TIDMADA
RNS Number : 5378G
Adams PLC
26 November 2020
Adams plc
("Adams" or the "Company")
Interim Results for the Six Months ended 30 September 2020
Results
Adams Plc ("Adams" or the "Company") reported a profit after tax
of GBP1,091,000 for the six months to 30 September 2020 compared to
a loss of GBP46,000 in the six months ended 30 September 2019. The
improvement in profitability is principally due to higher
investment returns of GBP1,162,000 compared to GBP23,000 in the
previous September 2019 half year.
During the six months ended 30 September 2020, the Company spent
GBP451,000 on equity investments, of which one was a new investment
and one was a follow-on investment, and generated cash proceeds of
GBP602,000 from the partial realisation of two of its investments.
Adams held seven investments as at 30 September 2020, of which five
were listed and two were un-listed, and for which the total
investment carrying value was GBP2.19 million (31 March 2020:
GBP1.18 million, represented by five listed holdings and one
un-listed holding).
The Company held cash balances of GBP972,000 as at 30 September
2020, compared to cash balances of GBP904,000 at the previous 31
March 2020 year end.
Net assets increased to GBP3.15 million (equivalent to 3.82p per
share) at the 30 September 2020 balance sheet date, compared with
GBP2.06 million (equivalent to 2.50p per share) at 31 March 2020.
The GBP1.09 million increase in net assets reflects the profit
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 listed investments held by the Company at 30 September 2020
comprised Circassia Group plc ("Circassia"), Diurnal Group Plc
("Diurnal"), 4D Pharma Plc ("4D Pharma"), TalkTalk Telecom Group
Plc ("Talk Talk"), and Griffin Mining Limited ("Griffin"). In
addition, the Company held shares in unquoted Oxehealth Limited
("Oxehealth") and shares and loan notes in unquoted Sherwood
Holdings Limited ("Sherwood") which has Source Bioscience Limited
as its principal subsidiary company asset. Subsequent to 30
September 2020, the loan notes in Sherwood were redeemed by
conversion into Sherwood shares and Sherwood's name was changed to
Source Bio International Plc ("Source Bio") and its shares were
admitted to AIM on 29 October 2020.
Circassia is an AIM listed diagnostics and monitoring company
focused on respiratory disease. Its market leading NIOX(R) products
are used by physicians around the world to help improve asthma
diagnosis and management. In April 2020, the company announced a
transaction to terminate the development and commercialisation
agreement between the company and AstraZeneca UK Limited for the
U.S. commercial rights to Tudorza(R) and Duaklir(R) in order to
transform Circassia into a debt-free business with a strong Niox(R)
based revenue-generating business and the potential to expand into
new territories. AstraZeneca has retained its 18.9 per cent
shareholding in the company. Revenues for the 6 months to 30 June
2020 amounted to GBP11.4 million which coupled with continued
investment in development and marketing, resulted in a continuing
operations loss after tax of GBP9.4 million for that half year.
Circassia had net cash of GBP9.6 million as of 30 June 2020.The
shareholding of Adams at 30 September 2020 was, and continues to
be, 0.77 per cent of the Circassia shares in issue.
Diurnal is an AIM listed specialty pharmaceutical company
dedicated to developing high-quality hormone therapeutics to aid
lifelong treatment for rare and chronic endocrine conditions,
initially by developing and marketing products for the rare orphan
diseases congenital adrenal hyperplasia and adrenal insufficiency,
including its Alkindi(R) and Chronocort(R) products. Initial
revenues grew to GBP6.3 million for the year to 30 June 2020, which
coupled with lower operating costs, resulted in a much reduced loss
after tax of GBP4.1 million for that year. Cash balances at 30 June
2020 amounted to GBP15.4 million inclusive of GBP11.2 million
raised under a share placing in March 2020. Diurnal subsequently
raised a further GBP9.8 million of cash under a share placing in
October 2020.The shareholding of Adams at 30 September 2020 was
0.39 per cent of the Diurnal shares in issue but this has reduced
to 0.34 per cent consequent to the recent share placing in
October.
