TIDMSARS
RNS Number : 1517A
Sarossa PLC
25 September 2015
Sarossa Plc
Annual Report and Financial Statements 2015
25 September 2015
AUDITED RESULTS FOR THE YEAR ENDED 30 JUNE 2015
Sarossa Plc ("Sarossa" or the "Company) announces its audited
financial results for the year ended 30 June 2015.
Highlights:
- Net assets at 30 June 2015 of GBP18.31 million (2014: GBP17.22 million).
- Profit after tax of GBP2.69 million (2014: GBP3.69 million
inclusive of an exceptional income release of a legacy
biotechnology provision).
- Operating profit before exceptional items of GBP2.64 million (2014: GBP2.08 million).
- Portfolio investments at 30 June 2015 valued at GBP12.84
million represented by 4 AIM quoted holdings (2014: GBP10.62
million represented by 4 quoted holdings).
- Share buyback programme undertaken with 93.08 million shares
bought and cancelled at a cost of GBP1.60 million.
- Cash and deposits at 30 June 2015 of GBP5.51 million (2014: GBP6.13 million).
Michael Bretherton, Chairman, said:
"The Board remains committed to delivering additional value for
our shareholders and will continue to maintain a rigorous and
highly selective investment approach with a view to exploiting
opportunities as they emerge".
A letter will shortly be posted to shareholders advising that a
full copy of the Company's Annual Report 2015 is now available on
the Company's website at www.sarossaplc.com under the Investor
Centre/Financial Reports section and that this contains on page 34,
a Notice of the Annual General Meeting to be held at 11.00 a.m. on
26 November 2015 at the Company's registered office at 17 The
Esplanade, St Helier, Jersey, JE2 3QA.
Enquiries :
Sarossa Plc
Mike Bretherton, Chairman 01534719760
WH Ireland Limited (Nominated adviser)
Chris Fielding, Head of Corporate Finance 02072201650
Chairman's Statement
Sarossa Plc (Sarossa or the Company) delivered a strong
performance in the year ended 30 June 2015, with Group profits
after tax for the period of GBP2.69 million compared to a profit of
GBP2.09 million in the previous year (excluding an exceptional
release of a legacy biotechnology cost provision of GBP1.60 million
which increased the total prior year profit to GBP3.69 million).
The profit in the year includes unrealised revaluation gains of
GBP2.41 million (2014: unrealised gains of GBP1.08 million) on the
carrying values of Sarossa's investment portfolio holdings and
includes no further biotechnology income (2014: biotechnology
income of GBP0.59 million).
The results for the year also include the benefit of a partial
disposal of one of the Company's investments which generated cash
proceeds of GBP0.91 million and realised a gain of GBP0.40 million.
The balance of this investment, which was in a care sector support
services business, was sold post the end of the year and increased
the total cash generated on disposal of this investment to GBP1.77
million.
As a mechanism for enhancing capital efficiency, the Company
used part of its investment disposal proceeds towards undertaking
the buy-back and cancellation of 93.08 million of its own shares at
a cost of GBP1.60 million, representing an average buy-back price
of 1.72p per share.
During the year, the Company spent GBP0.32 million on the
purchase of additional shares in an existing portfolio investment.
The Company holds currently 4 portfolio investments, all of which
are quoted on AIM, and for which the carrying value at 30 June 2015
was GBP12.84 million (30 June 2014: GBP10.62 million represented by
4 quoted holdings).
Subsequent to the year end, the Company entered into an
agreement to subscribe for up to GBP2.0 million of new ordinary
shares potentially issuable by GVC Holdings Plc ("GVC") in which
Sarossa has an existing investment, in connection with its
recommended bid offer for bwin.party digital entertainment plc
("bwin.party"). The subscription will only proceed if GVC is able
to complete the bwin.party transaction, which it hopes will become
effective in late Q4 2015 or in early 2016.
Net assets attributable to holders of Sarossa at 30 June 2015
were GBP18.31 million (equivalent to 3.35p per share) compared with
GBP17.22 million (equivalent to 2.69p per share) at the previous
year end. The increase in net assets per share reflects both the
profit performance in the year and the lower share capital base as
reduced by the share buy-backs and cancellations.
The Group continues to benefit from a strong balance sheet with
cash and short term deposit balances of GBP5.52 million at 30 June
2015 compared to cash and short term deposit balances of GBP6.13
million at 30 June 2014.
Sarossa is an investment holding and management company whose
principal activity is investment in and growth and development of
businesses which present opportunities for value creation. The
Company is mainly focused on portfolio businesses with product and
service platforms targeting major international markets through
customers and partners with an international profile.
