City round-up: Redx Pharma; Warehouse REIT; Strix

Cheshire drug discovery group Redx Pharma reported results for the year ended September 30, 2020, which showed increased revenues, but wider losses.

The Alderley Park company achieved a turnover of £5.685m, up from £3.131m. Pre-tax losses widened from £6.335m the previous year to £9.168m.

However, non-executive chairman, Iain Ross described 2020 as a “transformational year” for the business.

He said: “Redx has overcome the common industry challenge of funding and has ended the period with a strong balance sheet and the backing of new specialist life science investors.

“Despite clinical development challenges that have affected us, as well as many other companies in our sector, as a result of the global COVID-19 pandemic, Redx has managed to progress its pipeline, further developing its lead programmes in oncology and fibrosis, and is on track to deliver on key milestones in 2021.

“We have a strong and talented management and scientific team and it is with this expertise that Redx has continued to grow and move forward with its strategy.”

Chief executive, Lisa Anson, said: “We are excited to report on the growing strength and capabilities of Redx.

“Over the past 12 months, with highly experienced scientific and management teams in place, we have made significant progress with our pipeline as we continue to apply our distinctive approach to drug discovery.

“In further recognition of our capabilities we also completed two significant partnering deals with AstraZeneca and Jazz Pharmaceuticals.”

She added: “Having now gained the backing of key specialist life science investors, we start 2021 in a strong and confident position.

“Key milestones lie ahead of us in the coming months. I look forward to reporting on these as we continue on our journey to becoming a leading biotech company focused on the development of novel targeted medicines that have the potential to transform the treatment of cancer and fibrosis.”

Redx secured a $30m financing package with Redmile Group and Sofinnova Partners in July 2020, and post-period, in December 2020, a placing and open offer of £25.7m.

Cash balances at September 30, 2020 were £27.5m, compared with £3.7m the year before.

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Andrew Bird

Warehouse REIT, the AIM-listed specialist warehouse investor with an operation in Chester, revealed strong activity in a trading update for the period since October 1, 2020.

It said rent collection has remained strong with 95% of the total rent due on the December quarter date collected as at January 25 2021, of which three per cent has been deferred by agreement with customers.

This level of rent collection is higher than at the equivalent date for the March, June and September quarters.

For the financial year ending March 31, 2021, the company has now received 96% of rents due, which is expected to increase further over the quarter.

During the period the company completed 19 new lettings and 24 lease renewals across 238,900 sq ft of space.

The portfolio’s total occupancy has increased by 0.6% to 94.9% – as at December 31, 2020 – with effective vacancy just 2.6% excluding units under refurbishment or under offer to let.

The Company also completed the acquisition of 11 assets for a combined price of £80.2m, before costs, at an average net initial yield of 6.3%, taking the portfolio to more than seven and a half million sq ft.

Andrew Bird, managing director of Tilstone Partners, the investment advisor of Warehouse REIT, said: “Alongside Warehouse REIT’s disciplined deployment of shareholders’ funds from the July 2020 fundraise, we continue to deliver strong operational performance from the Company’s diversified portfolio of UK warehouse assets.

“Once again, the company has achieved rents on new lettings in excess of valuation as competition for space from a broad range of tenants has translated into increased occupancy levels.

“This has been achieved against a backdrop of local and national lockdowns, reflecting the tenant-critical nature of our assets and strength of our occupier relationships.”

He added: “Whilst the market for industrial assets remains competitive, we continue to identify attractive acquisition opportunities.

“Advanced purchase due diligence is under way on several assets that meet Warehouse REIT’s investment criteria, at both an individual asset and portfolio level.

“Underpinned by the company’s high levels of rent collection and confidence in the ongoing asset management and with the benefit of the recent deployment of capital ahead of target, the company is pleased to have declared a quarterly dividend of 1.55 per share.”

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Mark Bartlett, Strix CEO (Credit: Twitter / Strix Group)

Strix the Isle of Man-based kettle controls company, said it is on track to double group revenues over the next five years.

In a trading statement for the year to December 31, 2020, it said despite the impact on the global economy, the group is robust and, as a market leader with an unrivalled global footprint, remains confident in its future prospects.

It said it is in a strong position to continue to invest in compelling growth opportunities and well placed to benefit from the acceleration in demand and emerge as a stronger business once COVID-19 passes.

Updating its current trading performance, the group experienced a marked recovery in the second half, as anticipated, and a strong order book has enabled it to deliver around two per cent growth in adjusted profit after tax for the full year versus the previous financial year (2019: £28.9m).

Strong sales since June have been driven by replenishment of pipeline stock and a strong seasonal uplift.

The group said this performance demonstrates the resilience of Strix’s business model, which benefits from geographical and product diversification, and is strengthened further by its high cash generation and prudent control of its balance sheet.

Current strong order book visibility for the first quarter underpins the board’s continued confidence.

The business remains highly cash generative, maintains a robust balance sheet and has a strong liquidity position.

As at December 31, 2020, net debt was lower than previous guidance for this financial year, having successfully implemented a range of efficiency measures and strategic initiatives.

Given the group’s performance in 2020 and the board’s confidence in the continued strength of its cash generation, the board confirms its intention to pay a total dividend of 7.7p per share for the 2020 financial year, inclusive of the 2.6p per share paid as an interim dividend.

Chief executive, Mark Bartlett, said: “Strix has successfully delivered modest growth in adjusted profit after tax for the full year which is testament to how well the company has dealt with the challenges of the pandemic.

“Consistent with what was announced at the Capital Markets Day in November, the recent strong performance underpins our confidence of doubling group revenues over the next five years.

“We remain focused on investing in compelling growth opportunities to support this medium-term ambition, as well as executing on ESG (environmental, social and corporate governance) commitments which is core to our strategy to provide a safer sustainable future for our customers.”

The group will be announcing its preliminary results for the year ended December 31, 2020 on March 24, 2021.