Half-year Report- six months ended 31 March 2019

RNS Number : 8181C
AssetCo PLC
20 June 2019
 

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.

 

Thursday, 20 June 2019

Immediate Release

 

AssetCo plc

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

("AssetCo" or the "Company")

 

2019 Half-year Report

for the six months ended 31 March 2019

 

 

Chairman's statement

These results show a Profit after taxation for the six months ended 31 March 2019 of £0.4m (2018: £0.5m) on Revenue of £5.2m (2018: £11.2m) with the net assets at 31 March 2019 totalling £30.2m.  The reduced revenue results from the cessation of our Fire Services to the Abu Dhabi government which, as already announced, ended on 17 December 2018.

The liquidity position remains strong with Cash and cash equivalents of £18.3m, and this position is expected to improve as, although we have ongoing costs in relation to our remaining staff in Abu Dhabi and legal costs associated with the Grant Thornton appeal, we have Cash held in respect of Bonds of £3.3m, Trade and other Receivables of £10.7m, and Trade and other payables of just £2.1m.

On cessation of the Fire Services contract, our headcount in Abu Dhabi was immediately reduced from 242 by the transfer of 229 employees to the new operations and since then we have successively reduced the headcount to five.  The remaining staff are senior fire service and administration staff who are currently involved in tendering for new business in the UAE, providing consultancy and dealing with the outstanding bonds and receivables.

We are encouraged by the opportunities that have arisen and have been involved in work proposals across several sectors; however, at this stage it is too early to assess the timing and potential from these sources.

Claim against Grant Thornton

The claim for negligence against AssetCo's former auditors, Grant Thornton, culminated in a trial in June 2018, for which a Judgment in AssetCo's favour was handed down.  Since then permission to appeal was refused by the Trial Judge, but as announced on 31 May 2019, Grant Thornton have now successfully applied to the Court of Appeal for permission to appeal and the appeal will be heard by the Court of Appeal towards the end of January 2020.

 

AssetCo were awarded damages of £22.4m plus interest of approximately £6.5m and £5m on account of costs.  On 29 March 2019, Grant Thornton paid £34.3m into Court on which interest is accruing at the rate of 8% per annum and the release of which is dependent upon the outcome of the appeal listed towards the end of January 2020.

Outlook

We shall keep shareholders informed of any developments regarding Grant Thornton's appeal and on the further development and opportunities we have with our business in UAE.

 

Tudor Davies

Chairman

20 June 2019

 

 

AssetCo plc

Income statement

for the six months ended 31 March 2019

 

 

 

Six months ended

Year ended

 

Note

31 March

2019

31 March

2018

30 September

2018

 

 

£'000

£'000

£'000

 

 

 

 

 

Revenue

 

5,210

Cost of sales

 

(4,165)

(8,215)

(16,645)

Gross profit

 

1,045

Administrative expenses

 

(660)

(2,440)

(4,746)

Operating profit

 

385

Finance income

 

2

Finance costs

 

(25)

(35)

(83)

Profit before taxation

 

362

Income tax expense

 

-

Profit for the period

 

362

 

 

 

 

 

 

Earnings per share (EPS):

3

 

Basic - pence

 

2.96

Diluted - pence

 

2.96

 

 

 

AssetCo plc

Statement of comprehensive income

for the six months ended 31 March 2019

 

 

 

Six months ended

Year ended

 

 

31 March

2019

31 March

2018

30 September

2018

 

 

£'000

£'000

£'000

 

 

 

 

 

Recognised profit for the period

 

362

464

1,419

 

 

 

Other comprehensive (expense) / income:

 

 

Exchange differences on translating foreign operations

 

(146)

(767)

Other comprehensive (expense) / income net of tax

 

(146)

(767)

 

 

 

Total comprehensive (expense) / income for the period

 

216

(303)

2,179

 

 

AssetCo plc

Statement of financial position

as at 31 March 2019

 

 

 

At 31 March

At 30 September

 

 

2019

2018

2018

 

Note

£'000

£'000

£'000

Assets

 

 

 

 

Non-current assets

 

 

 

 

Property, plant and equipment

 

16

Cash held in respect of a bond

 

