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AssetCo PLC (ASTO)

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Monday 18 March, 2019

AssetCo PLC

Preliminary results - year ended 30 September 2018

RNS Number : 0936T
AssetCo PLC
18 March 2019
 

 

Monday, 18 March 2019

Immediate Release

 

AssetCo plc

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

 

("AssetCo" or the "company")

Preliminary results for the year ended 30 September 2018

 

Statement by the Chairman, Tudor Davies

 

Introduction

We are pleased to report the results for the year ended 30 September 2018 and the encouraging progress with our claim for professional negligence against our former auditors Grant Thornton.  The case was decided in our favour; however, it is now subject to an application by Grant Thornton for permission to appeal to the Court of Appeal.

Trading results

Profit after taxation for the year ended 30 September 2018 was £1.4m (2017: £2.2m) on revenue of £22.9m (2017; £24.9m) with profitability being adversely impacted by the reduced revenues and an increase in the litigation costs incurred in our claim for negligence against Grant Thornton, which was heard in the High Court during June 2018.

The cash position remains strong with free cash balances of £16.8m (2017; £21.5m).

Our business in Abu Dhabi which, since commencement in April 2010, has been based on the provision of an outsourced fire services for the Presidential Special Guard; this ended on 17 December 2018 when our services were combined with the existing outsourced arrangements controlled by the Fire Battalion on behalf of the whole of the Abu Dhabi Military.

We are currently in discussions with the Presidential Special Guard and with other potential clients in UAE to provide training and other fire related services.

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 awarding the company damages of £22.4m plus an associated interest payment of approximately £6m and £5m on account of costs incurred.

On 21 February 2019 Grant Thornton's applications to the Trial Judge Mr Justice Bryan for permission to appeal, and their counterclaim and application for relief under Section 1157 of the Companies Act 2006 were all dismissed.  Grant Thornton was ordered to pay the amounts due to AssetCo into Court, and these monies shall be released to AssetCo either upon the refusal of an application to the Court of Appeal or upon the dismissal of the appeal by the Court of Appeal.

On 15 March 2019, Grant Thornton served notice that they will apply to the Court of Appeal for permission to appeal against the judgement.  AssetCo will oppose the application, but there is no fixed deadline for determination of the application.

Outlook

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

 

Enquiries:

AssetCo plc

Tudor Davies, Chairman

Tel: +44 (0) 7785 703523

        +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

Fiona Tooley

Email: [email protected]

Mobile: +44 (0) 7785 703523

 

AssetCo is principally involved in the provision of management and resources to the fire and emergency services in the Middle East. 

For further details, visit the website, www.assetco.com

Ticker: AIM: ASTO.L

Market cap: £45.3m

 

 

AssetCo plc

Income Statement

for the year ended 30 September 2018

 

 



Year ended

Year ended



30 September

30 September



2018

2017


Notes

£000

£000





Revenue


22,888

24,881

Cost of sales


(16,645)

(17,738)



----

----

Gross profit


6,243

7,143

Administrative expenses


(4,746)

(4,891)



----

----

Operating profit


1,497

2,252

Finance income


5

8

Finance costs


(83)

(87)



----

----

Profit before tax


1,419

2,173

Income tax expense


-

-



----

----

Profit for the year


1,419

2,173



▬▬▬▬

▬▬▬▬





Earnings per share




Basic - pence

4

11.62

17.80

Diluted - pence

4

11.62

17.80

 

 

AssetCo plc

Statement of Comprehensive Income

for the year ended 30 September 2018

 

 



Year ended

Year ended



30 September

30 September



2018

2017



£000

£000





Recognised profit for the year


1,419

2,173





Other comprehensive income/(expense)




Exchange differences on translating foreign operations


760

(438)



----

----

Other comprehensive income/(expense), net of tax


760

(438)



----

----

Total comprehensive income for the year


2,179

1,735



▬▬▬▬

▬▬▬▬





 

AssetCo plc

Statement of Financial Position

As at 30 September 2018

 

 



At

At



30 September

30 September



2018

2017


Notes

£000

£000

Assets




Non-current assets




Property, plant and equipment


26

-

Cash held in respect of bonds


1,199

233



----

----

Total non-current assets


1,225

233



----

----

Current assets




Inventories


-

-

Trade and other receivables


15,997

10,685

Cash and cash equivalents

5

16,800

21,530

Cash held in respect of bonds


941

102



----

----

Total current assets


33,738

32,317



----

----

Total assets


34,963

32,550



▬▬▬▬

▬▬▬▬





Liabilities




Current liabilities




Trade and other payables


4,993

4,759



----

----

Total current liabilities


4,993

4,759



----

----

Total liabilities


4,993

4,759



----

----





Shareholders' equity




Share capital


25,474

25,474

Share premium


64,941

64,941

Profit and loss account


(60,445)

(62,624)



----

----

Total equity


29,970

27,791



----

----

Total equity and liabilities


34,963

32,550



▬▬▬▬

▬▬▬▬

 

The financial statements were authorised for issue by the board of directors on 16 March 2019 and were signed on its behalf by the chairman, Tudor Davies.

