TIDMADA
RNS Number : 4313R
Adams PLC
30 June 2020
30 June 2020
Adams Plc
("Adams" or the "Company")
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEARED 31 MARCH
2020
Adams Plc presents its annual report and audited financial
results for the year ended 31 March 2020.
Highlights:
- Net assets at 31 March 2020 of GBP2.06 million (2019: GBP2.37million).
- Net assets per share 2.50 pence at 31 March 2020 (2019: 2.87 pence).
- Loss after tax of GBP0.30 million (2019: profit GBP0.26 million).
- Investments at 31 March 2020 valued at GBP1.18 million (2019: GBP2.08 million).
- Spend on new investments of GBP1.38 million (2019: GBP0.21 million).
- Investment realisation proceeds of GBP2.03 million (2019: GBP0.53 million).
- Cash at 31 March 2020 of GBP0.90 million (2019: GBP0.32 million).
- No part of the GBP3.00 million shareholder loan facility drawn down to date.
Michael Bretherton, Chairman, said:
"The full economic fallout from the Covid-19 pandemic remains
uncertain but continued volatility can be expected. 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 2020 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 Friday 21 August 2020 at the Companies
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 reported a loss after tax of GBP303,000 for the year ended
31 March 2020 compared to a profit of GBP257,000 in the prior year.
The reduction in profitability is principally due to adverse
conditions in financial markets, in part as a result of the
coronavirus (COVID-19) outbreak, with a resultant loss on
investments of GBP245,000 l in the year versus a corresponding gain
of GBP317,000 for the prior year.
During the year, the Company spent GBP1.38 million on the
purchase of additional investments and realised proceeds of GBP2.03
million from investment disposals. The carrying value of
investments at 31 March 2020 was GBP1.18 million, represented by
five listed and one un-listed investment holdings, versus GBP2.08
million at 31 March 2019, represented by three listed and one
un-listed investment holdings.
Net assets reduced to GBP2.06 million (equivalent to 2.50 pence
per share) at the 31 March 2020 balance sheet date, compared with
GBP2.37 million (equivalent to 2.87 pence per share) at the
previous year end. The GBP0.30 million reduction in net assets
reflects the loss reported for the year.
Cash and cash equivalent balances were GBP0.90 million at 31
March 2020 compared to cash balances of GBP0.32 million at 31 March
2019.
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 31 March 2020
comprised Circassia Pharmaceuticals plc ("Circassia"), Diurnal
Group Plc ("Diurnal"), TalkTalk Telecom Group Plc ("Talk Talk"),
Griffin Mining Limited ("Griffin") and 4D Pharma Plc ("4D Pharma").
In addition, the Company holds shares and loan notes in unquoted
Sherwood Holdings Limited ("Sherwood") which has Source Bioscience
Limited ("Source Bioscience") as its principal subsidiary company
asset.
Circassia is an AIM listed specialty pharmaceutical company
focused on respiratory disease and which markets innovative asthma
management products focussed on the ventilator-compatible novel
nitric oxide Niox(R) respiratory diagnostic platform. 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) that will 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 will
retain its 18.9% shareholding in the company. Revenues amounted to
GBP62.4 million for the year ended 31 December 2019, which coupled
with continued significant investment in development and marketing,
resulted in an underlying continuing operations loss after tax of
GBP39.0 million for that year. The shareholding of Adams at 31
March 2020 was, and continues to be, 0.82% 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 GBP1.1 million for the six months to 31 December
2019, which coupled with continued significant investment in
research and development and marketing, resulted in a loss after
tax of GBP4.0 million for that half year period. The shareholding
of Adams at 31 March 2020 was, and continues to be, 0.66% of the
Diurnal shares in issue.
Talk Talk is a Main Market listed connectivity provider of
landline, broadband, TV and mobile services to consumer and
business customers. In January 2020, TalkTalk announced the sale of
its FibreNation business for GBP200m to CityFibre in a process to
simplify its business and reduce debt. It continues to offer 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 O
that are only available to TalkTalk customers. For the year ended
31 March 2020, Talk Talk reported preliminary results showing a
profit before tax of GBP131 million on revenues of GBP1,569
million. The shareholding of Adams at 31 March 2020 was, and
continues to be, 0.02% 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 year ended 31 December 2019, Griffin reported a
much reduced profit of US$6.1 million after tax on revenues of
US$82.3 million, reflecting falling zinc metal prices and
significantly higher smelter treatment charges. The coronavirus
outbreak resulted in a cessation of mining operations in early
2020, but the company subsequently announced that following the
gradual lifting of restrictions in February and March, operations
steadily increased such that by 24 March 2020, underground mining
and processing operations had reached 100%, and 75% respectively,
of planned output. The shareholding of Adams in Griffin at 31 March
2020 was, and continues to be, 0.13% of the Griffin shares in
issue.
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 year ended 31 December 2019 of GBP24.1
million inclusive of GBP26.5 million of research and development
expenditure. Cash and short-term deposits at 31 December 2019
amounted to GBP3.8 million and 4D Pharma subsequently raised gross
proceeds of GBP22.0 million through a placing of new shares at 50
pence per share in March 2020. The shareholding of Adams at 31
March 2020 was, and continues to be, 0.14% of the 4D Pharma shares
in issue.
Source Bioscience is a private company that 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. The shareholding of Adams in Sherwood, which has Source
Bioscience as its principal subsidiary company asset, at 31 March
2020 was, and continues to be, 0.18% of the Sherwood shares in
issue. In addition, Adams holds unquoted loan notes in Sherwood
with a value of GBP0.124 million at 31 March 2020.