-

Total non-current assets

 

16

 

 

 

Current assets

 

 

Inventories

 

-

Trade and other receivables

4

10,692

Cash and cash equivalents

5

18,257

Cash held in respect of bonds

 

3,290

Total current assets

 

32,239

 

 

 

Total assets

 

32,255

 

 

 

Shareholders' equity

 

 

Share capital

 

25,474

Share premium

 

64,941

Profit and loss account

 

(60,229)

(62,927)

(60,445)

Total equity

 

30,186

 

 

 

Liabilities

 

 

Current liabilities

 

 

Trade and other payables

6

2,069

Total current liabilities

 

2,069

Total liabilities

 

2,069

Total equity and liabilities

 

32,255

 

 

AssetCo plc

Statement of changes in equity

for the six months ended 31 March 2019

 

 

Share

Capital

Share premium

Profit and loss reserve

Total

equity

 

£'000

£'000

£'000

£'000

 

 

 

 

 

Balance at 30 September 2017

25,474

64,941

(62,624)

27,791

Profit for the period

-

-

464

Other comprehensive income:

 

 

 

 

Exchange differences on translation

-

-

(767)

(767)

Total comprehensive income for the period

-

-

(303)

(303)

 

 

 

 

 

Balance at 31 March 2018

25,474

64,941

(62,927)

27,488

 

 

 

 

 

Profit for the period

-

-

955

Other comprehensive expense:

 

 

 

Exchange differences on translation

-

-

1,527

Total comprehensive income for the period

-

-

2,482

 

 

 

 

 

Balance at 30 September 2018

25,474

64,941

(60,445)

29,970

 

 

 

 

 

Profit for the period

-

-

362

362

Other comprehensive income:

Exchange differences on translation

 

-

 

-

 

(146)

 

(146)

Total comprehensive income for the period

-

-

216

216

 

 

 

 

 

Balance as at 31 March 2019

25,474

64,941

(60,229)

30,186

 

 

AssetCo plc

Statement of cash flows

for the six months ended 31 March 2019

 

 

Six months ended

Year ended

 

31 March

2019

31 March

2018

30 September

2018

 

Note

£'000

£'000

£'000

 

 

 

 

 

Cash flows from operating activities

 

 

 

 

Cash generated from/(used by) operations

7

2,630

(3,453)

Cash deposited in respect of performance bonds

 

(1,150)

(3,631)

Cash released in respect of performance bonds

 

-

Finance costs

 

(25)

(35)

(83)

Net cash generated from/(used by) operating activities

 

1,455

(5,139)

 

 

 

Cash flows from investing activities

 

 

Finance income

 

2

Purchases of property, plant and equipment

 

-

Net cash generated from investing activities

 

2

 

 

 

Net change in cash and cash equivalents

 

1,457

(5,160)

Cash and cash equivalents at the beginning of the period

 

16,800

Exchange differences on translation

 

-

Cash and cash equivalents at the end of the period

 

18,257

 

 

AssetCo plc

Notes to the Financial Statements

for the six months ended 31 March 2019

 

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 announced on 16 October 2018, the Company received, on 15 October 2018, notice of termination of its contract in the UAE.  The contract terminated on 17 December 2018.  Since termination, the company has been tendering for new business, providing consultancy and dealing with the outstanding bonds and receivables.

 

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.  As at period end, the Company had no subsidiaries.

 

AssetCo plc shares are listed on the Alternative Investment Market ("AIM") of the London Stock Exchange (AiM: symbol ASTO.L).

 

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 Group expects to apply in its financial statements for the year ending 30 September 2019 and, except as set out below, are unchanged from those disclosed in the Annual Report and Financial Statements for the year ended 30 September 2018.

IFRS 9 'Financial Instruments' (effective 1 January 2018) introduces a new model for the classification and measurement of financial assets, a new expected credit loss model for the impairment of financial assets held at amortised cost, and new requirements for hedge accounting.  There are also a number of new disclosure requirements.  The adoption of IFRS 9 has not had a material impact on the company's results or financial position, but is expected to result in further disclosures in the Report and Accounts for the year ended 30 September 2019.

