TIDMADA

RNS Number : 9106U

Adams PLC

28 November 2019

Adams plc

("Adams" or the "Company")

Interim Results for the Six Months ended 30 September 2019

Adams Plc ("Adams" or the "Company") experienced a challenging six months to 30 September 2019 in terms of the performance of its investment portfolio and as a result the Company incurred a loss after tax of GBP46,000 during that period versus a profit after tax of GBP517,000 earned in the six months ended 30 September 2018. The reduction in profitability is principally due to lower investment returns of only GBP23,000 compared to GBP598,000 in the previous September 2018 half year.

During the six months ended 30 September 2019, the Company spent GBP559,000 on 3 new equity investments and generated cash proceeds of GBP579,000 from the realisation of its investment in Midatech Pharma Plc. Adams held 6 investments at 30 September 2019, of which 5 were listed and 1 was un-listed, and for which the total investment carrying value was GBP2.02 million (31 March 2019: carrying value GBP2.08 million, represented by 3 listed and 1 un-listed investment holdings).

The Company held cash balances of GBP309,000 at 30 September 2019, compared to cash balances of GBP315,000 at the previous 31 March 2019 year end, and it had not drawn down any part of its GBP3 million unsecured loan facility at that date. Net assets attributable to shareholders of Adams at 30 September 2019 were GBP2.32 million (equivalent to 2.81 pence per share) versus GBP2.37 million (equivalent to 2.87 pence per share) at 31 March 2019.

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 listed investments held by the Company at 30 September 2019 comprised Petrofac Limited ("Petrofac"), Eland Oil & Gas Plc ("Eland"), Diurnal Group PLC ("Diurnal"), Griffin Mining Limited ("Griffin") and Circassia Pharmaceuticals plc ("Circassia"). In addition, the Company holds shares and loan notes in unquoted Sherwood Holdings Limited which has Source Bioscience Limited ("Source Bioscience") as its principal subsidiary company asset.

Petrofac is listed on the Main Market of the London Stock Exchange and is a multinational service provider to the oil and gas production and processing industry. The company, which has 31 offices and approximately 13,500 staff worldwide, designs, builds, operates and maintains oil and gas facilities with a focus on delivering first class project execution, cost control and effective risk management. For the six months ended 30 June 2019, Petrofac reported a profit of US$135 million after tax on revenue of US$2.82 billion. Net cash stood at US$69 million at 30 June 2019.

Eland is an AIM listed independent oil and gas company focused on production and development in principally the Niger Delta in West Africa where, through its joint venture company Elcrest Exploration and Production Nigeria Ltd, it has acquired a number of oil field licenses. Eland's increasing production led to record revenues of US$106.0 million in the six months to 30 June 2019 and a resultant US$32.7 million post-tax profit for that period.

Diurnal is an AIM listed specialty pharmaceutical company dedicated to developing high-quality hormone therapeutics to aid lifelong treatment for rare and chronic endocrine conditions, initially by developing and marketing products for the rare orphan diseases congenital adrenal hyperplasia and adrenal insufficiency including its Alkindi(R) and Chronocort(R) products. Initial revenues grew to GBP1 million for the year ended June 2019, which coupled with continued significant investment in research and development and marketing, resulted in a loss after tax of GBP12.3 million for that year.

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. For the six months ended 30 June 2019, Griffin reported a much reduced profit of US$4.1 million after tax on revenue of US$38.6 billion, reflecting falling zinc metal prices and significantly higher smelter treatment charges.

Circassia is an AIM listed specialty pharmaceutical company focused on respiratory disease and which markets innovative asthma management products including the chronic obstructive pulmonary disease products Tudorza(R) and Duaklir(R) as well as the ventilator-compatible novel nitric oxide NIOX(R) product. Revenues amounted to GBP27.9 million for the six months ended 30 June 2019, which coupled with continued significant investment in development and marketing, resulted in an operating loss of GBP19.3 million for that period.

Source Bioscience is a private company that is an international provider of state-of-the art laboratory services and products and has an expertise in clinical diagnostics, genomics, proteomics, drug discovery & development research and analytical testing services.

Post period end investment transactions. Subsequent to 30 September 2019, Adams realised its investment in Eland in full, generating investment disposal proceeds amounting to GBP328,000. Together with other post 30 September 2019 cash flows, Adams currently has cash balances of approximately GBP640,000, in addition to an unused loan facility of GBP3.0 million, available for further investment as and when the Directors identify appropriate attractive opportunities to exploit.

