Adams plc

("Adams" or the "Company")

Interim Results for the Six Months ended 30 September 2021

Results

Adams Plc ("Adams" or the "Company") reported a loss after tax of £0.648 million for the six months to 30 September 2021 compared to a profit of £1.091 million in the six months ended 30 September 2020. The reduction in profitability is principally due to investment return losses of £0.567 million compared to investment return gains of £1.162 million in the previous September 2020 half year.

In April 2021, Adams raised net cash proceeds of £4.057 million under a placing and open offer which significantly increased the Company's net asset base and cash balances.

During the six months ended 30 September 2021, the Company spent £2.948 million on equity investments, of which four were new investments and one was a follow-on investment. There were no investment realisations for cash during the period but its newly acquired listed investment in Telit Communications Plc ("Telit") was acquired by Trieste Acquisitions Holding Limited ("Trieste") in August 2021. The 380,000 shares in Telit acquired by the Company on 8 July 2021 were rolled over into the unlisted holding company of Trieste, Notano Midco Limited ("Notano"), under the terms of a recommended share offer alternative announced by Trieste on 21 May 2021.

Adams held eleven investments as at 30 September 2021, of which nine were listed and two were un-listed, and for which the total investment carrying value was £7.49 million (31 March 2021: £5.11 million, represented by six listed and one un-listed investment holdings).

The Company held cash balances of £1.09 million as at 30 September 2021, compared to cash balances of £0.05 million at the previous 31 March 2021 year end.

Net assets increased to £8.56 million (equivalent to 5.87p per share) at the 30 September 2021 balance sheet date, compared with £5.15 million (equivalent to 6.24p per share) at 31 March 2021. The £3.41 million increase in net assets reflects the £4.06 million share issue fund raise in April 2021 less the £0.65 million loss reported for the period.

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 30 September 2021 comprised C4X Discovery Holdings Plc ("C4XD"), Circassia Pharmaceuticals plc ("Circassia"), Access Intelligence Plc ("Access Intelligence"), Seeing Machines Limited ("Seeing Machines") and Griffin Mining Limited ("Griffin") and Adams also holds Oxehealth Limited ("Oxehealth") and Notano Midco  Limited ("Notano") as principal unquoted investments.

C4XD is a pioneering drug discovery company combining scientific expertise with cutting-edge drug discovery technologies to efficiently deliver world‑leading medicines which are developed by licensing partners. The company applies its enhanced DNA-based target identification and candidate molecule design capabilities to generate small molecule drug candidates across multiple disease areas including inflammation, oncology, neurodegeneration and addictive disorders. To date C4XD has successfully out-licensed two programmes with one candidate in clinical development. C4XD reported a loss after tax of £3.6 million in the six months ending 31 January 2021 inclusive of R&D investment of £3.3 million and with no revenues. Cash balances at 31 January 2021 amounted to £15.4 million. Post that period end, the company received a €7 million upfront payment in relation to an exclusive worldwide licensing agreement signed with Sanofi in April 2021 for C4XD's IL-17A oral inhibitor programme worth up to €414 million including the €7 million upfront payment and €407 million in potential development, regulatory and commercialisation milestones. There is also potential for single‐digit Sanofi royalties. The shareholding of Adams in C4XD at 30 September 2021 was, and continues to be, 2.19 per cent of the C4XD shares in issue.

Circassia is an AIM listed global medical device company focused on respiratory diagnostics and monitoring. Following a major restructuring and the transfer of the Tudorza and Duaklir products back to AstraZeneca in March 2021, Circassia has now been transformed into a debt-free business with a strong NIOX® asthma management products based continuing operations business. For the six months ended 30 June 2021, NIOX sales increased 28% to £14.6 million , due in part to a post Covid-19 peak recovery. The NIOX business generated an EBITDA profit for the first time of £0.6 million (excluding corporate overheads of £0.7 million) in this half year period and which reflected a substantial reduction in the cost base. Net cash as of 30 June 2021 amounted to £11.3 million inclusive of gross cash proceeds of £5.0 million raised through a share subscription in March 2021. The shareholding of Adams at 30 September 2021 was, and continues to be, 0.74 per cent of the Circassia shares in issue.

Access Intelligence is an AIM listed London based technology innovator delivering Artificial Intelligence/ AI software and service solutions that address the fundamental business needs of customers in the PR, 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. On 1 September 2021, Access Intelligence completed the acquisition of Isentia Group Limited, a market leading Asia Pacific focused media intelligence and award winning insights company for the corporate communications market, headquartered in Sydney, Australia. For the six months ended 31 May 2021, Access Intelligence's first half revenue increased by approximately 17 per cent. to £11.0 million and delivered an EBITDA loss in the period of £0.13 million reflecting additional investment in sales and marketing to drive global expansion. Insentia reported revenues of A$42.9 million for the six months ended 31 December 2020 and delivered an EBITDA profit in the period of A$5.5 million. The enlarged group intends to invest in and drive further innovation to deliver its strategic vision of building the leading intelligence provider for the global marketing and communications industry. Adams acquired 667,000 ordinary shares in Access Intelligence at £1.20 per share on 19 August 2021 for a total consideration of approximately £0.80 million. The shareholding of Adams in Access Intelligence as at 30 September 2021 was, and continues to be, 0.52 per cent of the Access Intelligence shares in issue.

