) in cash
and cash equivalents 822 (855)
Cash and cash equivalents at beginning
of year 49 904
--------------------------------------------- ----------- --------------
Cash and cash equivalents at end
of year 871 49
--------------------------------------------- ----------- --------------
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