Outlook

There is continued reason for investment caution in the near term, given that the global economy is slowing down as reflected by falling GDP output in the US and China, coupled with near recession conditions in Germany, Italy and the UK. The key threats to a sustained global recovery include the continuing trade war between the US and China, ongoing Brexit uncertainties and worldwide debt to GDP ratios which are now at their highest levels since the Second World War.

We will, therefore, continue to maintain a rigorous and highly selective investment approach with a view to exploiting opportunities as they emerge and we are confident that this approach will enable us to build considerable value for shareholders going forward.

Michael Bretherton

Chairman

27 November 2019

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 Corporate Finance Limited 
Lucy Williams, Duncan Vasey           Tel: +44 207 469 0930 
 

STATEMENT OF COMPREHENSIVE INCOME

FOR THE SIX MONTH PERIOD TO 30 SEPTEMBER 2019

 
                                                                                   6 months 
                                                      6 months                        ended 
                                                         ended     Year ended        30 Sep 
                                                   30 Sep 2019    31 Mar 2019          2018 
                                          Note     (Unaudited)      (Audited)   (Unaudited) 
                                                       GBP'000        GBP'000       GBP'000 
 (Loss)/gain on investments                5              (31)            317           541 
 Dividend income                                            54             87            57 
                                                --------------  -------------  ------------ 
 Investment return                                          23            404           598 
 
 Expenses and other income 
 Administrative expenses                                  (73)          (172)          (86) 
 Other income                                                -             14             - 
 Operating (loss)/profit                                  (50)            246           512 
 
 Interest income                                             4             11             5 
 
 (Loss)/profit before income tax                          (46)            257           517 
 
 Income tax expense                                          -              -             - 
 
 (Loss)/profit and total comprehensive 
                                                --------------  -------------  ------------ 
 (Loss)/income for the period                             (46)            257           517 
                                                ==============  =============  ============ 
 
 Basic and diluted (loss)/earnings 
  per share                                10          (0.06)p          0.31p         0.63p 
                                                --------------  -------------  ------------ 
 

There are no other items of comprehensive (loss)/income.

STATEMENT OF FINANCIAL POSITION

AS AT 30 SEPTEMBER 2019

 
                                              As at          As at          As at 
                                        30 Sep 2019    31 Mar 2019    30 Sep 2018 
                                        (Unaudited)      (Audited)    (Unaudited) 
                                Note        GBP'000        GBP'000        GBP'000 
 Assets 
 Non-current assets 
 Investments                     6            2,024          2,075          2,622 
 
 Current assets 
 Trade and other receivables     7                3              2              6 
 Cash and cash equivalents                      309            315             30 
                                      -------------  -------------  ------------- 
 Current assets                                 312            317             36 
                                      -------------  -------------  ------------- 
 
 Total assets                                 2,336          2,392          2,658 
                                      -------------  -------------  ------------- 
 
 Liabilities 
 Current liabilities 
 Trade and other payables        8             (16)           (26)           (32) 
                                      -------------  -------------  ------------- 
 Total liabilities                             (16)           (26)           (32) 
                                      -------------  -------------  ------------- 
 
 Net current assets                             296            291              4 
                                      -------------  -------------  ------------- 
 
 Net assets                                   2,320          2,366          2,626 
                                      =============  =============  ============= 
 
 Equity 
 Called up share capital         9              826            826            826 
 Accumulated gains                            1,494          1,540          1,800 
 Total shareholder equity                     2,320          2,366          2,626 
                                      =============  =============  ============= 
 
 

STATEMENT OF CHANGES IN EQUITY

FOR THE SIX MONTH PERIOD TO 30 SEPTEMBER 2019

 
                                                                Foreign 
                                                               currency 
                                        Share      Share    translation       Accumulated 
                                      Capital    Premium        reserve    gains/(losses)     Total 
                                      GBP'000    GBP'000        GBP'000           GBP'000   GBP'000 
 
 At 31 March 2018 (audited)             1,001      1,401          (244)              (49)     2,109 
                                    ---------  ---------  -------------  ----------------  -------- 
 
