REG - Adams PLC - Half-year Report
23/11/2023 07:00
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RNS Number : 3893U Adams PLC 23 November 2023
23 November 2023
Adams plc
("Adams" or the "Company")
Interim Results for the Six Months ended 30 September 2023
Chairman's Statement
Adams generated a net profit of £0.29 million for the six months ended 30
September 2023 compared to a loss of £1.03 million in the six months ended 30
September 2022.
The half year profit of £0.29 million comprises a net investment profit
return of £0.39 million, less overhead costs of £0.10 million. The
comparative 2022 half year loss of £1.03 million included a net investment
loss return of £0.95 million, together with administrative costs of £0.08
million.
During the half year, the Company spent £0.21 million on a new quoted equity
investment in NCC Group Plc and realised disposal proceeds of £0.34 million
on the sale of its Afrenta Plc and Tremor International Ltd investments in
full, together with a partial sale of its Seeing Machines Ltd investment
holding.
The carrying value of the Company's equity investments at 30 September 2023
was £5.31 million represented by eight quoted investment holdings and three
private investments (31 March 2023: £5.10 million represented by nine quoted
investment holdings and three private investments). In addition, Adams holds a
derivative investment asset in the form of warrants in C4X Holdings Plc which
have an exercise price that is significantly above the market price of the
underlying shares and the warrants are therefore considered to have a nil fair
value.
The Company held cash balances of £0.12 million as at 30 September 2023,
compared to cash balances of £0.05 million at the previous 31 March 2023 year
end.
Net assets increased to £5.40 million (equivalent to 3.70p per share) at the
30 September 2023 balance sheet date, compared with £5.11 million (equivalent
to 3.50p per share) at 31 March 2023. The £0.29 million increase in net
assets reflects the profit reported for the half 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 30 September 2023
(each representing at least 5% of the net asset value of the Company at that
date) comprised Niox Group Plc ("Niox"), C4X Discovery Holdings Plc ("C4XD"),
Seeing Machines Limited ("Seeing Machines"), Griffin Mining Limited
("Griffin") and Access Intelligence Plc ("Access Intelligence"). Adams also
holds Oxehealth Limited ("Oxehealth") and Telit Cinteron Ltd ("Telit") as
principal unquoted investments.
Niox is an AIM listed global medical device company focused on point of care
FeNO testing for the diagnosis and management of asthma. The NIOX VERO®
device is the market leader in point of care testing and is approved and
reimbursed in most major markets. The group is progressing its transition to a
distributor led 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 half year
ended 30 June 2023, sales increased 21% to £18.8 million and generated an
EBITDA profit of £6.2 million. The profit after tax for the period amounted
to £3.4 million. The company had net cash balances of £27.3 million at 31
August 2023 but subsequently paid out £10.5 million by way of a special 2.5
pence per share dividend in September 2023. The shareholding of Adams at 30
September 2023 was, and continues to be, 0.37 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 out-licensing agreement with Sanofi for its IL-17A
inhibitor programme worth up to €414 million plus potential for
single‐digit royalties and also an exclusive licensing agreement with
AstraZeneca for its NRF2 activator programme addressing the treatment of
inflammatory and respiratory diseases. The AstraZeneca agreement is worth up
to $402 million including pre-clinical milestone payments of up to $16
million ahead of the first clinical trial, with $2 million upfront. 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 £3.9 million in the six months ending 31 January
2023 inclusive of R&D investment of £5.2 million and with revenues of
£1.7 million. Cash balances at 31 January 2023 amounted to £9.6 million.
Subsequently, in August 2023, C4XD announced that its cash position would be
strengthened by a £15.95 million consideration settlement from Indivior UK
Limited to acquire the proprietary rights to the oral Orexin-1 receptor
antagonist partnership programme for the treatment of opioid addiction
disorders which Indivior would now take fully in-house. The shareholding of
Adams in C4XD at 30 September 2023 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
10 automotive Tier 1 global customers covering 15 automotive driver monitoring
safety ("DMS") programmes. A total of 6 OEM programs have now started
production, and at 30 June 2023, Seeing Machines' technology was installed in
over 1 million vehicles globally. In the year to 30 June 2023, Seeing Machines
also signed an exclusive licence Agreement with Collins Aerospace generating
licence revenue over three years of US$10m, to jointly develop pioneering
eye-tracking solutions for the Aviation industry. Seeing Machines reported
underlying revenue growth of 48% per cent during that year to 30 June 2023, to
give revenues of $57.8 million and a loss for the period of $15.5 million.
Seeing Machines' cash balances at 30 June 2023 amounted to $36.1 million. The
shareholding of Adams in Seeing Machines as at 30 September 2023 was, and
continues to be, 0.31 per cent of the Seeing Machines shares in issue.
