REG - Adams PLC - Final Results
27/06/2024 07:00
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RNS Number : 0488U Adams PLC 27 June 2024
27 June 2024
Adams Plc
("Adams" or the "Company")
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2024
Adams Plc presents its annual report and audited financial results for the
year ended 31 March 2024
Highlights:
- Net assets at 31 March 2024 of £4.98 million (2023: £5.11
million).
- Net assets per share 3.42 pence at 31 March 2024 based on 145.9
million shares in issue (2023: 3.50 pence).
- Loss after tax of £0.13 million (2023: loss £2.37 million).
- Investments at 31 March 2023 valued at £4.93 million (2023:
£5.10 million).
- Spend on new investments of £0.21 million (2023: £1.22
million).
- Proceeds from investment realisations £0.39 million (2023:
£0.56 million).
- Cash at 31 March 2024 of £0.09 million (2023: £0.05 million).
- No part of the £3.00 million shareholder loan facility drawn
down to date.
Michael Bretherton, Chairman, said:
"Elevated trade tensions with China, the ongoing Russia-Ukraine war and
conflicts in the Middle East all point to continued uncertainties and risks
going forward. In addition, many governments continue to face mounting
fiscal challenges from rising debt service costs and sizeable additional
spending pressures from ageing populations, climate change mitigation and
increased defence spending in the face of growing geopolitical discord.
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."
The Company's 2024 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
(http://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 13 September 2024 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
(tel:0207%20469%200930)
Chairman's Statement
Adams generated a net loss of £0.13 million for the year ended 31 March 2024
compared to a loss of £2.37 million in the previous year ended 31 March 2023.
That loss for the year of £0.13 million comprises a net investment profit
return of £0.07 million, less administrative costs of £0.20 million. The
comparative 2023 year loss of £2.37 million included a net investment loss of
£2.19 million, together with administrative costs of £0.18 million.
During the year, the Company spent £0.21 million on a new quoted equity
investment in NCC Group Plc and realised disposal proceeds of £0.39 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 and Niox Group
Plc investment holdings.
The carrying value of the Company's equity investments at 31 March 2024 was
£4.93 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 £0.09 million as at 31 March 2024, compared
to cash balances of £0.05 million at the previous 31 March 2023 year end.
Net assets decreased to £4.98 million (equivalent to 3.42p per share) at the
31 March 2024 balance sheet date, compared with £5.11 million (equivalent to
3.50p per share) at 31 March 2023. The £0.13 million reduction 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 2024 (each
representing at least 5% of the net asset value of the Company at that date)
comprised Niox Group Plc ("Niox"), Seeing Machines Limited ("Seeing
Machines"), Griffin Mining Limited ("Griffin"), Pulsar Group Plc (formerly
called Access Intelligence) ("Pulsar"), NCC Group Plc ("NCC") and C4X
Discovery Holdings Plc ("C4XD"). C4XD subsequently delisted from AIM on 25
April 2024 and is now held by Adams as a principal unquoted investment. 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. Niox is a debt-free business with a strong
NIOX® asthma management products-based business. The company is continuing
its growth as a distributor-led business implementing access to a large and
underserved population of patients suffering from asthma. All three of its key
geographic areas of Asia Pacific, EU and USA generated profitable growth in
the 2023 year. Niox is also making good progress in expanding sales into the
UK primary care sector and where the NHS is supporting the use of FeNO testing
using NIOX devices. For the year ended 31 December 2023, NIOX sales increased
18% to £36.8 million and generated an EBITDA profit of £11.4 million. The
company had net cash balances of £19.9 million at the year-end, reflecting
£11.6 million of operating cash flow generation in the year, plus a further
$3.5 million received from Beyond Air under the settlement agreement
following FDA approval for its LungFit PH device, partially offset by a
special dividend of £10.5 million paid to shareholders in September 2023.
During 2024, management's focus will be on growing revenues in the USA,
expanding into new healthcare professional channels and developing a product
for home-use. The shareholding of Adams at 31 March 2024 was, and continues to
be, 0.35 per cent. of the Niox 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
11 automotive Tier 1 global customers covering 17 automotive driver monitoring
safety ("DMS") programmes with a combined initial lifetime value of $366
million and with the majority of that revenue expected by 2028. At 31 December
2023, Seeing Machines' technology was installed in over 1.5 million vehicles
globally representing an increase of 116% over the previous 12 months. Seeing
Machines is also undertaking a programme with Collins Aerospace to jointly
develop pioneering eye-tracking solutions for the Aviation industry. Seeing
Machines reported underlying revenue growth of 28% during the half year to 31
December 2023 (excluding one-off licence payments from Magna International in
the prior period as part of its investment and exclusivity collaboration
agreement signed in October 2022), to give 6-month revenues of $25.7 million
and a loss for the period of $19.8 million. Seeing Machines' cash balances at
31 December 2023 amounted to $22.2 million. The shareholding of Adams in
Seeing Machines as at 31 March 2024 was, and continues to be, 0.31 per cent.
of the Seeing Machines 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. In January 2021,
Griffin announced a major achievement in finally securing a significant new
Zone II mining license from the Chinese Ministry of Land and Natural Resources
which elevates Griffin to being one of the largest zinc producers in China.
