Adams PLC on Thursday said profit grew more than 40% higher during the first half of its current financial year, as the company progresses with its wind-up efforts.

The investor in small- to mid-cap companies in the UK and Europe said pretax profit for the six months to September 30 grew 42% to £292,000 from £447,000 the year before.

Net assets were 3.72 pence per share on September 30, up 8.4% from 3.42p on March 31.

Its investment return rose 35% year-on-year to £551,000 from £387,000, while administrative expenses increased 8.0% to £104,000 from £96,000.

Shares in Adams were down 33% at 3.00 pence each in London on Thursday afternoon.

Chair Michael Bretherton said: ‘The directors believe the UK small-cap public markets have changed significantly over the last few years, with a continuing deterioration in liquidity and declining access to cost-effective growth capital. Many of the small-cap listed companies included in the company’s investment portfolio are, therefore, also in the situation where their current public market valuations do not reflect their underlying potential, and there are no indications that these markets are expected to recover in the foreseeable future.

‘As a result, the directors consider that the company’s strategy, with a focus to invest in the small to middle market capitalisation sectors of the UK or Europe, is no longer sufficiently attractive. In addition, the company only has a small capital base with total balance sheet net assets of £5.4 million as at September 30 and which severely limits the alternative investment strategy options available to it.

‘The directors have, therefore, concluded that the company should not make any further investments and instead should pursue an orderly realisation of existing investments and return of capital to shareholders over the short to medium term, following which it is expected that the company will be voluntarily wound up.’

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