4D Pharma is an AIM listed pioneer in harnessing bacteria of the
gut microbiome as a novel and revolutionary class of medicines,
known as live biotherapeutics, which could be used as potential new
therapies for a large number of diseases including cancer,
gastrointestinal disease, respiratory disease and central nervous
system disease. The company has initiated multiple live
biotherapeutic programmes across a broad range of therapeutic areas
and has also entered a clinical collaboration with Merck & Co.
to evaluate a lead immuno-oncology candidate. 4D Pharma incurred a
loss after tax for the 6 months to 30 June 2020 of GBP13.6 million
on revenues of GBP0.3 million. Cash and short-term deposits at 30
June 2020 amounted to GBP10.0 million and 4D Pharma subsequently
raised gross proceeds of GBP7.7 million through a share placing in
July 2020. In October 2020, 4D Pharma announced its intention to
merge with Longevity Acquisition Corporation, a special purpose
acquisition company, and to seek a NASDAQ listing. The merger and
NASDAQ listing is currently expected to become effective in early
2021, subject to shareholder approvals. The shareholding of Adams
at 30 September 2020 was, and continues to be, 0.15 per cent of the
4D Pharma shares in issue.
Talk Talk is a Main Market listed connectivity provider of
landline, broadband, TV and mobile services to consumer and
business customers. It offers both consumer and business customers
access to fibre broadband connectivity and also offers data
solutions to business customers at great value through its high
margin ethernet-based services. Talk Talk has a compelling TV
proposition that allows customers to access up to 80 Freeview
channels, as well as flexible access to an extensive range of
premium content from Sky, BT Sport and Netflix. Its mobile services
provide unique offers in partnership with O2 that are only
available to TalkTalk customers. For the year ended 31 March 2020,
the company reported a profit before tax of GBP131 million on
revenues of GBP1,569 million. In October 2020, Talk Talk announced
that it had received a preliminary and non-binding proposal from
Toscafund Asset Management LLP ("TAM") regarding a possible cash
offer for the company, together with a full unlisted share
alternative offer, and which its board has agreed to consider and
progress. The shareholding of Adams at 30 September 2020 was, and
continues to be, 0.02 per cent of the TalkTalk shares in issue.
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. For the 6 months to 30 June 2020, Griffin reported a
loss of US$3.8 million after tax on reduced revenues of US$21.3
million, as impacted by the suspension of operations early in the
year as a result of the COVID-19 outbreak, together with falling
zinc metal prices which were 18% lower than for the first half of
2019. The shareholding of Adams in Griffin as at 30 September 2020
was, and continues to be, 0.13 per cent of the Griffin shares in
issue.
Source Bio is an international provider of state-of-the art
laboratory services and products and has an expertise in clinical
diagnostics, genomics, proteomics, drug discovery & development
research and analytical testing services. For the 6 months to 30
June 2020, Source Bio generated earnings of GBP1.7 million before
interest, depreciation and amortisation, on revenues of GBP10.2
million. Source Bio subsequently redeemed all of its loan notes and
converted these to shares ahead of listing its shares on AIM on 29
October 2020 in conjunction with a share placing at that time to
raise gross proceeds of GBP35.0 million. Following these events,
the current shareholding of Adams in Source Bio is 0.12 per cent of
the Source Bio shares in issue and Adams no longer holds any loan
notes in the company.
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 (DCA)
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. As at 30 September 2020, Adams had
invested GBP0.34 million under a subscription agreement with
Oxehealth and was committed under that agreement to invest a
further GBP0.23 million which is scheduled to be completed on 27
November 2020. Following this second share subscription, the
investment holding by Adams will represent 2.4 per cent of
Oxehealth's issued share capital.
Post 30 September 2020 investment transactions.
In addition to the further investment of GBP0.23 million in
Oxehealth referred to above, Adams committed to subscribe
GBP700,000 for 5,000,000 units in C4X Discovery Holdings Plc
("C4XD") under a conditional placing by C4XD which completed on 11
November 2020. Each C4XD unit comprises 1 new C4XD ordinary share
and 1 warrant. Following this investment, Adams holds 2.2 per cent
of C4XD's issued share capital and also has warrants over a further
5,000,000 new C4DX ordinary shares. C4XD aims to create the world's
most productive Drug Discovery engine by using cutting-edge
technologies and expertise to efficiently deliver best-in-class
small-molecule medicines to clinical partners for the benefit of
patients. The C4XD business model focuses on replenishing big
pharma discovery pipelines and driving returns through revenue
generating pre-clinical licensing deals.
