Half-year Report - six months ended 31 March 2017

RNS Number : 8733H
AssetCo PLC
13 June 2017
 

The information contained within this announcement is deemed by the Company to constitute inside information stipulated under the Market Abuse Regulation (EU) No. 596/2014.  Upon the publication of this announcement via the Regulatory Information Service, this inside information is now considered to be in the public domain.

 

 

Providers of management and resources to the fire and emergency services in the Middle East

 

Date: Tuesday, 13 June 2017

Immediate Release

 

AssetCo plc

("AssetCo" or the "Company")

2017 Half-year Report

for the six months ended 31 March 2017

 

Introduction

We are pleased to report the results for the six-month period ended 31 March 2017.

 

Results

The Income Statement for the six months shows an Operating Profit of £1.7m (2016; £2.1m) on Revenue of £13.3m (2016; £11.0m) and a Profit before and after Taxation of £1.7m (2016; £1.9m).  Revenue increased principally due to the weakness of sterling versus the United Arab Emirates Dirham in which currency our Revenue is received, however profits reduced because of an increase in the costs of litigation against Grant Thornton.

 

Free cash (i.e. excluding cash balances held in respect of performance bonds) increased by £5.2m during the period to £20.7m (30 September 2016; £15.5m), partly due to £3.2m cash released in respect of a performance bond.  In addition to free cash, there are restricted cash balances held in respect of performance bonds amounting to £0.3m (30 September 2016; £3.3m).

 

UAE Contract

Our business is based on the provision of an outsourced fire service to the Abu Dhabi government, a contract we have held for the past seven years and which was expected to be extended for a year until November 2017.  We have continued to supply these services satisfactorily on the same basis and on similar terms. AssetCo has now received a contract for the first five months from 17 November 2016 to 17 April 2017, which facilitates payment for that period; it is also proposed that the contract then rolls forward on similar terms and payment on the same basis.

 

Claim against Grant Thornton

The Financial Reporting Council (FRC) concluded their investigations relating to the financial years ended 2009 and 2010 which are the focus of our claim for negligence against AssetCo plc's former auditors, Grant Thornton.

 

A press release from the FRC reported that Grant Thornton have admitted that their failings arose because of significant and widespread lack of professional competence and due care in the performance of their audits.  Grant Thornton were fined £3.5m and received a severe reprimand, and the audit partner Mr Robert Napper was fined £200,000 and excluded from membership of the Institute of Chartered Accountants for three years.  The full report by the FRC entitled Facts and Acts of Misconduct: Grant Thornton UK LLP and Mr Napper, is available on the FRC website www.frc.org.uk.

 

In the meantime, we are continuing our litigation against Grant Thornton where as previously reported we have issued formal Court proceedings, for a sum which with costs and interest is in the region of £40 million, although currently this case is not due to be heard until the summer of 2018.

 

Outlook

Trading continues to be in line with management's expectations; the Board will keep shareholders updated on any developments within our Abu Dhabi business and that of the Grant Thornton claim.

 

Tudor Davies, Chairman

AssetCo plc

13 June 2017

 

 

AssetCo plc

Income Statement

for the six months ended 31 March 2017

 



Six months ended

Year ended


Note

31 March

2017

31 March

2016

30 September

2016



£'000

£'000

£'000






Revenue


13,274

11,003

23,300

Cost of sales


(9,333)

(7,922)

(16,550)

Gross profit


3,941

3,081

6,750

Administrative expenses


(2,192)

(968)

(1,874)

Operating profit


1,749

2,113

4,876

Finance income


4

7

21

Finance costs


(68)

(178)

(294)

Profit before taxation


1,685

1,942

4,603

Income tax expense


-

-

-

Profit for the period


1,685

1,942

4,603











Earnings per share (EPS):

3




Basic - pence


13.80

15.90

37.70

Diluted - pence


13.80

15.90

37.70

 

 

 

 

 

AssetCo plc

Statement of Comprehensive Income

for the six months ended 31 March 2017

 



Six months ended

Year ended



31 March

2017

31 March

2016

30 September

2016



£'000

£'000

£'000






Recognised profit for the period


1,685

1,942

4,603






Other comprehensive income:





Exchange differences on translating foreign operations


658

839

1,858

Other comprehensive income, net of tax


658

839

1,858






Total comprehensive income for the period


2,343

2,781

6,461

 



