REG - Adams PLC - Half-year Report
24/11/2022 07:01
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RNS Number : 4133H Adams PLC 24 November 2022
Adams plc
("Adams" or the "Company")
Interim Results for the Six Months ended 30 September 2022
Chairman's Statement
Adams Plc ("Adams" or the "Company") reported a loss after tax of £1.03
million for the half year to 30 September 2022, compared to a loss of £0.65
million in the comparative half year ended 30 September 2021. The increased
loss reflects continuing difficult financial market conditions and is
principally due to investment return losses of £0.95 million coupled with
overhead costs of £0.08 million (September 2021 half year: investment return
losses of £0.57 million coupled with overhead costs of £0.08 million).
During the six months ended 30 September 2022, the Company spent £0.63
million on two equity investments, one of which was a new investment and the
other being a follow-on investment. There were no investment realisations
during the period, but the reported half year loss includes a £0.10 million
full write down of our small investment in 4D Pharma Plc which went into
administration on 24 June 2022.
Adams held eleven investments as at 30 September 2022, of which nine were
listed and two were un-listed, and for which the total investment carrying
value was £6.30 million (31 March 2022: £6.62 million, represented by nine
listed and two un-listed investment holdings).
The Company held cash balances of £0.16 million as at 30 September 2022,
compared to cash balances of £0.87 million at the previous 31 March 2022 year
end. Net assets reduced to £6.45 million (equivalent to 4.42p per share) at
the 30 September 2022 balance sheet date, compared with £7.48 million
(equivalent to 5.13p per share) at 31 March 2022. The £1.03 million decrease
in net assets reflects the 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 2022
comprised Niox Group Plc ("Niox" formerly known as Circassia Group Plc), C4X
Discovery Holdings Plc ("C4XD"), Seeing Machines Limited ("Seeing Machines")
and Access Intelligence Plc ("Access Intelligence") and Adams also holds
Oxehealth Limited ("Oxehealth") and Telit IOT Solutions Limited ("Telit") as
principal unquoted investments.
Niox is an AIM listed global medical device company focused on point of care
asthma diagnosis and management. Following a major restructuring and the
transfer of the Tudorza and Duaklir products back to AstraZeneca in March
2021, Niox has now been transformed into a debt-free business with a strong
NIOX® asthma management products based continuing operations business. The
group is progressing 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 six months ended 30 June 2022, sales
increased 11% to £15.5 million and generated an EBITDA profit of £3.2
million. The profit after tax for the period amounted to £9.2 million
inclusive of an £8.1 million settlement consideration recognised on milestone
payments due from Beyond Air Inc., following FDA approval for its LungFit PH
device, together with a profit of £0.3 million on discontinued operations.
The company had net cash balances of £13.8 million at 30 June 2022 and had
increased to £17.6 million at 31 August 2022 following receipt of the first
of 3 milestone payments due from Beyond Air. The shareholding of Adams at 30
September 2022 was, and continues to be, 0.73 per cent of the Niox shares in
issue.
C4XD is a pioneering drug discovery company combining its enhanced DNA-based
target identification and candidate molecule design capabilities to
efficiently deliver world‑leading medicines which are developed by licensing
partners. C4XD has a number of existing partnership deals including a
milestone and royalties agreement with Indivior UK Limited for its oral
Orexin-1 receptor antagonist for the treatment of opioid addiction disorders
worth up to $284 million and a second milestones and royalties out-licensing
agreement with Sanofi for its IL-17A inhibitor programme worth up to €414
million. There is also potential for single‐digit Sanofi royalties. In
addition, the company has continued to drive other key programmes towards
partnering with a near term focus on inflammatory and oncology diseases. C4XD
reported a loss after tax of £4.5 million in the six months ending 31 January
2022 inclusive of R&D investment of £3.9 million and with only minimal
revenues of £0.01 million. Cash balances at 31 January 2022 amounted to
£11.7 million but post that period end, the company raised cash of £5.7
million by way of a share placing in August 2022. The shareholding of Adams in
C4XD at 30 September 2022 was, and continues to be, 1.98 per cent of the C4XD
shares in issue.
Seeing Machines is an AIM listed industry leader in advanced computer vision
technologies. The company designs Artificial Intelligence / AI powered
operator monitoring systems using camera-based optics and embedded processing
to improve transport safety in automotive, commercial fleet, aviation, rail
and off-road markets. The technology incorporates warnings when human state
attention impairment is identified, in order to re-engage the operator or
driver. Seeing Machines continues to invest in R&D and grow as an
automotive leader in such technology having now won contracts with a total of
ten automotive Tier 1 global customers covering 14 automotive driver
monitoring safety ("DMS") programmes. At 30 June 2022, there were 447,225
vehicles on the road featuring Seeing Machines' DMS technology, an increase of
246% over the previous period. In the year to 30 June 2022, Seeing Machines
reported underlying revenue growth of 22 per cent when using constant
currency, to give revenues of A$54.4 million and a loss for the year of A$25.3
million. Seeing Machines' cash balances at 30 June 2022 amounted to A$58.8
million and were subsequently strengthened in October 2022 through a US$65m
(A$103m) investment in the company by an existing customer, Magna
International, via an exclusivity payment of US$17.5m and up to $47.5m of
convertible loan notes which mature in October 2026 and have a conversion rate
per ordinary share of £0.11. The shareholding of Adams in Seeing Machines as
at 30 September 2022 was, and continues to be, 0.19 per cent of the Seeing
Machines shares in issue.