Seeing Machines is headquartered in Australia and is an AIM listed industry leader in advanced computer vision technologies. The company designs Artificial Intelligence/ AI powered operator monitoring systems to improve transport safety in automotive, commercial fleet, aviation, rail and off-road markets. The company has pioneered such technology through algorithm development, extensive behavioural research and data, expertise in camera-based optics and embedded processing to deliver true AI driven human machine interaction. The technology incorporates warnings when human state attention impairment,  distraction and other measures are identified, in order to re-engage the operator or driver. Seeing Machines continues to grow as an automotive leader in such technology, having now won contracts with a total of seven automotive Tier 1 global customers. In the year to 30 June 2021, Seeing Machines reported underlying revenue growth of 30 per cent when using constant currency to give total revenues of A$47.2 million and a loss for the period of A$17.4 million. Seeing Machines's cash and cash equivalent balances at 30 June 2021 amounted to A$47.4 million and have subsequently been strengthened by a successful fundraise completed on 23 November 2021 of US$41m to finance accelerated growth in the rapidly expanding driver monitoring system technology market, across all transport sectors globally. The shareholding of Adams in Seeing Machines as at 30 September 2021 was 0.21 per cent of the Seeing Machines shares in issue but has subsequently been diluted to 0.20 per cent following the fundraise referred to above.

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 mining license from the Chinese Ministry of Land and Natural Resources which elevates Griffin to being one of the largest zinc producers in China. Revenues increased by 154% to US$54.1 million for the six months to 30 June 2021 and generated a profit after tax of US$10.3 million. The results benefitted from the new mining license as well as a significant improvement in the market price for zinc and lower smelter treatment charges and in addition the 2020 first half year results were adversely affected by the suspension in operations to contain the Covid-19 pandemic. The shareholding of Adams in Griffin as at 30 September 2021 was, and continues to be, 0.27 per cent of the Griffin shares in issue.

Oxehealth is a private company which is involved in vision-based patient monitoring and management, using 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. 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, generates alerts to potentially risky activity and reports on a patient's vital signs and behaviour, all without the clinician entering the patient's room. At 30 September 2021, the investment holding by Adams in Oxehealth represents 2.98 per cent of Oxehealth's issued share capital at that date.

Notano is a private company which has Telit Communications as its principal operating subsidiary and which is a global leader in Internet of Things (IoT) enablement. Telit has over twenty years of experience designing, building, and executing the most complex solutions that are redefining the rules of digital business. Telit 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. The company offers the largest portfolio of specialty IoT communications modules as well as a comprehensive platform for collecting, managing and analysing critical device data and is available as a subscription-based cloud service or as an on premise installation. Telit also offers its own IoT SIM cards and global data plans to meet a variety of applications and bandwidth requirements. In the year ended 31 December 2020, Telit generated an operating profit of US$13.2 million on revenues of US$343.6 million. Adams acquired 380,000 shares in Telit at £2.256 per share on 8 July 2021 for a total consideration of approximately £0.85 million. On 31 August 2021, the acquisition of Telit by Trieste was completed, and Adams received 380,000 ordinary shares in Notano in consideration for its 380,000 Telit shares. At 30 September 2021, the investment holding by Adams in Notano represents 0.48 per cent of Notano's issued share capital at that date.

In addition to the above investments, at 30 September 2021 Adams held quoted holdings in four other listed companies comprising 4D Pharma Plc, which is a pioneer in harnessing bacteria of the gut microbiome as a novel and revolutionary class of medicines, known as live biotherapeutics; Source Bioscience International Plc, which is an international provider of state-of-the art laboratory services, clinical diagnostics and analytical testing services; Euromax Resources Ltd, which is a Canadian development company, focused on building and operating the Ilovica-Shtuka copper and gold project in Macedonia; and Afentra Plc, which has a strategic imperative of capitalising on opportunities resulting from the accelerating energy transition on the African continent.

Outlook

Whilst the arrival of a number of Covid-19 vaccines and the associated roll-out of the global vaccination programmes has now provided a pathway for easing of the social and economic restrictions previously in force, the full economic fallout from this pandemic remains uncertain. In addition, economic threats remain including from the unprecedented levels of worldwide public debt and continued volatility in financial markets can, therefore, be expected.

In view of these uncertainties and economic threats, your Board will continue to maintain a rigorous and highly selective investment approach which is committed 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, many of which are in sectors that are regarded as defensive stocks in the current environment.

Michael Bretherton

Chairman

26 November 2021

Certain information contained in this announcement would have been deemed inside information for the purposes of Article 7 of Regulation (EU) No 596/2014 until the release of this announcement. The Directors of the Company take responsibility for this announcement.

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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.