The year to 31 December 2023 witnessed overwhelmingly positive performance and
generated record revenues of US$146.0 million (up by 54.7%) and with profits
after tax of US$15.2 million (up by 97.8%). Cash balances amounted to US$60.0
million at the 31 December 2023 year end. The results benefited from record
amounts of ore mined and processed, together with lower smelter treatment
charges and increased gold prices. These results do not yet include any ore
being delivered from the new Zone II mining licence, which mine remains under
full speed development and construction and ore extraction from this is on
schedule for the Q1 of 2025. Given the severely undervalued nature of the
company's share price, the Griffin directors announced a share buy-back
programme which was commenced in September 2023 but mainly took place in Q1 of
2024 and on 15 March 2024 a total of 10.3 million shares purchased under that
programme were cancelled. The shareholding of Adams in Griffin as at 31 March
2024 was, and continues to be, 0.26 per cent. of the Griffin shares in issue.
Pulsar 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 year ended 30 November 2023,
Pulsar reported revenues of £62.4 million (with annual recurring revenue
"ARR" comprising 95% of the total) and delivered an EBITDA loss of £2.8
million and a loss after tax of £7.9 million. The results include a further
£9.0 million of non-recurring restructuring costs associated with the
integration of Isentia Group which had been acquired in September 2021. The
results also reflect the challenges of a difficult macro-economic environment
during which Pulsar has focused its efforts on refining the group's operating
model and next generation AIsolutions platform to improve EBITDA margins and
free cash flow generation, alongside continued ARR growth in the EMEA, APAC
& North American market to drive global expansion. ARR growth is reported
to have accelerated in all 3 regions during the first four months of
2024. Cash balances at 30 November 2023 amounted to £2.2 million. Since
that period end, Pulsar has put in place a £3 million debt facility and
a £3 million overdraft facility and at 31 March 2024, Pulsar's net debt
position was £1.25 million. The shareholding of Adams in Pulsar as at 31
March 2024 was, and continues to be, 0.52 per cent. of the Pulsar voting
shares in issue.
NCC is an FTSE All-Shar
(https://www.londonstockexchange.com/indices/ftse-all-share) e listed global
tech-enabled cyber and software resilience business operating across multiple
sectors, geographies and technologies. The company advises global technology,
manufacturers, financial institutions, critical national infrastructure
providers, retailers and governments on the best way to keep businesses,
software and personal data safe and provides solutions to manage all manner of
cyber threats. The last 12 months has seen the company transitioning from a
business operating internationally to becoming a truly global organisation and
which has included the recent opening of its new office in Manila, the
Philippines, alongside the creation of further universal processes within its
technology platform. For the 6-month half year ended 30 November 2023, NCC
generated revenues of £159.2 million and an adjusted EBITDA profit of £15.6
million. Looking ahead, A recent trading update by the company has reported
that revenues for the 12 months to 31 May 2024 are expected to be £324.0
million. NCC is well placed for sustainable long-term growth as cyber security
is now an essential component of digital risk management across an
increasingly connected society. The shareholding of Adams in NCC as at 31
March 2024 was, and continues to be, 0.06 per cent. of the NCC shares in
issue.
C4XD is a private 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 ("AZ") 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.
During the period, Indivior UK Limited agreed to acquire for £15.95 million
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. In addition, C4XD has continued to drive other key
programmes towards partnering with a near term focus on inflammatory and
oncology diseases. C4XD reported a profit after tax of £17.8 million in the
six months ending 31 January 2024 inclusive of the £15.95 million sale to
Indivior and an £8.7 million ($11.0 million) milestone due from AZ and with
R&D investment costs of £5.2 million. Cash balances at 31 January 2024
amounted to £13.1 million before post period end receipt of the £8.7 million
milestone from AZ in February 2024. C4XD subsequently delisted from the AIM
market on 25 April 2024 following a board evaluation which concluded that the
ability to achieve company's strategic aim and growth prospects will be best
accomplished as a private company where it can also potentially access a
larger quantum of future development funding. The shareholding of Adams in
C4XD at 31 March 2024 was, and continues to be, 1.98 per cent. of the C4XD
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 in the UK, Sweden and more recently also the USA. This is achieved
through the deployment of its Oxevision platform which provides customer staff
with a wider range of contact-free location and activity-based alerts, reports
and vital signs measurements than any other technology, plus the ability to
check the patient visually if needed to support on-the-spot decision making.