 Total comprehensive gain 
  for period                                -          -              -               517       517 
 Redenomination of share 
  capital                               (175)        175              -                 -         - 
 Elimination of foreign currency 
  reserve                                   -      (244)            244                 -         - 
 Reclassification of share 
  premium                                   -    (1,332)              -             1,332         - 
 
 At 30 September 2018 (unaudited)         826          -              -             1,800     2,626 
                                    ---------  ---------  -------------  ----------------  -------- 
 
 Total comprehensive loss 
  for period                                -          -              -             (260)     (260) 
 
 At 31 March 2019 (audited)               826          -              -             1,540     2,366 
                                    ---------  ---------  -------------  ----------------  -------- 
 
 Total comprehensive loss 
  for period                                -          -              -              (46)      (46) 
 
 At 30 September 2019 (unaudited)         826          -              -             1,494     2,320 
                                    =========  =========  =============  ================  ======== 
 

STATEMENT OF CASH FLOWS

FOR THE SIX MONTH PERIOD TO 30 SEPTEMBER 2019

 
 
                                                  6 months           Year       6 months 
                                                     ended          ended          ended 
                                               30 Sep 2019    31 Mar 2019    30 Sep 2018 
                                               (Unaudited)      (Audited)    (Unaudited) 
                                                   GBP'000        GBP'000        GBP'000 
 
 (Loss)/profit for the period                         (46)            257            517 
 Unrealised loss/(gain) on revaluation 
  of investments                                       277          (174)          (541) 
 Realised gain on disposal of investments            (246)          (143)              - 
 (Increase)/decrease in trade and 
  other receivables                                    (1)              5            (4) 
 (Decrease)/increase in trade and 
  other payables                                      (10)              -             11 
 
 Net cash outflows from operating 
  activities                                          (26)           (55)           (17) 
                                            --------------  -------------  ------------- 
 
 Cash flows from investing activities 
 Proceeds from sales of investments                    579            529              - 
 Purchase of investments                             (559)          (211)            (5) 
 
 Net cash generated/(used) in investing 
  activities                                            20            318            (5) 
                                            --------------  -------------  ------------- 
 
 Net (decrease)/increase in cash 
  and cash equivalents                                 (6)            263           (22) 
 
 Cash and cash equivalents at beginning 
  of period                                            315             52             52 
 
 Cash and cash equivalents at end 
  of period                                            309            315             30 
                                            ==============  =============  ============= 
 
 

NOTES TO THE FINANCIAL STATEMENTS

FOR THE SIX MONTH PERIOD TO 30 SEPTEMBER 2019

The accounting policies and explanatory notes set out below from an integral part of the financial statements.

   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 2019. These include unaudited comparatives for the six months ended 30 September 2018 together with audited comparatives for the year ended 31 March 2019.

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 2020 which are based on the recognition and measurement principles of International Financial Reporting Standards (IFRS) as adopted by the European Union (EU). 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 2019. 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 EU 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 confirm that they are satisfied that the Company has adequate financial resources to continue in business for the foreseeable future based on the current liquid resources available. For this reason, they continue to adopt the going concern basis in preparing 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 2019 which received an unqualified audit opinion. A copy of these financial statements is available on the Company website at www.adamsplc.co.uk.

   5     Segment reporting 

Operating segments for Adams Plc are reported based on the financial information provided to the Board, which is used to make strategic decisions. The Directors are of the opinion that under IFRS 8 'Operating segments' the Company has only one reportable segment, being Investment Return. The Board assesses the performance of the operating segment based on financial information which is measured and presented in a manner consistent with that in the financial statements.

The principal sources of revenue for the Company in the period to 30 September 2019 were as follows:

 
                                                          6 months                                  6 months 
                                                          ended 30           Year ended             ended 30 
                                                          Sep 2019          31 Mar 2019             Sep 2018 
                                                           GBP'000              GBP'000              GBP'000 
            Unrealised (loss)/gain on 
             investments                                     (277)                  174                  541 
            Realised gains on investments                      246                  143                    - 
                                               -------------------  -------------------  ------------------- 
            Total (loss)/gain on investments                  (31)                  317                  541 
                                               ===================  ===================  =================== 
 
   6      Investments 

An analysis of movements in the value of the Company's investments is as follows:

 
                                     Quoted   Unquoted 
                                     Equity     Equity      Unquoted 
                                     Shares     Shares    Loan Notes     Total 
                                    GBP'000    GBP'000       GBP'000   GBP'000 
 Fair value at 31 March 2018          1,968          5           103     2,076 
 Additions at cost                        -          -             5         5 
 Unrealised revaluation gains           541          -             -       541 
                                   --------  ---------  ------------  -------- 
 Fair value at 30 September 2018      2,509          5           108     2,622 
 Additions at cost                      200          -             6       206 
 Disposals                            (386)          -             -     (386) 
 Unrealised revaluation loss          (367)          -             -     (367) 
                                   --------  ---------  ------------  -------- 
 Fair value at 31 March 2019          1,956          5           114     2,075 
 Additions at cost                      555          -             4       559 
 Disposals                            (333)          -             -     (333) 
 Unrealised revaluation loss          (277)          -             -     (277) 
                                   --------  ---------  ------------  -------- 
 Fair value at 30 September 2019      1,901          5           118     2,024 
                                   ========  =========  ============  ======== 
 
   7     Trade and other receivables 
 
                             As at                As at                As at 
                       30 Sep 2019          31 Mar 2019          30 Sep 2018 
                           GBP'000              GBP'000              GBP'000 
 Prepayments                     3                    2                    6 
               -------------------  -------------------  ------------------- 
                                 3                    2                    6 
               ===================  ===================  =================== 
 

The carrying amount of prepayment is approximate to their fair value.

   8     Trade and other payables 
 
                                        As at                As at                As at 
                                  30 Sep 2019          31 Mar 2019          30 Sep 2018 
                                      GBP'000              GBP'000              GBP'000 
 Trade payables                            11                   11                   13 
 Accruals and other creditors               5                   15                   19 
                                           16                   26                   32 
                                =============  ===================  =================== 
 

The carrying amount of trade and other payables approximates to their fair value.

   9     Share capital and share premium 
 
                                         Number of 
                                     shares issued      Share      Share 
                                         and fully    capital    premium 
 Ordinary shares                           paid up    GBP'000    GBP'000 
 
 At 1 April 2018                        82,553,232      1,001      1,401 
                                   ---------------  ---------  --------- 
 
 Redenomination of share capital                 -      (175)        175 
 Elimination of foreign currency 
  reserve                                        -          -      (244) 
 Reclassification of share 
  premium                                        -          -    (1,332) 
 
 At 30 September 2018                   82,553,232        826          - 
                                   ---------------  ---------  --------- 
 
 Issue of shares                                 -          -          - 
 
 At 31 March 2019                       82,553,232        826          - 
                                   ---------------  ---------  --------- 
 
 Issue of shares                                 -          -          - 
 
 At 30 September 2019                   82,553,232        826          - 
                                   ---------------  ---------  --------- 
 

On 10 August 2018, a special resolution was passed authorising the par value of the Company's Ordinary Shares to be redenominated from EUR0.01 to GBP0.01. On that same date, resolutions were also passed that GBP244,000 of share premium be cancelled and applied to eliminate the Foreign Currency Translation Reserve and that the remaining balance on the Company's share premium account be reclassified as distributable reserves.

The authorised Ordinary share capital of the Company at 30 September 2019, 31 March 2019 and 30 September 2018 is 350,000,000 Ordinary Shares of GBP0.01.

   10    (Loss)/earnings per share 

The basic (loss)/earnings per share is calculated by dividing the (loss)/profit after tax attributable to equity shareholders by the weighted average number of Ordinary Shares in issue during the period:

 
 
                                              6 months           Year       6 months 
                                                 ended          ended          ended 
                                           30 Sep 2019    31 Mar 2019    30 Sep 2018 
 
 (Loss)/profit after tax attributable 
  to equity holders of the Company 
  (GBP'000)                                       (46)            257            517 
 
 Weighted average number of Ordinary 
  Shares                                    82,553,232     82,553,232     82,553,232 
 
 Basic and diluted (loss)/earnings 
  per share                                    (0.06)p          0.31p          0.63p 
 

There were no potentially dilutive shares in issue as at 30 September 2019, 31 March 2019 and 30 September 2018.

   11    Events after reporting date 

Following the 30 September 2019 half year end, the Company disposed of its entire remaining holding of 199,911 shares in Eland Oil & Gas Plc for a cash consideration of GBP328,000.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

END

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