COVID-19 update
The coronavirus (Covid-19) outbreak in 2020 continues to have a
negative impact on global economic activity and additional
volatility in financial markets can be expected. Adams' investment
portfolio has, however, not been adversely impacted subsequent to
its 30 September 2020 interim period end and following the second
share subscription in Oxehealth expected to be completed on 27
November 2020, the Company will have remaining cash balances of
approximately GBP0.1 million plus investments with a carrying value
of approximately GBP3.4 million represented by seven listed
holdings and one un-listed holding.
Outlook
There is much reason for investment caution in the near term,
given the severe economic threat to the global economy from the
ongoing Covid-19 pandemic, as well as Brexit uncertainties and
unprecedented levels of worldwide public debt. Continued volatility
in financial markets can, therefore, be expected.
In view of these economic threats and uncertainties, 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 COVID-19 environment.
Michael Bretherton
Chairman
25 November 2020
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
identi ed 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 re ect 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 2020
6 months 6 months
ended Year ended ended
30 Sep 2020 31 Mar 2020 30 Sep 2019
Note (Unaudited) (Audited) (Unaudited)
GBP'000 GBP'000 GBP'000
Gain/(loss) on investments 5 1,159 (245) (31)
Dividend income 3 83 54
-------------- ------------- -------------
Investment return 1,162 (162) 23
Expenses and other income
Administrative expenses (77) (152) (73)
Other income - 1 -
Operating profit/(loss) 1,085 (313) (50)
Interest income 6 10 4
Profit/(loss) before income tax 1,091 (303) (46)
Income tax expense - - -
Profit/(loss) and total comprehensive
-------------- ------------- -------------
income/(loss) for the period 1,091 (303) (46)
============== ============= =============
Basic and diluted earnings/(loss)
per share 10 1.32 (0.37)p (0.06)p
-------------- ------------- -------------
STATEMENT OF FINANCIAL POSITION
AS AT 30 SEPTEMBER 2020
As at As at As at
30 Sep 2020 31 Mar 2020 30 Sep 2019
(Unaudited) (Audited) (Unaudited)
Note GBP'000 GBP'000 GBP'000
Assets
Non-current assets
Investments 6 2,187 1,178 2,024
Current assets
Trade and other receivables 7 3 9 3
Cash and cash equivalents 972 904 309
------------- ------------- -------------
Current assets 975 913 312
------------- ------------- -------------
Total assets 3,162 2,091 2,336
------------- ------------- -------------
Liabilities
Current liabilities
Trade and other payables 8 (8) (28) (16)
------------- ------------- -------------
Total liabilities (8) (28) (16)
------------- ------------- -------------
Net current assets 967 885 296
------------- ------------- -------------
Net assets 3,154 2,063 2,320
============= ============= =============
Equity
Called up share capital 9 826 826 826
Accumulated gains 2,328 1,237 1,494
Total shareholder equity 3,154 2,063 2,320
============= ============= =============
STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTH PERIOD TO 30 SEPTEMBER 2020
Share
Capital Accumulated gains/(losses) Total
GBP'000 GBP'000 GBP'000
At 31 March 2019 (audited) 826 1,540 2,366
--------- --------------------------- --------
Total comprehensive loss for period - (46) (46)
At 30 September 2019 (unaudited) 826 1,494 2,320
--------- --------------------------- --------
Total comprehensive loss for period - (257) (257)
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
========= =========================== ========
STATEMENT OF CASH FLOWS
FOR THE SIX MONTH PERIOD TO 30 SEPTEMBER 2020
6 months Year 6 months
ended ended ended
30 Sep 2020 31 Mar 2020 30 Sep 2019
(Unaudited) (Audited) (Unaudited)
GBP'000 GBP'000 GBP'000
Profit/(loss) for the period 1,091 (303) (46)
Unrealised (gain)/loss on revaluation
of investments (736) 319 277
Realised gain on disposal of investments (423) (74) (246)
Decrease/(Increase) in trade and
other receivables 6 (7) (1)
(Decrease)/increase in trade and
other payables (20) 2 (10)
Net cash outflows from operating
activities (82) (63) (26)
-------------- ------------- -------------
Cash flows from investing activities
Proceeds from sales of investments 602 2,030 579
Purchase of investments (451) (1,378) (559)
Net cash generated from investing
activities 151 652 20
-------------- ------------- -------------
Net increase/(decrease) in cash
and cash equivalents 69 589 (6)
Cash and cash equivalents at beginning
of period 903 315 315
Cash and cash equivalents at end
of period 972 904 309
============== ============= =============
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTH PERIOD TO 30 SEPTEMBER 2020
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 2020. These include unaudited comparatives for the six
months ended 30 September 2019 together with audited comparatives
for the year ended 31 March 2020.