Post year-end investment transaction. Subsequent to the
Company's 31 March 2020 year end, Adams committed to invest GBP0.57
million in Oxehealth Limited ("Oxehealth") by way of two share
subscription payments, the first of which was for GBP0.34 million
and was paid on 11 June 2020 and the second payment of GBP0.23
million is scheduled to be paid on around 11 November 2020.
Following this second share subscription, the investment holding by
Adams will represent 2.4% of Oxehealth's issued ordinary share
capital. Oxehealth is a private company that uses proprietary
signal processing and computer vision to process normal digital
video camera data to remotely 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.
Adams is expected to have remaining cash balances of
approximately GBP0.24 million following the second final Oxehealth
share subscription payment, in addition to an unused shareholder
loan facility of GBP3.0 million as set out in note 14 to the
Financial Statements included in the Annual Report, available for
further investment as and when the directors identify appropriate
attractive opportunities to exploit.
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 further adversely impacted
subsequent to our 31 March 2020 year end and positive news at some
of the companies within our investment portfolio has in fact helped
to generate unrealised gains which are estimated to have resulted
in a profit for the first two and a half months of the current
financial year of approximately GBP0.3 million.
Outlook
The full economic fallout from the Covid-19 pandemic remains
uncertain but is likely to be severe and cripple even the most
resilient of markets, threatening national and global growth. Bold
policy measures involving unprecedented levels of public debt will
be needed to protect the most vulnerable from economic ruin and to
recover to a position of economic growth and financial stability.
In the meantime, continued volatility can be expected.
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.
Michael Bretherton
Chairman
29 June 2020
Statement of Comprehensive Income for the year ended 31 March
2020
Year ended Year ended
31 March 2020 31 March 2019
GBP'000 GBP'000
-------------------------------------------------------- --------------- ----------------
Dividend income 83 87
(Loss) / gain on investments (245) 317
--------------------------------------------------------- --------------- ----------------
Investment return (162) 404
Expenses and other income
Administrative expenses (152) (172)
Other income 1 14
--------------------------------------------------------- --------------- ----------------
Operating (loss) / profit (313) 246
Interest income 10 11
--------------------------------------------------------- --------------- ----------------
(Loss) / profit on ordinary activities before taxation (303) 257
Tax on profit on ordinary activities - -
-------------------------------------------------------- --------------- ----------------
(Loss) / profit for the year (303) 257
--------------------------------------------------------- --------------- ----------------
Basic and diluted (loss) / profit per share (0.37)p 0.31p
--------------------------------------------------------- --------------- ----------------
Statement of Financial Position at 31 March 2020
31 March 31 March
2020 2019
GBP'000 GBP'000
--------------------------- --------- -----------
Assets
Non-current assets
Investments 1,178 2,075
---------------------------- --------- -----------
Current assets
Prepayments 9 2
Cash and cash equivalents 904 315
---------------------------- --------- -----------
Current assets 913 317
---------------------------- --------- -----------
Total assets 2,091 2,392
---------------------------- --------- -----------
Liabilities
Current liabilities
Trade and other payables (28) (26)
---------------------------- --------- -----------
Total liabilities (28) (26)
---------------------------- --------- -----------
Net current assets 885 291
---------------------------- --------- -----------
Net assets 2,063 2,366
---------------------------- --------- -----------
Equity
--------------------------- --------- -----------
Called up share capital 826 826
Retained earnings reserve 1,237 1,540
---------------------------- --------- -----------
Total shareholder equity 2,063 2,366
---------------------------- --------- -----------
Statement of Changes in Equity as at 31 March 2020
Share Foreign currency Retained earnings
Share Capital Premium translation reserve reserve Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 April 201 8 1,001 1,401 (244) (49) 2,109
Changes in equity
Redenomination of share
capital (175) 175 - - -
Elimination of foreign
currency
reserve - (244) 244 - -
Reclassification of share
premium - (1,332) - 1,332 -
Total comprehensive gain - - - 257 257
-------------------------- -------------- --------- ------------------------ ------------------------- --------
At 31 March 2019 826 - - 1,540 2,366
-------------------------- -------------- --------- ------------------------ ------------------------- --------
Changes in equity
Total comprehensive loss - - - (303) (303)
-------------------------- -------------- --------- ------------------------ ------------------------- --------
At 31 March 2020 826 - - 1,237 2,063
-------------------------- -------------- --------- ------------------------ ------------------------- --------
Statement of Cash Flows for the year ended 31 March 2020
Year ended Year ended
31 March
2019
31 March
2020 *Restated
GBP'000 GBP'000
(Loss) / profit for the year (303) 257
Unrealised loss/(gain) on revaluation
of portfolio investments 319 (174)
Realised gain on disposal of portfolio
investments (74) (143)
Increase in trade and other receivables (7) -
Increase in trade and other payables 2 5
--------------------------------------------- ----------- -------------
Net cash outflow from operating activities (63) (55)
--------------------------------------------- ----------- -------------
Cash flows from investing activities
Purchase of portfolio investments (1,378) (211)
Proceeds from sales of investments 2,030 529
--------------------------------------------- ----------- -------------
Net cash generated from investing
activities 652 318
--------------------------------------------- ----------- -------------
Net increase in cash and cash equivalents 589 263
Cash and cash equivalents at beginning
of year 315 52
--------------------------------------------- ----------- -------------
Cash and cash equivalents at end of
year 904 315
--------------------------------------------- ----------- -------------
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END
FR KKCBPPBKDCAB
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