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. 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 more than doubled to US$69.5 million for the 6 months 30 June
2023 and generated a profit after tax of US$5.2 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. Cash
balances at 30 June 2023 amounted to US$46.9 million and given the severely
undervalued nature of the company's share price, the Griffin Directors also
announced a share buy-back programme which was commenced in September 2023.
The shareholding of Adams in Griffin as at 30 September 2023 was, and
continues to be, 0.25 per cent of the Griffin 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 X (formerly Twitter), Reddit and Twitch. For the 6 months
ended 31 May 2023, Access Intelligence reported revenues of £31.3 million and
delivered a positive EBITDA of £2.0 million before exceptional costs
associated with the integration of Isentia Group which had been acquired in
September 2021. This reflected its first six-month period of Annual Recurring
Revenue ("ARR") growth in the APAC region since the acquisition of Isentia,
alongside continued ARR growth in the EMEA & NA market. The loss for the
period amounted to £5.1 million after exceptional costs and inclusive of
additional investment in sales and marketing to drive global expansion. Cash
balances at 31 May 2023 amounted to £2.7 million. As a result of the
restructuring actions taken over the last two years to optimise profitable
growth and free cash flow generation, the Access Intelligence Board
anticipates the delivery of higher EBITDA and cash generation in the second
half. The shareholding of Adams in Access Intelligence as at 30 September 2023
was, and continues to be, 0.52 per cent of the Access Intelligence voting
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. The
Oxehealth Service is used by 50% of English NHS mental health trusts as well
as acute hospitals, care homes, skilled nursing facilities, prisons and police
forces in the UK and Europe. At 30 September 2023, the investment holding by
Adams in Oxehealth represents 2.22 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, including cellular plans and cloud and data orchestration software.
These have empowered hundreds of millions of connected 'things' to date, and
are trusted by thousands of direct and indirect customers, globally. On 1
January 2023, the company completed a transaction with the global defence,
aerospace and security group, Thales, under which it acquired the cellular IoT
products business of Thales and thereby expanded Telit's presence in the
growing industrial IoT segments and end markets, including payment systems,
energy, e-health, and in the rapidly growing cybersecure IoT solutions market.
At 30 September 2023, the investment holding by Adams in Telit represents 0.35
per cent of Telit's issued share capital at that date.
In addition to the above investments, at 30 September 2023 Adams held three
other quoted holdings, together with one other private company holding. The
three quoted holdings comprise NCC Group Plc, which is FTSE All-Share
(https://www.londonstockexchange.com/indices/ftse-all-share) listed and a
leading independent provider of global cyber security and resilience services,
focusing on the fastest growing sectors, specifically those which are
highly-regulated and most exposed to cyber risk; WANdisco Plc, which is a
data activation company that enables organisations to move large datasets to
the cloud at massive scale in order to activate all their data for AI, machine
learning and analytics on modern cloud data platforms; and 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;. The private company holding comprises Source
Bioscience International Ltd, which is an international provider of
state-of-the art laboratory services, clinical diagnostics and analytical
testing services.
Outlook
World economies are currently facing many risks and geopolitical uncertainties
including the terrible current conflicts in Gaza and Ukraine, together with
ongoing trade tensions between the US and China. As a result, continued
volatility is expected in financial markets. In addition, whilst the global
economy proved more resilient than expected in the first half of 2023, the
overall growth outlook in the coming year remains weak and is weighed down by
still high inflation and interest rates which may remain higher for longer.
Growth forecasts for 2024 are generally strongest in emerging Asian economies,
and weakest in Europe and the US.
Difficult and volatile financial market conditions subsequent to our 30
September 2023 half year end have adversely impacted Adams's investment
portfolio and have generated unrealised investment losses which are estimated
to have now resulted in an overall loss of £0.15 million for the just under 8
months year to date.
In view of the above risks and uncertainties, your Board will 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
23 November 2023
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 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 2023
Year ended
6 months ended 31 Mar 2023 6 months ended
30 Sep 2023 30 Sep 2022
Note (Unaudited) (Audited) (Unaudited)
£'000 £'000 £'000
Gain/(loss) on investments 6 348 (2,188) (947)
Dividend income 39 - -
Investment return 387 (2,188) (947)
Expenses and other income
Administrative expenses (96) (182) (82)
Operating loss 291 (2,370) (1,029)
Interest income 1 - -
Profit/(loss) before taxation 292 (2,370) (1,029)
Taxation - - -
Profit/(loss)
for the period 292 (2,370) (1,029)
Basic and diluted gain/(loss) per share 11 0.20p (1.62)p (0.70)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 2023
As at As at As at
30 Sep 2023 31 Mar 2023 30 Sep 2022
(Unaudited) (Audited) (Unaudited)
Note £'000 £'000 £'000
Assets
Non-current assets
Investments 7 5,312 5,095 6,300
Current assets
Trade and other receivables 8 4 11 4
Cash and cash equivalents 115 47 163
Total current assets 119 58 167
Total assets 5,431 5,153 6,467
Liabilities
Current liabilities
Trade and other payables 9 (29) (43) (16)
Total liabilities (29) (43) (16)
Net current assets 90 15 151
Net assets 5,402 5,110 6,451
Equity
Called up share capital 10 1,459 1,459 1,459
Share premium 10 3,425 3,425 3,425
Accumulated gains 518 226 1,567
Total shareholder equity 5,402 5,110 6,451
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 23 November 2023 and signed on its behalf
by:
Michael Bretherton
Chairman
STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTH PERIOD TO 30 SEPTEMBER 2023
Share Share Premium Accumulated Gains Total
Capital
£'000 £'000 £'000
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
Total comprehensive loss for period - - (1,341) (1,341)
At 31 March 2023 (audited) 1,459 3,425 226 5,110
Total comprehensive gain for period - - 292 292
At 30 September 2023 (unaudited) 1,459 3,425 518 5,402
The notes form an integral part of the financial statements.
