TIDMADA
RNS Number : 9954F
Adams PLC
14 July 2023
14 July 2023
Adams Plc
("Adams" or the "Company")
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEARED 31 MARCH
2023
Adams Plc presents its annual report and audited financial
results for the year ended 31 March 2023
Highlights:
- Net assets at 31 March 2023 of GBP5.11 million (2022: GBP7.48 million).
- Net assets per share 3.50 pence at 31 March 2023 based on
145.9 million shares in issue (2022: 5.13 pence).
- Loss after tax of GBP2.37 million (2022: loss GBP1.73 million).
- Investments at 31 March 2023 valued at GBP5.10 million (2022: GBP6.62 million).
- Spend on new investments of GBP1.22 million (2022: GBP3.09 million).
- Proceeds from investment realisations GBP0.56 million (2022: GBPnil).
- Cash at 31 March 2023 of GBP0.05 million (2022: GBP0.87million).
- No part of the GBP3.00 million shareholder loan facility drawn down to date.
Michael Bretherton, Chairman, said:
"The global economy is still being impacted by the adverse
effects of Russia's invasion of Ukraine and rising inflation,
coupled with governments heavily indebted by the financial support
measures provided during the period of Covid restrictions. As a
result, financial conditions and monetary policy are likely to
continue to tighten and with growth expected to remain weak by
historical standards.
"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 ."
The Company's 2023 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 11.30 a.m. on Friday 18 August 2023 at the Company's
registered office at 55 Athol Street, Douglas, Isle of Man, IM1
1LA.
This announcement contains inside information as defined in
Article 7 of the Market Abuse Regulation No. 596/2014 ("MAR") as
retained as part of UK law by virtue of the European Union
(Withdrawal) Act 2018 as amended.
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, Martin
Lampshire Tel: +44 207 469 0930
Chairman's Statement
Results
Adams incurred a net loss of GBP2.37 million for the year to 31
March 2023 (FY2023) compared to a loss of GBP1.73 million in the
previous year ended 31 March 2022 (FY2022).
This FY2023 loss comprises a net investment loss of GBP2.19
million, together with overhead costs of GBP0.18 million. The
previous FY2022 loss comprised a net investment loss of GBP1.57
million, together with administrative costs of GBP0.16 million.
During FY2023, the Company spent GBP1.22 million on three equity
investments, two of which were new investments comprising Tremor
International Ltd and WANdisco Plc and the other being a follow-on
investment in Seeing Machines Limited. Disposal proceeds during the
period amounted to GBP0.56 million on a partial realisation of the
Niox Group Plc investment holding. In addition, the Company's small
GBP0.10 million investment in 4D Pharma Plc had to be written off
when it went into administration on 24 June 2022.
The carrying value of the Company's equity investments at 31
March 2023 was GBP5.10 million represented by nine quoted
investment holdings and three private investments (31 March 2022:
GBP6.62 million represented by nine quoted investment holdings and
two 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 investment in WANdisco was made in December 2022 following
that company's reporting of very significant new orders received
during the previous 2 months. Subsequently on 9 March 2023,
WANdisco announced it had requested a suspension of its shares from
trading on AIM while a legal investigation is carried out on
irregularities discovered on purchase orders and related revenue
bookings, which gave rise to a material misstatement of its
financial position. The WANdisco shares remained suspended at 31
March 2023 and are not due to recommence trading on AIM until
around 25 July 2023 when a recently announced share offer equity
fundraise to raise gross proceeds of US$ 30 million at a price of
50 pence per share is due to complete. The offer shares will
represent approximately 70.7% of WANdisco's existing issued share
capital. This investment holding is, therefore, being carried by
Adams at a 50 pence per share value at the 31 March 2023 year end,
being the best indication of fair value at that date.
The Company held cash balances of GBP0.05 million as at 31 March
2023, compared to cash balances of GBP0.87 million at the previous
31 March 2022 year end.
Net assets reduced to GBP5.11 million (equivalent to 3.50p per
share) at the 31 March 2023 balance sheet date, compared with
GBP7.48 million (equivalent to 5.13p per share) at 31 March 2022.
The GBP2.37 million decrease in net assets reflects the 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
2023 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 Cinteron Ltd ("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(R) 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
year ended 31 December 2022, sales increased 15% to GBP31.3 million
and generated an EBITDA profit of GBP7.3 million. The profit after
tax for the period amounted to GBP16.1 million inclusive of an
GBP8.1 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 GBP2.1 million on
discontinued operations. The company had net cash balances of
GBP19.4 million at 31 December 2022. The shareholding of Adams at
31 March 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
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 EUR414 million plus potential for single -- digit royalties. In
November 2022, C4XD signed an exclusive licensing agreement with
AstraZeneca for its NRF2 activator programme addressing the
treatment of inflammatory and respiratory diseases. The 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 GBP3.9 million in the six months ending 31 January
2023 inclusive of R&D investment of GBP5.2 million and with
revenues of GBP1.7 million. Cash balances at 31 January 2023
amounted to GBP9.6 million . The shareholding of Adams in C4XD at
31 March 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 ten automotive Tier 1 global customers
covering 15 automotive driver monitoring safety ("DMS") programmes.