Access Intelligence is an AIM listed London based technology innovator
delivering Artificial Intelligence / AI Software-as-a-Service solutions for
the global 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. For the half year ended 31 May
2022, Access Intelligence reported revenues of £32.7 million and delivered a
positive EBITDA of £0.3 million before exceptional costs associated with the
integration of Isentia Group which had been acquired in September 2021. The
loss for the half year amounted to £7.0 million after exceptional costs and
inclusive of additional investment in sales and marketing to drive global
expansion. During the period, the group delivered continued growth in the EMEA
and North America region and won a substantial number of blue-chip clients
across every region, including significant win backs in the APAC region. The
shareholding of Adams in Access Intelligence as at 30 September 2022 was, and
continues to be, 0.51 per cent of the Access Intelligence shares in issue.
Oxehealth is a private company and an industry leader in vision-based patient
monitoring and management systems. The company uses 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 and more recently the USA. 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, and
which generate alerts to potentially risky activity and reports on a patient's
vital signs and behaviour. This can all be done without the clinician entering
the patient's room, including by use of mobile handsets on the ward. At 30
September 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 a global leader in Internet of Things (IoT)
enablement. Telit has over twenty years of experience designing, building, and
executing complex digital business. The company 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. In July 2022,
the company announced a transaction under which it will, subject to US
regulatory approval, acquire the cellular IoT products business of Thales and
thereby expand Telit's presence in the growing industrial IoT segments and end
markets, including payment systems, energy, e-health, and security. It will
also enhance the company's capabilities in the rapidly growing cybersecure IoT
solutions market. This transaction with Thales is expected to complete by the
end of 2022. At 30 September 2022, the investment holding by Adams in Telit
represents 0.47 per cent of Telit's issued share capital at that date.
In addition to the above investments, at 30 September 2022 Adams held quoted
holdings in five other listed companies comprising Griffin Mining Limited,
which 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; Tremor International Ltd, which
is an AIM listed advertising-technology company focused on digital advertising
including video, mobile, native, display technology, and connected TV; Source
Bioscience International Plc, which is an AIM listed international provider of
state-of-the art laboratory services, clinical diagnostics and analytical
testing services; Euromax Resources Ltd, which is a Canadian development
company listed on the Toronto Stock Exchange and focused on building and
operating the Ilovica-Shtuka copper and gold project in Macedonia; and Afentra
Plc, which is an AIM listed upstream oil and gas company focused on acquiring
mature production and development assets in Africa.
Outlook
World economies are currently facing many uncertainties associated high levels
of inflation and rising interest rates, coupled with a cost-of-living crisis,
Russia's invasion of Ukraine and the lingering impact of COVID-19 and
potential new variants. In addition, the COVID financial support measures
taken during the last few years and the support for Ukraine's war efforts,
have left governments heavily indebted and with fiscal tightening now expected
to follow in many regions.
Your Board will, therefore, continue to maintain a rigorous and highly
selective investment approach, coupled with strict cost control with a view 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
24 November 2022
Certain information contained in this announcement would have been deemed
inside information for the purposes of UK Market Abuse Regulation 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 Capital Limited
Heena Karani, Martin Lampshire Tel: +44 207 469 3393
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 2022
Year ended 31 Mar 2022
6 months ended 6 months ended
30 Sep 2022 30 Sep 2021
Note (Unaudited) (Audited) (Unaudited)
£'000 £'000 £'000
Loss on investments 5 (947) (1,571) (567)
Investment return (947) (1,571) (567)
Expenses and other income
Administrative expenses (82) (160) (81)
Operating loss (82) (160) (81)
Interest income - - -
Loss before income tax (1,029) (1,731) (648)
Income tax expense - - -
Loss and total comprehensive
loss for the period (1,029) (1,731) (648)
Basic and diluted loss per share 10 (0.70)p (1.21)p (0.46)p
There are no other items of comprehensive income or loss.
The notes form an integral part of the financial statements.
STATEMENT OF FINANCIAL POSITION
AS AT 30 SEPTEMBER 2022
As at As at As at
30 Sep 2022 31 Mar 2022 30 Sep 2021
(Unaudited) (Audited) (Unaudited)
Note £'000 £'000 £'000
Assets
Non-current assets
Investments 6 6,300 6,622 7,486
Current assets
Trade and other receivables 7 4 12 3
Cash and cash equivalents 163 871 1,089
Total current assets 167 883 1,092
Total assets 6,467 7,505 8,578
Liabilities
Current liabilities
Trade and other payables 8 (16) (25) (16)
Total liabilities (16) (25) (16)
Net current assets 151 858 1,076
Net assets 6,451 7,480 8,562
Equity
Called up share capital 9 1,459 1,459 1,459
Share premium 9 3,425 3,425 3,425
Accumulated gains 1,567 2,596 3,678
Total shareholder equity 6,451 7,480 8,562
The notes form an integral part of the financial statements.
