Annual Report and Financial Statements 2014

Sarossa Plc

Annual Report and Financial Statements 2014

30 September 2014

 

AUDITED RESULTS FOR THE YEAR ENDED 30 JUNE 2014

Sarossa Plc ("Sarossa" or the "Company) announces its audited financial results for the year ended 30 June 2014.

Highlights:

- Net assets at 30 June 2014 of £17.22 million (2013: £13.53 million).

- Profit after tax of £3.69 million (2013: £0.62 million) inclusive of an exceptional release of a legacy biotechnology provision of £1.60 million (2013: £nil).

- Operating profit before exceptional items of £2.08 million (2013: £ 0.46 million).

- Portfolio investments at 30 June 2014 valued at £10.62 million represented by 4 AIM quoted holdings (2013: £7.61 million represented by 3 quoted holdings).

- Spend on new investments at cost of £1.09 million (2013: £6.65 million). 

- Re-organisation into a Jersey, Channel Islands, based group under a new Jersey holding company, Sarossa Plc.

Michael Bretherton, Chairman, said:

"We remain committed to deliver 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 are confident that this approach will enable us to build considerable value for shareholders going forward."

A letter will shortly be posted to shareholdersadvising that a full copy of the Company's Annual Report 2014 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 36, a Notice of the Annual General Meeting to be held at 11.00 a.m. on 20 November 2014 at the Company's registered office at 17 The Esplanade, St Helier, Jersey, JE2 3QA.

Enquiries :

Sarossa Plc

Mike Bretherton, Chairman 01534 719760

WH Ireland Limited (Nominated adviser)

Chris Fielding, Head of Corporate Finance 020 7220 1650

Chairman's Statement

The Group delivered a profit after tax for the year ended 30 June 2014 0f £3.69 million compared to a profit of £0.62 million in the previous year. That profit included an exceptional release of a legacy biotechnology provision of £1.60 million (2013: £nil). Operating profit before exceptional items was £2.08 million (2013: £0.46 million) and the increase of £1.62 million mainly reflects further revaluation gains amounting to £1.08 million on portfolio investments, together with an additional gain of £0.68 million on a derivative trading asset.

Antisoma Plc changed its name to Sarossa Capital Plc on 1 November 2013 in order to reflect the fact that it no longer has operations in biotechnology development and is now an investment and management company.

Sarossa Capital Plc subsequently completed a successful re-organisation into a Jersey, Channel Islands, based Group under which the former parent company became a wholly owned subsidiary of a new Jersey holding company, Sarossa Plc ('Sarossa' or 'the Company'), which was admitted to AIM on 2 May 2014. The business operation, assets and liabilities of the Sarossa Group immediately after the re-organisation were no different from those immediately before the re-organisation.

During the year, the Group spent £1.09 million on the purchase of additional portfolio investments. This spend comprised of a follow on investment in Silence Therapeutics Plc and also an investment in GVC Holdings Plc, undertaken in conjunction with the close out of an existing financial derivative position in that GVC stock.

The Company holds currently 4 portfolio investments, all of which are quoted on AIM, and for which the carrying value at 30 June 2014 was £10.62 million (30 June 2013: £7.61 million represented by 3 quoted holdings).

The Group continues to benefit from a strong balance sheet with cash and short term deposit balances of £6.13 million at 30 June 2014 compared to cash and short term deposit balances of £6.87 million at the previous 30 June 2013 year end. Net assets at 30 June 2014 were £17.22 million compared with £13.53 million at 30 June 2013.

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, that enables the development of novel molecular entities that "silence" or inactivate the genes expressed in some diseases. Additionally, the company has developed technology that preferentially delivers AtuRNAi to the vascular endothelium (AtuPLEX), the lung endothelium (DACC) and the liver (DBTC). ATU027 is the company's leading Oncology product and the company achieved a further key milestone during the last year by completing recruitment for a Phase 2a trial for Atu027 in combination with gemcitabine for pancreatic cancer. Another key target was achieved in April 2014 when Silence confirmed successful gene knockdown in non-human primates using its RNAi lung delivery system, DACC. The company has a robust IP estate protecting its proprietary technology and also has a sound balance sheet with net cash and deposits at 30 June 2014 of £26.3m. Sarossa' s shareholding at 30 June 2014 was, and continues to be, 4.65 per cent. of the issued share capital of Silence.

Plant Health Care Plc ('PCH') 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® technologies. PHC's products increase crop yields by enhancing natural processes within the plant. In 2013, the company signed a development and commercialisation agreement with Arysta LifeScience for the foliar use of Harpin αβ in several crops, in a number of geographies. The first fruit of that collaboration was the US launch in 2014 of "Astera™ with αβpro™", a mixture of Harpin αβ with the fungicide propiconazole. Development work on other products and territories continues with Arysta LifeScience. PHC is also continuing to seek other commercial agreements for both Harpin αβ and Myconate with other agricultural majors and has an active pipeline of negotiations. PHC anticipates completing at least one additional commercial agreement during the remainder of 2014. Sarossa's holding in PCH at 30 June 2014 was, and continues to be, 4.72 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

There is continued reason for investment caution in the near term, given the many threats to a sustained global recovery, including the crises in Ukraine and the Middle East, Europe's continuing debt problems and the slowing down of Federal Reserve bond purchases in the US. We remain committed, however, to deliver 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 are confident that this approach will enable us to build considerable value for shareholders going forward.

Michael Bretherton

Chairman

30 September 2014

Consolidated Statement of Comprehensive Income for the year ended 30 June 2014

There are no other items of comprehensive income.

Consolidated Statement of Changes in Equity as at 30 June 2014

Consolidated Statement of Financial Position at 30 June 2014

Consolidated Statement of Cash Flows for the year ended 30 June 2014