 

 

AssetCo plc

Statement of Financial Position

as at 31 March 2017





At 31 March

At 30 September



2017

2016

2016


Notes

£'000

£'000

£'000

Assets





Non-current assets





Property, plant and equipment


-

-

-

Cash held in respect of a bond

4

251

2,956

240

Total non-current assets


251

2,956

240






Current assets





Inventories


-

90

-

Trade and other receivables

5

12,187

7,282

12,498

Cash and cash equivalents

4

20,708

15,494

15,470

Cash held in respect of a bond

4

13

12

3,040

Total current assets


32,908

22,878

31,008






Total assets


33,159

25,834

31,248






Shareholders' equity





Share capital


25,474

25,474

25,474

Share premium


64,941

64,941

64,941

Profit and loss account


(62,016)

(68,039)

(64,359)

Total equity


28,399

22,376

26,056






Liabilities





Current liabilities





Trade and other payables

6

4,760

3,458

5,192

Total current liabilities


4,760

3,458

5,192

Total liabilities


4,760

3,458

5,192

Total equity and liabilities


33,159

25,834

31,248

 



 

 

AssetCo plc

Statement of Changes in Equity

for the six months ended 31 March 2017

 


Share

Capital

Share premium

Profit and loss reserve

Total

equity


£'000

£'000

£'000

£'000






Balance at 30 September 2015

25,474

64,941

(70,820)

19,595

Profit for the period

-

-

1,942

1,942

Other comprehensive income:





Exchange differences on translation

-

-

839

839

Total comprehensive income for the period

-

-

2,781

2,781






Balance at 31 March 2016

25,474

64,941

(68,039)

22,376






Profit for the period

-

-

2,661

2,661

Other comprehensive income:





Exchange differences on translation

-

-

1,019

1,019

Total comprehensive income for the period

-

-

3,680

3,680






Balance at 30 September 2016

25,474

64,941

(64,359)

26,056






Profit for the period

-

-

1,685

1,685

Other comprehensive income:

Exchange differences on translation

 

-

 

-

 

658

 

658

Total comprehensive income for the period

-

-

2,343

2,343






Balance as at 31 March 2017

25,474

64,941

(62,016)

28,399

 



 

AssetCo plc

Statement of Cash Flows

for the six months ended 31 March 2017



Six months ended

Year ended


31 March

2017

31 March

2016

30 September

2016


Note

£'000

£'000

£'000






Cash flows from operating activities





Cash generated from operations

7

1,811

2,410

2,151

Cash released in respect of a performance bond


3,232

-

-

Finance costs


(68)

(178)

(294)

Net cash generated from operating activities


4,975

2,232

1,857






Cash flows from investing activities





Finance income


4

7

21

Net cash generated from investing activities


4

7

21






Net change in cash and cash equivalents


4,979

2,239

1,878

Cash and cash equivalents at the beginning of the period


15,470

12,836

12,836

Exchange differences on translation


259

419

756

Cash and cash equivalents at the end of the period


20,708

15,494

15,470

 



 

AssetCo plc

Notes to the Financial Statements

for the six months ended 31 March 2017


1.

Legal status and activities


AssetCo plc (the "Company") is principally involved in the provision of management and resources to the fire and rescue emergency services in international markets.  It currently trades through a branch in the United Arab Emirates (UAE) and its strategy is to develop this business.  As at period end, the Company has no subsidiaries.

AssetCo plc is a public limited liability company incorporated and domiciled in England and Wales.  The address of its registered office is Singleton Court Business Park, Wonastow Road, Monmouth, Monmouthshire NP25 5JA.  The Company operates from one site in UAE.

AssetCo plc shares are listed on the Alternative Investment Market (AIM) of the London Stock Exchange

2.

Basis of preparation


The financial information in the Half-year Report has been prepared using the recognition and measurement principles of International Accounting Standards, International Financial Reporting Standards and Interpretations adopted for use in the European Union (collectively Adopted IFRSs).  The principal accounting policies used in preparing the Half-year Report are those the Company expects to apply in its financial statements for the year ending 30 September 2017 and are unchanged from those disclosed in the Annual Report and Financial Statements for the year ended 30 September 2016.