This enables customers to create proactive, data-enabled systems of care that
help deliver year on year continuous improvement in safety, quality and
efficiency. In May 2024, Oxehealth was also granted FDA and EU regulatory
clearances for new mental health sleep monitoring software which represents a
major milestone in its ongoing mission to transform inpatient mental health
care. In the US, intelligent innovative platforms to support behavioural
health are far behind other specialties and Oxehealth is now poised for
expansion into that market. In February 2024, Oxehealth welcomed US based Todd
Haedrich as Chief Executive Officer. Todd comes with an extensive background
in software and healthcare technology, having successfully built and led
companies across the US, Europe, and Asia-Pacific. Later that month, Oxehealth
announced its first US partnership, with SummitStone Health Partners, the
largest not-for-profit behavioural health services provider in Larimer County,
Colorado, where the Oxevision contactless, intelligent patient monitoring
platform has been successfully implemented at the Longview Campus Acute Care
facility in Fort Collins. At 31 March 2024, the investment holding by Adams in
Oxehealth represents 2.22 per cent. of Oxehealth's issued share capital at
that date but this has subsequently been diluted to 2.07 per cent. as Adams
did not participate in an Oxehealth new share issue funding round undertaken
in May 2024.
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. These IoT
devices include industrial handhelds, utility meters, industrial and
agricultural environmental sensors, health monitors, industrial robots, CNC
machines, cameras and many more factory floor devices, as well as wearables
and precision mobile trackers. Telit's plug-and-play solutions connect
industrial IoT applications with minimal integration effort and its gateways
provide host devices with convenient access to the internet via cellular
connectivity as well as using IoT Wi-Fi and Bluetooth technology as
appropriate for certain market segments, including connected home, wearables,
automobiles and smart buildings. Telit's IoT platforms also enable AI and
machine learning to be incorporated into customer applications, including
visual inspection and object recognition. 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
has also enhanced the company's capabilities in the rapidly growing
cybersecure IoT solutions market and in particular for critical industries and
infrastructure. At 31 March 2024, 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 2024 Adams held two other
quoted holdings, together with one other private company holding. The two
quoted holdings comprise Cirata 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
Headline inflation fell rapidly in most economies during 2023, driven down by
restrictive monetary policy settings, lower energy prices and continued easing
of supply chain pressures. There are signs that the global economic outlook
has started to brighten although growth is expected to remain modest during
2024 amid high levels of government debt and with interest rate cuts expected
to be incremental and moderate as major central banks balance the final mile
of getting inflation back to target rates.
Elevated trade tensions with China, the ongoing Russia-Ukraine war and
conflicts in the Middle East all point to continued uncertainties and risks
going forward. In addition, many governments continue to face mounting
fiscal challenges from rising debt service costs and sizeable additional
spending pressures from ageing populations, climate change mitigation and
increased defence spending in the face of growing geopolitical discord.
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
27 June 2024
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 2024
Year ended
31 March 2024 Year ended
31 March 2023
£'000 £'000
Dividend income 49 -
Profit/(loss) on investments 18 (2,188)
Investment return/(loss) 67 (2,188)
Expenses and other income
Administrative expenses (195) (182)
Operating loss (128) (2,370)
Interest income 1 -
Loss on ordinary activities before taxation (127) (2,370)
Tax on loss on ordinary activities - -
Loss for the year (127) (2,370)
Basic and diluted loss per share (0.09)p (1.62)p
Statement of Financial Position at 31 March 2024
31 March 2024
31 March
2023
£'000 £'000
Assets
Non-current assets
Investments 4,934 5,095
Current assets
Trade and other receivables 12 11
Cash and cash equivalents 87 47
Current assets 99 58
Total assets 5,033 5,153
Liabilities
Current liabilities
Trade and other payables (50) (43)
Total liabilities (50) (43)
Net current assets 49 15
Net assets 4,983 5,110
Equity
Share capital 1,459 1,459
Share premium 3,425 3,425
Retained earnings reserve 99 226
Total shareholder equity 4,983 5,110
Statement of Changes in Equity as at 31 March 2024
Share Capital Share premium Retained earnings reserve Total
£'000 £'000 £'000 £'000
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
Changes in equity
Total comprehensive loss - - (127) (127)
At 31 March 2024 1,459 3,425 99 4,983
Statement of Cash Flows for the year ended 31 March 2024
Year ended Year ended
31 March 2024 31 March 2023
*Restated
£'000 £'000
Loss for the year (127) (2,370)
Unrealised loss on revaluation of portfolio investments 1 2,203
Realised gain on disposal of portfolio investments (19) (15)
(Increase)/decrease in trade and other receivables (1) 1
Increase in trade and other payables 7 18
Net cash outflow from operating activities (139) (163)
Cash flows from investing activities
Purchase of portfolio investments (211) (1,216)
Proceeds from sales of investments 390 555
Net cash generated/(used) in investing activities 179 (661)
Net increase/(decrease) in cash and cash equivalents 40 (824)
Cash and cash equivalents at beginning of year 47 871
Cash and cash equivalents at end of year 87 47
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.
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