STATEMENT OF CASH FLOWS
FOR THE SIX MONTH PERIOD TO 30 SEPTEMBER 2023
Year
6 months ended 6 months
ended 31 Mar 2023 ended
30 Sep 2023 30 Sep 2022
(Unaudited) (Audited) (Unaudited)
£'000 £'000 £'000
Profit/(loss) for the period 292 (2,370) (1,029)
Unrealised (gain)/loss on revaluation of investments (342) 2,203 947
Realised gain on disposal of investments (6) (15) -
Decrease in trade and other receivables 7 1 8
(Decrease)/increase in trade and other payables (14) 18 (9)
Net cash outflows from operating activities (63) (163) (83)
Cash flows from investing activities
Purchase of investments (211) (1,216) (625)
Proceeds from sales of investments 342 555 -
Net cash inflows/(outflows) from investing activities 131 (661) (625)
Net increase/(decrease) in cash and cash equivalents 68 (824) (708)
Cash and cash equivalents at beginning of period 47 871 871
Cash and cash equivalents at end of period 115 47 163
The notes form an integral part of the financial statements.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTH PERIOD TO 30 SEPTEMBER 2023
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 2023. These include
unaudited comparatives for the six months ended 30 September 2022 together
with audited comparatives for the year ended 31 March 2023.
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 2024 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 2023.
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 2023 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.
6 Investment Return
The principal sources of revenue for the Company in the period to 30 September
2023 were as follows:
6 months ended 30 Sep 2023 Year ended 6 months ended 30 Sep 2022
31 Mar 2023
£'000 £'000 £'000
Unrealised gain/(loss) on investments 6 (2,203) (947)
Realised gains on investments 342 15 -
Total gain/(loss) on investments 348 (2,188) (947)
Dividend Income 39 - -
Investment return 387 (2,188) (947)
7 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 2022 4,693 1,920 9 6,622
Additions at cost 625 - - 625
Unrealised revaluation losses (938) - (9) (947)
Fair value at 30 September 2022 4,380 1,920 - 6,300
Additions at cost 591 - - 591
Disposals (540) - - (540)
Trasferred to unquoted equity (103) 103 - -
Unrealised revaluation losses (758) (523) 25 (1,256)
Fair value at 31 March 2023 3,570 1,500 25 5,095
Additions at cost 211 - - 211
Disposals (336) - - (336)
Unrealised revaluation gains 367 - (25) 342
Fair value at 30 September 2023 3,812 1,500 - 5,312
8 Trade and other receivables
As at As at As at
30 Sep 2023 31 Mar 2023 30 Sep 2022
£'000 £'000 £'000
Prepayments 4 11 4
4 11 4
The carrying amount of prepayments is approximate to their fair value.
9 Trade and other payables
As at As at As at
30 Sep 2023 31 Mar 2023 30 Sep 2022
£'000 £'000 £'000
Trade payables 11 8 7
Accruals and other creditors 18 35 9
29 43 16
The carrying amount of trade and other payables approximates to their fair
value.
10 Share capital
Ordinary shares of £0.01 Number of shares Share capital Share premium
£'000 £000
350,000,000 3,500
Authorised ordinary shares
At 30 September 2023 , March 2023 and 30 September 2022
145,859,231 1,459
Allotted, issued and fully paid ordinary shares
At 30 September 2023 , March 2023 and 30 September 2022
3,425
11 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 2023 30 Sep 2022
30 Sep 2023
Gain/(loss) after tax attributable to equity holders of the Company (£'000) 292 (2,370) (1,029)
Weighted average number of Ordinary Shares 145,859,213 145,859,231 145,859,231
Basic and diluted earnings/(loss) per share 0.20p (1.62)p (0.70)p
There were no potentially dilutive shares in issue as at 30 September 2023, 31
March 2023 or 30 September 2022.
12 Half year interim report
A copy of this half year interim report, as well as the annual statutory
accounts to 31 March 2023, are available on the Company's website at
www.adamsplc.co.uk (http://www.adamsplc.co.uk) .
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