In October 2022, the company entered into an exclusive
collaboration with Magna International, to pursue driver and
occupant monitoring system business targeting the vehicle's
interior rear-view mirror and under which Magna also provided
additional investment through a Convertible Note of up to US$47.5m
which matures in October 2026 and has a conversion rate per
ordinary share of 11 pence. At 31 December 2022, there were 710,049
vehicles on the road featuring Seeing Machines' DMS technology, an
increase of 188% over the 12 month period. In the half year to 31
December 2022, Seeing Machines reported underlying revenue growth
of 54% per cent, to give revenues of $24.4 million and a loss for
the period of $5.4 million. Seeing Machines' cash balances at 31
December 2022 amounted to $52.2 million inclusive of $28.8 million
received on partial draw down of the Magna Convertible Loan Note.
The shareholding of Adams in Seeing Machines as at 31 March 2023
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 year
ended 30 November 2022, Access Intelligence reported revenues of
GBP65.7 million and delivered a positive EBITDA of GBP2.3 million
before exceptional costs associated with the integration of Isentia
Group which had been acquired in September 2021. The loss for the
year amounted to GBP4.2 million after exceptional costs and
inclusive of additional investment in sales and marketing to drive
global expansion. Cash balances at 30 November 2022 amounted to
GBP4.9 million . 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 31 March 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. Adams has
participated in the Oxehealth new share issue funding rounds
undertaken in the previous few years but did not participate in the
last one undertaken in the March quarter of 2023 and as a result
has seen some dilution of its shareholding in this investment. At
31 March 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,
empowering hundreds of millions of connected 'things' to date, and
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
security. It will also enhance the company's capabilities in the
rapidly growing cybersecure IoT solutions market. At 31 March 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 31 March 2023 Adams
held five other quoted holdings, together with one other private
company holding. The five quoted holdings comprise 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; 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; 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. 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
The global economy is still being impacted by the adverse
effects of Russia's invasion of Ukraine and rising inflation,
coupled with governments heavily indebted by the financial support
measures provided during the period of Covid restrictions. As a
result, financial conditions and monetary policy are likely to
continue to tighten and with growth expected to remain weak by
historical standards.
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
14 July 2023
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
2023
Year ended Year ended
31 March 2023 31 March 2022
GBP'000 GBP'000
--------------------------------------------- --------------- ----------------
Investment loss return (2,188) (1,571)
Expenses and other income
Administrative expenses (182) (160)
Operating loss (2,370) (1,731)
Interest income - -
--------------------------------------------- --------------- ----------------
Loss on ordinary activities before taxation (2,370) (1,731)
Tax on loss on ordinary activities - -
--------------------------------------------- --------------- ----------------
Loss for the year (2,370) (1,731)
---------------------------------------------- --------------- ----------------
Basic and diluted loss per share (1.62)p (1.21)p
---------------------------------------------- --------------- ----------------
Statement of Financial Position at 31 March 2023
31 March 31 March
2023 2022
GBP'000 GBP'000
----------------------------- --------- -----------
Assets
Non-current assets
Investments 5,095 6,622
------------------------------ --------- -----------
Current assets
Trade and other receivables 11 12
Cash and cash equivalents 47 871
------------------------------ --------- -----------
Current assets 58 883
------------------------------ --------- -----------
Total assets 5,153 7,505
------------------------------ --------- -----------
Liabilities
Current liabilities
Trade and other payables (43) (25)
------------------------------ --------- -----------
Total liabilities (43) (25)
------------------------------ --------- -----------
Net current assets 15 858
------------------------------ --------- -----------
Net assets 5,110 7,480
------------------------------ --------- -----------
Equity
Share capital 1,459 1,459
Share premium 3,425 3,425
Retained earnings reserve 226 2,596
------------------------------ --------- -----------
Total shareholder equity 5,110 7,480
------------------------------ --------- -----------
Statement of Changes in Equity as at 31 March 2023
Share Capital Share premium Retained earnings reserve Total
GBP'000 GBP'000 GBP'000 GBP'000
At 31 March 2021 826 - 4,327 5,153
Changes in equity
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
--------------------------- -------------- -------------- -------------------------- --------
Changes in equity
Total comprehensive loss - - (2,370) (2,370)
--------------------------- -------------- -------------- -------------------------- --------
At 31 March 2023 1,459 3,425 226 5,110
--------------------------- -------------- -------------- -------------------------- --------
Statement of Cash Flows for the year ended 31 March 2023
Year ended Year ended
31 March
2022
31 March
2023 *Restated
GBP'000 GBP'000
Loss for the year (2,370) (1,731)
Unrealised loss on revaluation of
portfolio investments 2,203 1,571
Realised gain on disposal of portfolio
investments (15) -
Decrease in trade and other receivables 1 10
Increase in trade and other payables 18 2
--------------------------------------------- ----------- ------------
Net cash outflow from operating activities (163) (148)
--------------------------------------------- ----------- ------------
Cash flows from investing activities
Purchase of portfolio investments (1,216) (3,088)
Proceeds from sales of investments 555 -
-------------------------------------------- ----------- ------------
Net cash used in investing activities (661) (3,088)
--------------------------------------------- ----------- ------------
Cash flows from financing activities
Issue of new ordinary shares - 4,058
Net cash generated from financing
activities - 4,058
--------------------------------------------- ----------- ------------
Net (decrease) / increase in cash
and cash equivalents (824) 822
Cash and cash equivalents at beginning
of year 871 49
--------------------------------------------- ----------- ------------
Cash and cash equivalents at end
of year 47 871
--------------------------------------------- ----------- ------------
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.
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