The condensed interim financial statements were approved and authorised for
issue by the Board of Directors on 24 November 2022 and signed on its behalf
by:
Michael Bretherton
Chairman
STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTH PERIOD TO 30 SEPTEMBER 2022
Share Share Premium Accumulated Gains Total
Capital
£'000 £'000 £'000 £'000
At 31 March 2021 (audited) 826 - 4,327 5,153
Issue of shares 633 3,482 - 4,115
Share issue costs - (57) - (57)
Total comprehensive loss for period - - (649) (649)
At 30 September 2021 (unaudited) 1,459 3,425 3,678 8,562
Total comprehensive loss for period - - (1,082) (1,082)
At 31 March 2022 (audited) 1,459 3,425 2,596 7,480
Total comprehensive loss for period - - (1,029) (1,029)
At 30 September 2022 (unaudited) 1,459 3,425 1,567 6,451
The notes form an integral part of the financial statements.
STATEMENT OF CASH FLOWS
FOR THE SIX MONTH PERIOD TO 30 SEPTEMBER 2022
Year
6 months ended 6 months
ended 31 Mar 2022 ended
30 Sep 2022 30 Sep 2021
(Unaudited) (Audited) (Unaudited)
£'000 £'000 £'000
Loss for the period (1,029) (1,731) (648)
Unrealised loss on revaluation of investments 947 1,571 567
Realised gain on disposal of investments - - -
Decrease in trade and other receivables 8 10 19
(Decrease)/increase in trade and other payables (9) 2 (8)
Net cash outflows from operating activities (83) (148) (70)
Cash flows from investing activities
Purchase of investments (625) (3,088) (2,948)
Net cash outflows from investing activities (625) (3,088) (2,948)
Cash flows from financing activities
Issue of share capital net of costs - 4,058 4,058
Net cash inflows from financing activities - 4,058 4,058
Net (decrease)/increase in cash and cash equivalents (708) 822 1,040
Cash and cash equivalents at beginning of period 871 49 49
Cash and cash equivalents at end of period 163 871 1,089
The notes form an integral part of the financial statements.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTH PERIOD TO 30 SEPTEMBER 2022
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 2022. These include
unaudited comparatives for the six months ended 30 September 2021 together
with audited comparatives for the year ended 31 March 2022.
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 2023 which are based on the recognition and measurement principles of
International Financial Reporting Standards (IFRS) as adopted by the United
Kingdom (UK). 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 2022.
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 UK 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. 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 2022 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
2022 were as follows:
6 months ended 30 Sep 2022 Year ended 6 months ended 30 Sep 2021
31 Mar 2022
£'000 £'000 £'000
Unrealised loss on investments (947) (1,571) (567)
Realised gains on investments - - -
Total loss on investments (947) (1,571) (567)
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 Total
£'000 £'000 £'000 £'000
Fair value at 31 March 2021 3,982 566 557 5,105
Additions at cost 2,624 1,196 - 3,820
Disposals (858) - - (858)
Unrealised revaluation losses (212) 18 (387) (581)
Fair value at 30 September 2021 5,536 1,780 170 7,486
Additions at cost - 126 - 126
Disposals - - - -
Unrealised revaluation losses (843) 14 (161) (990)
Fair value at 31 March 2022 4,693 1,920 9 6,622
Additions at cost 625 - - 625
Disposals - - - -
Unrealised revaluation losses (938) - (9) (947)
Fair value at 30 September 2022 4,380 1,920 - 6,300
7 Trade and other receivables
As at As at As at
30 Sep 2022 31 Mar 2022 30 Sep 2021
£'000 £'000 £'000
Prepayments 4 12 3
4 12 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 2022 31 Mar 2022 30 Sep 2021
£'000 £'000 £'000
Trade payables 7 8 8
Accruals and other creditors 9 17 8
16 25 16
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 2021 145,859,231 1,459 3,425
Issue of shares - - -
At 31 March 2022 145,859,231 1,459 3,425
Issue of shares - - -
At 30 September 2022 145,859,231 1,459 3,425
The authorised Ordinary share capital of the Company at 30 September 2022, 31
March 2022 and 30 September 2022 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 2022 30 Sep 2021
30 Sep 2022
Loss after tax attributable to equity holders of the Company (£'000) (1,029) (1,731) (648)
Weighted average number of Ordinary Shares 145,859,231 142,856,154 141,379,226
Basic and diluted loss per share (p) (0.70) (1.21) (0.46)
There were no potentially dilutive shares in issue as at 30 September 2022, 31
March 2022 or 30 September 2021.
11 Half year interim report
A copy of this half year interim report, as well as the annual statutory
accounts to 31 March 2022, are available on the Company's website at
www.adamsplc.co.uk (http://www.adamsplc.co.uk) .
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