Investment portfolio update
An overview of the activities of the portfolio businesses in
which Sarossa has a holding of over 3 per cent. is given below:
Silence Therapeutics Plc ('Silence'), which is AIM listed, is a
global leader in the discovery, development and delivery of novel
RNAi therapeutics for the treatment of serious diseases. The core
technology of Silence is its proprietary form of a short
interfering RNA molecule, known as AtuRNAi, which enables the
development of novel molecular entities that "silence" or
inactivate the genes expressed in some diseases. As well as the
ability to switch genes off using its modified siRNA and delivery
systems, the company has added the ability to switch genes on by
using the same delivery systems with a messenger RNA. The discovery
of the significance of RNA activity in cell protein production is
one of the most important medical breakthroughs in recent years.
Silence Therapeutics has developed its own RNA technology, along
with proprietary delivery systems. Combined, these enable the
development of therapeutics for diseases with high unmet medical
needs. Atu027 is the company's leading Oncology product and the
company achieved a further key milestone during 2105 when it
announced highly encouraging data in its phase 2a pancreas cancer
trial. Silence now expects to begin recruitment for a Phase 1b
combination study for Atu027 in head and neck cancer. Additionally,
initial pre-clinical results have been encouraging in pulmonary
arterial hypertension and the potential shown by the Company's
newest delivery formulation, MacPLEX, is exciting, targeting liver
macrophages which are key immune cells. The Company continues to
review its plans for Atu111 which targets acute lung injury.
Silence is working on several further projects and collaborations
which are at earlier stages. It currently has collaborations in
place with world-leading academic institutions, including the
University of Oxford, the University of Cambridge and Imperial
College London. The company has a robust IP estate protecting its
proprietary technology and also has a strong balance sheet with net
cash and deposits at 31 March 2015 of GBP19.2m. Silence further
strengthened its balance sheet in May 2015 with an additional share
issue fundraise of GBP40.0 million. Sarossa's shareholding at 30
June 2015 was, and continues to be, 4.21 per cent. of the issued
share capital of Silence.
Plant Health Care Plc ('PHC') which is AIM listed, is a leading
provider of novel patent protected biological products to the
global agriculture markets. The company has a portfolio of
established products based on its proprietary Harpin and
Myconate(R) technologies. PHC's products increase crop yields by
enhancing natural processes within the plant. Revenues in the year
to December 2014 were US$ 6.9 million and during the first half of
2015, sales grew by 7.1% in constant currency terms. Accelerating
revenues of existing products will be driven through existing
partnership and distribution agreements, including with Arysta
LifeScience, SymAgro and Dux Agri, as well as by concluding new
agreements with strong partners who can develop sales in-market.
PHC is also focused on the discovery and development of new
patent-protected products and in late 2014 the company released a
platform of peptide products as Innatus 3G. These show great
potential in delivering yield improvements and invoking disease and
pest resistance in crop plants. During the first half of 2015, PHC
announced the first 2 evaluation agreements for Innatus with major
industry players which envisage completion of evaluation at the end
of 2016, with a competitive licensing process for rights to develop
Innatus based products from 2017 onwards. Progress on evaluation
agreements with major industry players is an important validation
of the technology and is a key driver of long-term value for PHC
shareholders. PHC continues to maintain a sound balance sheet and
at 30 June 2015 had no debt and US$12.6 million in cash and
investments. Sarossa's holding in PHC at 30 June 2015 was, and
continues to be, 5.35 per cent.
In addition to the above, Sarossa has holdings of below 3 per
cent. in two profitable AIM listed companies, one of which operates
in the online gaming and sports betting markets and the other is a
care sector support services business. Both of these companies have
solid dividend yield and favourable growth records.
Outlook
The potential for volatility in capital markets remains, given
the continued worries over persistent geopolitical risks in Ukraine
and the Middle East and the need for further structural reforms to
restore European public finances to a sustainable path, as well as
an outlook for slowing global growth.
(MORE TO FOLLOW) Dow Jones Newswires
September 25, 2015 02:00 ET (06:00 GMT)
We remain committed, however, to delivering additional value for
our shareholders and will continue to maintain a rigorous and
highly selective investment approach with a view to exploiting
opportunities as they emerge. We will also retain the management
disciplines and shareholder alignment under which Sarossa now
operates, whilst running a low cost base. We are confident that
this approach will enable us to build considerable value for
shareholders going forward.