IFRS 15 'Revenue from Contracts with Customers (effective 1 January 2018) introduces a new five step model for the recognition of revenue, which is based on the satisfaction of performance obligations.  The core principle is that an entity will recognise revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services.  The adoption of IFRS 15 has not had a material impact on the company's results or financial position, but is expected to result in further disclosures in the Report and Accounts for the year ended 30 September 2019.

The financial information for the six months ended 31 March 2019 and the six months ended 31 March 2018 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 2018 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

2019

31 March

2018

30 September

2018

 

£'000

£'000

 

 

Profit for the year

362

464

1,419

 

Weighted average number of ordinary shares in issue

12,211,163

12,211,163

12,211,163

 

Basic earnings per share (EPS) - pence

2.96

3.80

11.62

 

 

 

 

 

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.

Trade and other receivables

 

 

 

31 March

2019

31 March

2018

30 September

2018

 

£'000

£'000

£'000

Trade receivables

-

103

-

Other receivables

119

325

166

Prepayments and accrued income

10,573

12,010

15,831

 

10,692

12,438

15,997

 

5.

Cash and cash equivalents

 

 

 

31 March

30 September

 

2019

2018

2018

 

£'000

£'000

£'000

Cash at bank and in hand

18,257

19,554

16,800

Cash and cash equivalents

18,257

19,554

16,800

 

 

 

 

UK sterling

3,957

4,534

5,120

UAE Dirhams

14,300

15,020

11,680

 

18,257

19,554

16,800

 

In addition to the above UAE Dirhams amounting to £3,290,000 (31 March 2018: £320,000 and 30 September 2018: £2,140,000) were held on deposit as security in respect of outstanding performance bonds - see note 8 Contingent liabilities.

6.

Trade and other payables

 

31 March

2019

31 March

2018

30 September

2018

 

£'000

£'000

£'000

Trade payables

225

690

1,003

 

Other payables

149

1,439

1,618

Other taxation and social security

3

2

3

Accruals and deferred income

1,692

2,693

2,369

 

2,069

4,824

4,993

 

7.

Reconciliation of profit before taxation to net cash (used by) / generated from operations

 

 

Six months ended

Year ended

 

 

31 March

30 September

 

 

2019

2018

2018

 

£'000

£'000

£'000

 

 

 

 

Profit for the period before taxation

362

464

1,419

Depreciation

10

-

-

Finance costs

25

35

83

Finance income

(2)

(3)

(5)

Decrease/(increase) in receivables

5,305

(2,327)

(5,085)

(Decrease)/increase in payables

(3,070)

229

135

Cash generated from/(used by) operations

2,630

(1,602)

(3,453)

 

8.

Contingent liabilities

 

 

Approximate maximum potential liability

 

 

31 March

30 September

 

 

2019

2018

2018

 

Warranty bond related to a UAE based contract, expected to be released in full in 2020 (31 March 2018: Performance bond related to the same UAE based contract)

 

 

 

1,200

 

 

 

2,225

 

 

 

1,200

 

 

 

 

 

 

Performance bond related to a UAE based contract, released in full during 2018

 

-

 

100

 

-

 

 

 

 

 

 

Performance bond related to a UAE based contract, expected to be released in full during 2019

 

1,050

 

-

 

1,050

 

 

 

 

 

 

Performance bond related to a UAE based contract, expected to be released in full during 2019

 

1,050

 

-

 

-

 

9.

Electronic communications

 

The Company is not proposing to bulk print and distribute hard copies of this Half-year Report unless specifically requested by individual shareholders; it can be downloaded from the Company's website at www.assetco.com .

News updates, regulatory news, & financial statements can be viewed and downloaded from the Company's website, www.assetco.com.  Copies can also be requested, in writing to, The Company Secretary, AssetCo plc, Singleton Court Business Park, Wonastow Road, Monmouth, Monmouthshire NP25 5JA.

 

 

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

Equity Sales: John Peat

Tel: +44 (0) 20 7614 5900

 

TooleyStreet Communications

IR and media relations

Fiona Tooley

Mobile: +44 (0) 7785 703523

Email: fiona@tooleystreet.com

 

 


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