 

The financial information for the six months ended 31 March 2017 and the six months ended 31 March 2016 is unaudited and does not constitute the Company's statutory financial statements for those periods.  The comparative financial information for the full year ended 30 September 2016 has, however, been derived from the audited statutory financial statements for that period.  A copy of those statutory financial statements has been delivered to the Registrar of Companies.

 

While the financial figures included in this Half-year Report have been computed in accordance with IFRSs applicable to interim periods, this Half-year Report does not contain sufficient information to constitute an interim financial report as that term is defined in IAS 34.

 

The financial statements have been presented in sterling to the nearest thousand pounds (£'000) except where otherwise indicated.



3.

Earnings per share


Basic earnings per share is calculated by dividing the profit attributable to ordinary equity holders of the Company by the weighted average number of ordinary shares outstanding during the period.


Six months ended

Year ended


31 March

2017

31 March

2016

30 September

2016


£'000

£'000

£'000


Profit for the year

1,685

1,942

4,603


Weighted average number of ordinary shares in issue

12,211,163

12,211,163

12,211,163


Basic earnings per share (EPS) - pence

13.80

15.90

37.70






There are no dilutive potential ordinary shares and, therefore, the calculation of diluted earnings per share is the same as for basic earnings per share.

 



 

4.

Cash and cash equivalents




31 March

30 September


2017

2016

2016


£'000

£'000

£'000

Cash at bank and in hand

20,708

15,494

15,470

Cash and cash equivalents

20,708

15,494

15,470





UK sterling

8,343

4,839

9,840

UAE Dirhams

12,365

10,655

5,630


20,708

15,494

15,470

 

In addition to the above UAE Dirhams amounting to £264,000 (31 March 2016: £2,968,000 and 30 September 2016: £3,280,000) were held on deposit as security in respect of outstanding performance bonds - see note 8 Contingent liabilities.

 

5.

Trade and other receivables




31 March

2017

31 March

2016

30 September

2016


£'000

£'000

£'000

Trade receivables

10,906

5,782

11,106

Other receivables

221

196

258

Prepayments and accrued income

1,060

1,304

1,134


12,187

7,282

12,498

 

6.

Trade and other payables


31 March

2017

31 March

2016

30 September

2016


£'000

£'000

£'000

Trade payables

1,077

312

580


Other payables

1,196

884

2,126

Other taxation and social security

3

3

3

Accruals and deferred income

2,484

2,259

2,483


4,760

3,458

5,192

 

7.

Reconciliation of profit before taxation to net cash generated from operations



Six months ended

Year ended



31 March

30 September



2017

2016

2016


£'000

£'000

£'000





Profit for the period before taxation

1,685

1,942

4,603

Depreciation and impairment

-

-

-

Finance costs

68

178

294

Finance income

(4)

(7)

(21)

(Increase) / decrease in inventories

-

(85)

-

Decrease / (increase) in debtors

855

(283)

(4,766)

(Decrease) / increase in creditors

(793)

665

2,041

Cash generated from operations

1,811

2,410

2,151

 



 

8.

Contingent liabilities



Approximate maximum potential liability



31 March

30 September



2017

2016

2016


Performance bond of AED14,461,000 related to a UAE based contract, released in full during the period.

 

-

 

2,739

 

3,000







Performance bond of AED11,459,000 related to a UAE based contract, expected to reduce to AED5,730,000 in 2017 and to be released in full in 2020, secured by a cash deposit of AED1,146,000

 

 

 

2,500

 

 

 

2,170

 

 

 

2,400







Performance bond of AED636,000 related to a UAE based contract, expected to be released in full in 2017, secured by a cash deposit of AED64,000

 

 

140

 

 

120

 

 

130




The cash deposits referred to above are the same deposits as those referred to in note 4 Cash and cash equivalents.

 

 

 

 

 

Enquiries:

AssetCo plc

Tudor Davies, Chairman

Tel: +44 (0) 7785 703523

or    +44 (0) 20 7614 5900

Arden Partners plc

Nominated adviser and broker

John Llewellyn-Lloyd/Ciaran Walsh

Tel: +44 (0) 20 7614 5900

TooleyStreet Communications

IR and media relations

Fiona Tooley

Mobile: +44 (0) 7785 703 523

fiona@tooleystreet.com


 

 


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