TIDMADA
RNS Number : 5188S
Adams PLC
26 June 2018
26 June 2018
Adams Plc
("Adams" or the "Company")
Annual Report and Financial Statements 2018
AUDITED RESULTS FOR THE YEARED 31 MARCH 2018
Adams Plc ("Adams" or the "Company) announces its audited
financial results for the year ended 31 March 2018.
Highlights:
- Net assets at 31 March 2018 of GBP2.11 million (2017: GBP0.95 million).
Net assets per share 2.55 pence at 31 March 2018 (2017: 2.29
pence).
- Profit after tax of GBP0.02 million (2017: profit of GBP0.01 million).
- Net proceeds of GBP0.98 million from new share subscriptions.
- Investments at 31 March 2018 valued at GBP2.07 million (2017: GBP0.94 million).
- Spend on new investments of GBP1.59 million (2017: GBP0.02 million).
- Investment realisation proceeds of GBP0.73 million (2017: GBP0.15 million).
- Change in presentational currency from Euros to Pounds Sterling.
- Adoption of revised investing policy.
Michael Bretherton, Chairman, said:
"The Board continues to seek attractive investment opportunities
coupled with a focus on financial discipline as the strategy to
best navigate challenging markets and the uncertain global climate.
We remain committed to delivering additional value for our
shareholders going forward."
The Company's Annual Report 2018 will shortly be posted to
shareholders together with a Circular and 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 11.00 a.m. on Friday 10 August 2018 at
IOMA House, Hope Street, Douglas, Isle of Man, IM1 1AP.
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 Tel: +44 207 469
3393
Chairman's Statement
Adams Plc (the "Company") is an AIM listed investment company
primarily focused on special situation investment opportunities in
the small to middle-market capitalisation sectors in the UK or
Europe.
The presentational currency of Adams Plc ("Adams" or the
"Company") was changed during the year from Euros to Pounds
Sterling. This change in the reporting currency of the Company was
made to reflect the fact that the Company no longer has Euro based
operations, assets or significant transactions denominated in
Euros. In accordance with accounting standards, the comparative
financial information for the year ended 31 March 2017 as
previously reported in Euros, has been restated into Pounds
Sterling using the procedures outlined in note 2.13 to the
financial statements.
Adams reported a profit after tax of GBP180,000 for the year
ended 31 March 2018 compared to a profit of GBP77,000 in the prior
year. The increase in profitability is principally due to higher
reported gains on the valuation of investments.
During the year, the Company spent GBP1.59 million on the
purchase of additional investments and realised proceeds of GBP0.73
million from investment disposals. The carrying value of
investments at 31 March 2018 was GBP2.08 million, represented by 3
listed and 3 un-listed investment holdings, versus GBP0.94 million
at 31 March 2017, represented by 4 listed and 1 un-listed
investment holdings.
Net assets increased to GBP2.11 million (equivalent to 2.55
pence per share) at the 31 March 2018 balance sheet date, compared
with GBP0.95 million (equivalent to 2.29 pence per share) at the
previous year end. The increase in net assets reflects net proceeds
of GBP0.98 million received from new share subscriptions, together
with the profit of GBP0.18 million reported for the year.
Cash and cash equivalent balances were GBP52,000 at 31 March
2018 compared to cash balances of GBP35,000 at 31 March 2017.
Underwritten open offer and majority shareholder controlled
undertaking
In order to provide the Company with additional resources with
which to fund its investment strategy, the Company raised GBP0.98
million (after expenses) in June 2017 pursuant to an underwritten
open offer of 41,276,616 ordinary shares at 2.5p per share. Under
the open offer, existing shareholders had an opportunity to
subscribe for new shares at the 2.5p issue price by taking up their
respective open offer entitlements which were calculated on a pro
rata basis to their holding in the existing shares.
The open offer was fully underwritten by the Company's largest
shareholder, Richard Griffiths and following the open offer, which
was approved by shareholders on 28 June 2017, the number of Adams
ordinary shares in issue increased to 82,553,232 and consequent to
the subscription and underwriting shares issued to Richard
Griffiths, his holding increased to 63.8 per cent of the Company's
issued share capital. As a result, Adams became a controlled
undertaking of Richard Griffiths who will, if he so wishes, be able
to further increase his interests in Adams shares without making a
mandatory offer to the remaining shareholders. Subsequent to the
open offer, Richard Griffiths has purchased further Adams shares in
the AIM market such that his current holding in the Company is now
77.3 per cent.