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 2020 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 2020. 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
impact of the pandemic on the Company and its investments cannot be
quantified, however the Directors consider that there is no
immediate expectation for the Covid-19 pandemic to affect the going
concern status of the Company. 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 2020 which received an
unqualified audit opinion. A copy of these financial statements is
available on the Company website at 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 2020 were as follows:
6 months 6 months
ended 30 Year ended ended 30
Sep 2020 31 Mar 2020 Sep 2019
GBP'000 GBP'000 GBP'000
Unrealised gain/(loss) on
investments 736 (319) (277)
Realised gains on investments 423 74 246
------------------- ------------------- -------------------
Total gain/(loss) on investments 1,159 (245) (31)
=================== =================== ===================
6 Investments
An analysis of movements in the value of the Company's
investments is as follows:
Quoted Equity Unquoted Unquoted
Shares Equity Shares Loan Notes Total
GBP'000 GBP'000 GBP'000 GBP'000
Fair value at 31 March
2019 1,956 5 114 2,075
Additions at cost 555 - 4 559
Unrealised revaluation
losses (333) - - (333)
Disposals (277) - - (277)
Fair value at 30 September
2019 1,901 5 118 2,024
Additions at cost 813 - 6 819
Disposals (1,623) - - (1,623)
Unrealised revaluation
losses (42) - - (42)
-------------- --------------- ------------ --------
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
============== =============== ============ ========
7 Trade and other receivables
As at As at As at
30 Sep 2020 31 Mar 2020 30 Sep 2019
GBP'000 GBP'000 GBP'000
Prepayments 3 9 3
------------------- ------------------- -------------------
3 9 3
=================== =================== ===================
The carrying amount of prepayment is approximate to their fair
value.
8 Trade and other payables
As at As at As at
30 Sep 2020 31 Mar 2020 30 Sep 2019
GBP'000 GBP'000 GBP'000
Trade payables 1 14 11
Accruals and other creditors 7 14 5
8 28 16
============= =================== ===================
The carrying amount of trade and other payables approximates to
their fair value.
9 Share capital
Share capital
Ordinary shares Number of shares issued and fully paid up GBP'000
------------------------------------------ --------------
At 30 September 2019 82,553,232 826
------------------------------------------ --------------
Issue of shares - -
At 31 March 2020 82,553,232 826
------------------------------------------ --------------
Issue of shares - -
At 30 September 2020 82,553,232 826
------------------------------------------ --------------
The authorised Ordinary share capital of the Company at 30
September 2020, 31 March 2020 and 30 September 2019 was 350,000,000
Ordinary Shares with a nominal value of GBP0.01 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:
6 months Year 6 months
ended ended ended
30 Sep 2020 31 Mar 2020 30 Sep 2019
Profit/(loss) after tax attributable
to equity holders of the Company
(GBP'000) 1,091 (303) (46)
Weighted average number of Ordinary
Shares 82,553,232 82,553,232 82,553,232
Basic and diluted earnings/(loss)
per share 1.32 (0.37)p (0.06)p
There were no potentially dilutive shares in issue as at 30
September 2020, 31 March 2020 or 30 September 2019.
11 Events after the reporting date
On 9 June 2020 the Company announced its commitment to subscribe
for 21,630 new GBP0.001 Ordinary Shares in Oxehealth Limited at a
price of GBP26.19 per share. Settlement of the total cash
consideration of GBP566,490 was by way of two subscriptions, the
first of which was for GBP339,894 and completed on 11 June 2020 and
the second is for GBP226,596 and is scheduled to complete on 27
November 2020.
On 21 October 2020 the Company entered into an agreement to
subscribe GBP700,000 for 5,000,000 new units of C4X Discover
Holdings Plc ("C4XD") at a price of GBP0.14 each. Each unit
comprises of 1 new ordinary share and 1 warrant in C4XD with a
5-year expiration date. The placing was conditional upon the
approval of C4XD's shareholders at a general meeting on 9 November
2020 and the GBP700,000 investment by Adams completed on 11
November 2020.
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