Michael Bretherton
Chairman
25 September 2015
Consolidated Statement of Comprehensive Income for the year
ended 30 June 2015
2015 2014
GBP'000 GBP'000
-------- --------
Gain on portfolio investments 3,008 1,816
Other income - 594
----------------------------------------------------- -------- --------
Portfolio return and revenue 3,008 2,410
Research and development legacy credit - 6
Release of legacy biotechnology provision - 1,603
Administrative expenses (371) (333)
----------------------------------------------------- -------- --------
Operating profit 2,637 3,686
----------------------------------------------------- -------- --------
Analysed as:
Operating profit before exceptional items 2,637 2,083
Exceptional items - 1,603
----------------------------------------------------- -------- --------
Operating profit 2,637 3,686
Finance income 50 47
Finance expense - (43)
----------------------------------------------------- -------- --------
Profit before taxation 2,687 3,690
Taxation - -
-------- --------
Profit for the year and total comprehensive income 2,687 3,690
----------------------------------------------------- -------- --------
Earnings per ordinary share
---------------------------------------------------- -------- --------
Basic and diluted 0.43p 0.58p
----------------------------------------------------- -------- --------
There are no other items of other comprehensive income.
Consolidated Statement of Changes in Equity as at 30 June
2015
Capital Retained
Share Share Redemption Earnings
Capital Premium Reserve Merger Reserve Other Reserve Deficit Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------------- --------- ---------- -------------- --------------- -------------- -------------- --------
At July 2013 10,725 122,091 - - 8,282 (127,564) 13,534
Total
comprehensive
income for the
year - - - - - 3,690 3,690
Group
re-organisation (4,331) (122,091) - 126,422 (8,282) 8,282 -
------------------ --------- ---------- -------------- --------------- -------------- -------------- --------
At 30 June 2014 6,394 - - 126,422 - (115,592) 17,224
------------------ --------- ---------- -------------- --------------- -------------- -------------- --------
Total
comprehensive
income for the
year - - - - - 2,687 2,687
Purchase of
shares for
cancellation (931) - 931 - - (1,603) (1,603)
------------------ --------- ---------- -------------- --------------- -------------- -------------- --------
At 30 June 2015 5,463 - 931 126,422 - (114,508) 18,308
------------------ --------- ---------- -------------- --------------- -------------- -------------- --------
Consolidated Statement of Financial Position at 30 June 2015
2015 2014
GBP'000 GBP'000
----------------------------- ---------- ----------
ASSETS
Non-current assets
Portfolio Investments 12,836 10,624
---------- ----------
12,836 10,624
----------------------------- ---------- ----------
Current assets
Trade and other receivables 29 594
Short-term deposits - 2,603
Cash and cash equivalents 5,515 3,530
5,544 6,727
----------------------------- ---------- ----------
Total assets 18,380 17,351
------------------------------ ---------- ----------
LIABILITIES
Current liabilities
Trade and other payables (72) (127)
------------------------------ ---------- ----------
Total liabilities (72) (127)
---------- ----------
Net current assets 5,472 6,600
------------------------------ ---------- ----------
Net assets 18,308 17,224
------------------------------ ---------- ----------
Shareholders' equity
Share capital 5,463 6,394
Capital redemption reserve 931 -
Merger reserve 126,422 126,422
Retained earnings deficit (114,508) (115,592)
---------- ----------
Total shareholders' equity 18,308 17,224
------------------------------ ---------- ----------
Consolidated Statement of Cash Flows for the year ended 30 June
2015
2015 2014
GBP'000 GBP'000
-------- --------
Cash flows from operating activities
Profit before tax 2,687 3,690
Adjustments for:
Foreign exchange gains (25) (48)
Release of legacy biotechnology provision - (1,603)
Finance income (25) (47)
Realised gain on sale of portfolio investments (397) -
Unrealised gain on revaluation of portfolio investments (2,406) (1,763)
------------------------------------------------------------------------- -------- --------
Operating cash (outflows) / inflows before movement in working capital (166) 229
Purchase of portfolio investments (316) (1,085)
Proceeds from sale of investments 907 -
Decrease in trade and other receivables 565 87
(Decrease) / increase in trade and other payables (55) 31
------------------------------------------------------------------------- -------- --------
Cash generated / (used) in operations 935 (738)
Interest received 25 47
------------------------------------------------------------------------- -------- --------
Net cash generated / (used) in operating activities 960 (691)
------------------------------------------------------------------------- -------- --------
Cash flows from investing activities
Reduction / (increase) of short-term deposits with banks 2,603 (1,103)
------------------------------------------------------------------------- -------- --------
Net cash generated / (used) from investing activities 2,603 (1,103)
------------------------------------------------------------------------- -------- --------
Cash flows from financing activities
------------------------------------------------------------------------ -------- --------
Purchase of own shares for cancellation (1,603) -
------------------------------------------------------------------------ -------- --------
Net cash (used) from financing activities (1,603) -
------------------------------------------------------------------------ -------- --------
Net increase / (decrease) in cash and cash equivalents 1,960 (1,794)
Exchange gains/(losses) on cash balances 25 (43)
Cash, cash equivalents at beginning of year 3,530 5,367
------------------------------------------------------------------------- -------- --------
(MORE TO FOLLOW) Dow Jones Newswires
September 25, 2015 02:00 ET (06:00 GMT)
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