The Company, Cairn Financial Advisers LLP (who are the Company's
Nominated Advisor) and Richard Griffiths entered into a
relationship agreement dated 2 June 2017, which governs the
relationship between the Company and Richard Griffiths following
the open offer, to ensure that the Company shall be managed
independently for the benefit of shareholders as a whole.
Business model and change of investing policy
On 8 September 2017, shareholders approved a proposal by the
Company's directors to revise the investing policy to one which
provides the Board with a broader, more flexible approach to
creating shareholder value. The existing policy at that time was
focused on targeting undervalued or pre-commercialisation projects
and assets in the biotechnology sector, whilst also considering
opportunities in the wider technology and other sectors.
Under the revised investing policy, 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 they perceive 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 currently held by the Company comprise
Petrofac Limited, Eland Oil & Gas Plc and Communisis Plc. In
addition, the Company holds shares and loan notes in unquoted
Sherwood Holdings Limited and unquoted shares in both Abaco Capital
Plc and Oxford Pharmascience Limited.
Petrofac is a multinational service provider to the oil and gas
production and processing industry. The company designs, builds,
operates and maintains oil and gas facilities with a focus on
delivering first class project execution, cost control and
effective risk management. Petrofac has a 36-year track record and
has grown significantly to become a constituent of the FTSE 250
Index. The company has 31 offices and approximately 13,500 staff
worldwide, comprising more than 80 nationalities.
Eland is an independent oil and gas company with the principal
business objective of identifying, acquiring and developing
interests in oil and gas assets in West Africa, focused initially
on Nigeria including the prolific Niger Delta.
Communisis is a leading provider of outsourced digital asset
management and personalised customer communication services.
Abaco Capital (formerly Oxford Pharmascience Plc) underwent a
demerger of its Oxford Pharmascience Limited business on 21
December 2017 and subsequently cancelled its AIM listing on 9 May
2018. The company is now in the process of undertaking a members'
voluntary liquidation and a distribution of funds to shareholders.
The total amount expected to be available to distribute to
shareholders is circa GBP19.0 million, on which basis Adams would
receive approximately GBP30,000, and the distribution is expected
to occur in the period around September to November 2018.
Oxford Pharmascience (as demerged from Abaco Capital) is a drug
development company that re-develops approved drugs to make them
better, safer and easier to take and it has a current focus to
develop improved formulations of non-steroidal anti-inflammatory
drugs (NSAIDs) and statins.
Source Bioscience 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.
Corporate action proposals
Following the change in the presentational currency of Adams
from Euros to Pounds Sterling during the year, it is proposed that
a redenomination of the Company's share capital from Euros into
Pounds Sterling is also undertaken, with the par value of the
ordinary shares converting from EUR0.01 to GBP0.01, and that the
AIM quotation of its ordinary shares is also subsequently changed
from Euros to Pounds Sterling.
In addition, it is proposed that part of the Company's share
premium be applied to eliminate the foreign currency translation
reserve and that the balance of the share premium be reclassified
as distributable reserves and that the Directors are authorised to
purchase the Company's own ordinary shares in the open market
subject to certain conditions and limited to a maximum of 14.99 per
cent of the issued share capital of the Company. The Directors
believe that the ability of the Company to purchase its own shares
offers an important mechanism for managing capital efficiently. In
particular, the Directors may wish to take advantage of
circumstances where a purchase of its own shares would represent
good use of the Company's available cash resources and increase net
asset value per share and shareholder value.
The full detail of these corporate action proposals is included
in the Notice of Annual General Meeting for the AGM which is to be
held at IOMA House, Hope Street, Douglas, Isle of Man, IM1 1AP on
10 August 2018 at 11a.m.
Outlook
Global economic growth was stronger than expected in 2017, with
a recovery in investment, manufacturing, and trade becoming
visible. More moderate economic growth is forecast for 2018 as
central banks gradually remove their post crisis fiscal
accommodation. However, these positive growth trends must be
tempered by the increasing threat of a decrease in liberalised
global trade and the potential for the escalation of political
tensions between advanced trading nations. Despite these macro
considerations the Adams directors are confident in the underlying
fundamentals, technologies and growth potential of the companies
within our investment portfolio.
The Board continues to seek attractive investment opportunities
coupled with a focus on financial discipline as the strategy to
best navigate challenging markets and the uncertain global climate.
We remain committed to delivering additional value for our
shareholders going forward.
Michael Bretherton
Chairman
26 June 2018
Statement of Income
Year ended Year ended
31 March 2018 31 March 2017
GBP'000 GBP'000
----------------------------------------------- --------------- ----------------
Dividend income 45 15
Gain on investments 280 204
------------------------------------------------ --------------- ----------------
Investment return 325 219
Expenses
Administrative expenses (155) (147)
------------------------------------------------ --------------- ----------------
Operating profit 170 72
Interest income 10 5
------------------------------------------------ --------------- ----------------
Profit on ordinary activities before taxation 180 77
Tax on profit on ordinary activities - -
----------------------------------------------- --------------- ----------------
Profit for the year 180 77
------------------------------------------------ --------------- ----------------
Basic and diluted profit per share 0.25p 0.18p
------------------------------------------------ --------------- ----------------
Statement of Comprehensive Income
Year ended Year ended
31 March 2018 31 March 2017
GBP'000 GBP'000
-------------------------------------------------------------- --------------- ----------------
Profit for the year 180 77
--------------------------------------------------------------- --------------- ----------------
Other comprehensive expense
Exchange differences arising on change in reporting currency - (2)
--------------------------------------------------------------- --------------- ----------------
Total comprehensive gain for the year 180 75
--------------------------------------------------------------- --------------- ----------------
Statement of Financial Position at 31 March 2018
31 March 2018 31 March 2017 31 March 2016
GBP'000 GBP'000 GBP'000
------------------------------ -------------------- ---------------- ----------------
Assets
Non-current assets
Investments 2,076 935 690
------------------------------------- -------------- ---------------- ----------------
Current assets
Prepayments 2 2 2
Cash and cash equivalents 52 35 204
------------------------------------- -------------- ---------------- ----------------
Current assets 54 37 206
------------------------------------- -------------- ---------------- ----------------
Total assets 2,130 972 896
------------------------------------- -------------- ---------------- ----------------
Liabilities
Current liabilities
Trade and other payables (21) (26) (25)
------------------------------------- -------------- ---------------- ----------------
Total liabilities (21) (26) (25)
------------------------------------- -------------- ---------------- ----------------
Net current assets 33 11 181
------------------------------------- -------------- ---------------- ----------------
Net assets 2,109 946 871
------------------------------------- -------------- ---------------- ----------------
Equity
------------------------------ ---- -------------- ---------------- ----------------
Called up share capital 1,001 636 636
Share premium 1,401 783 783
Foreign currency translation
reserve (244) (244) (242)
Accumulated losses (49) (229) (306)
------------------------------------- -------------- ---------------- ----------------
Total shareholder equity 2,109 946 871
------------------------------------- -------------- ---------------- ----------------
Statement of Changes in Equity as at 31 March 2018
Share Foreign currency translation Accumulated
Share Capital Premium reserve Losses Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 April 2016 636 783 (242) (306) 871
Changes in equity
Total comprehensive gain - - (2) 77 75
--------------------------- -------------- --------- ------------------------------------ ------------ --------
At 31 March 2017 636 783 (244) (229) 946
--------------------------- -------------- --------- ------------------------------------ ------------ --------
Changes in equity
Issue of shares 365 618 - - 983
Total comprehensive gain - - - 180 180
--------------------------- -------------- --------- ------------------------------------ ------------ --------
At 31 March 2018 1,001 1,401 (244) (49) 2,109
--------------------------- -------------- --------- ------------------------------------ ------------ --------
Statement of Cash Flows for the year ended 31 March 2018
Year ended Year ended
31 March 2017
31 March
2018 *Restated
GBP'000 GBP'000
Profit for the year 180 77
Unrealised gain on revaluation of
portfolio investments (237) (188)
Realised gain on disposal of portfolio
investments (43) (16)
Decrease in prepaid expenses - 1
Decrease in trade and other payables (5) (2)
---------------------------------------------- ----------- --------------
Net cash outflow from operating activities (105) (128)
---------------------------------------------- ----------- --------------
Cash flows from investing activities
Purchase of portfolio investments (1,591) (191)
Proceeds from sales of investments 730 150
---------------------------------------------- ----------- --------------
Net cash used in investing activities (861) (41)
---------------------------------------------- ----------- --------------
Cash flows from financing activities
Issue of ordinary share capital 983 -
Net cash generated from financing -
activities 983
-------------------------------------------- ----------- --------------
Net increase / (decrease) in cash
and cash equivalents 17 (169)
Cash and cash equivalents at beginning
of year 35 204
---------------------------------------------- ----------- --------------
Cash and cash equivalents at end of
year 52 35
---------------------------------------------- ----------- --------------
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END
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