 

 

AssetCo plc

Statement of Changes in Equity

for the year ended 30 September 2018

 

 




Profit



Share

Share

and loss

Total


capital

premium

account

Equity


£000

£000

£000

£000






Balance at 30 September 2016

25,474

64,941

(64,359)

26,056

Profit for the year

-

-

2,173

2,173

Other comprehensive income:





Exchange differences on translation

-

-

(438)

(438)


----

----

----

----

Total comprehensive income for the year

-

-

1,735

1,735


----

----

----

----

Balance at 30 September 2017

25,474

64,941

(62,624)

27,791

Profit for the year

-

-

1,419

1,419

Other comprehensive expense:





Exchange differences on translation

-

-

760

760


----

----

----

----

Total comprehensive income for the year

-

-

2,179

2,179


----

----

----

----

Balance at 30 September 2018

25,474

64,941

(60,445)

29,970


▬▬▬▬

▬▬▬▬

▬▬▬▬

▬▬▬▬

 

 

AssetCo plc

Statement of Cash Flows

for the year ended 30 September 2018

 



Year ended

Year ended



30 September

30 September



2018

2017


Notes

£000

£000





Cash flows from operating activities




Cash (outflow)/inflow from operations

6

(3,453)

3,094

Cash deposited in respect of bonds


(3,631)

(104)

Cash released in respect of bonds


2,028

3,246

Finance costs


(83)

(87)



----

----

Net cash (outflow)/inflow from operating activities


(5,139)

6,149



----

----

Cash flows from investing activities




Finance income


5

8

Purchases of property, plant and equipment


(26)

-



----

----

Net cash (outflow)/inflow from investing activities


(21)

8



----

----

Net change in cash and cash equivalents


(5,160)

6,157

Cash and cash equivalents at beginning of year


21,530

15,470

Exchange differences on translation


430

(97)



----

----

Cash and cash equivalents at end of year


16,800

21,530



▬▬▬▬

▬▬▬▬

 

 

AssetCo plc

Notes to the Financial Statements

for the year ended 30 September 2018

 

1.

Legal status and activities


AssetCo plc ("AssetCo or the "company") 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.  As at period end, the company has no subsidiaries.  AssetCo plc shares are listed on the Alternative Investment Market ("AIM") of the London Stock Exchange.

 

AssetCo 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 is to continue the development of this business into new markets in the Middle East following the end of the contract with the Abu Dhabi government on 17 December 2018.

 

This preliminary announcement has been presented in sterling to the nearest thousand pounds (£'000) except where otherwise indicated, as are the financial statements, which were authorised for issue by the board of directors on 16 March 2019.

 

2.

Basis of preparation


The financial information included in the preliminary announcement for year to 30 September 2018 has been audited and an unqualified audit report has been issued.  The preliminary financial statements represent extracts from those audited accounts but do not constitute statutory accounts within the meaning of Section 434 of the Companies Act 2006.

 

The Group's financial statements have been prepared in accordance with IFRS as adopted by the European Union, IFRIC interpretations and the Companies Act 2006 applicable to companies reporting under IFRS, under the historical cost convention. The same accounting policies, presentation and methods of computation are followed in the preliminary financial statements as were applied in the Group's financial statements for the year ended 30 September 2018.

 

3.

Segmental reporting


The core principle of IFRS 8 'Operating Segments' is to require an entity to disclose information that enables users of the financial statements to evaluate the nature and financial effects of the business activities in which the entity engages and the economic environments in which it operates.  Segmental information is therefore presented in respect of the company's geographical settlement.  No secondary segmental information has been provided as, in the view of the directors, the company operates in only one segment, being the provision of management and resources to fire and emergency services.  The directors consider the chief operating decision maker is the board.

 

The amounts provided to the board with respect to net assets are measured in a manner consistent with that of the financial statements.  The company is domiciled in the UK and operates a branch in the UAE.  Revenue by destination is not materially different from revenue by origin shown above.  All revenue relates to services.  Unallocated comprises the head office.

 

Analysis of revenue and results by geographical settlement

Year ended 30 September 2018


 

UAE

£000

 

Unallocated

£000

Continuing

Operations

£000

 

Revenue




 

Revenue to external customers

22,888

-

22,888

 


----

----

----

 

Total revenue

22,888

-

22,888

 


▬▬▬▬

▬▬▬▬

▬▬▬▬

 

Segment result




 

EBITDA and operating profit

5,624

(4,127)

1,497

 

Finance income

-

5

5

 

Finance costs

(83)

-

(83)

 


----

----

----

 

Profit before tax

5,541

(4,122)

1,419

 

Income tax

-

-

-

 


----

----

----

 

Profit for the year

5,541

(4,122)

1,419

 


▬▬▬▬

▬▬▬▬

▬▬▬▬

 

Segment assets and liabilities




 

Total assets

27,597

7,366

34,963

 

Total liabilities

(3,995)

(998)

(4,993)

 


----

----

----

 

Total net assets

23,602

6,368

29,970

 


▬▬▬▬

▬▬▬▬

▬▬▬▬

 

Other segment information




 

Total capital expenditure

26

-

26

 


▬▬▬▬

▬▬▬▬

▬▬▬▬

 

 

 

Year ended 30 September 2017

 


 

UAE

£000

 

Unallocated

£000

Continuing

Operations

£000

 

Revenue




 

Revenue to external customers

24,881

-

24,881

 


----

----

----

 

Total revenue

24,881

-

24,881

 


▬▬▬▬

▬▬▬▬

▬▬▬▬

 

Segment result




 

EBITDA and operating profit

6,450

(4,198)

2,252

 

Finance income

-

8

8

 

Finance costs

(87)

-

(87)

 


----

----

----

 

Profit before tax

6,363

(4,190)

2,173

 

Income tax

-

-

-

 


----

----

----

 

Profit for the year

6,363

(4,190)

2,173

 


▬▬▬▬

▬▬▬▬

▬▬▬▬

 

Segment assets and liabilities




 

Total assets

18,669

13,881

32,550

 

Total liabilities

(3,348)

(1,411)

(4,759)

 


----

----

----

 

Total net assets

15,321

12,470

27,791

 


▬▬▬▬

▬▬▬▬

▬▬▬▬

 

Other segment information




 

Total capital expenditure

-

-

-

 


▬▬▬▬

▬▬▬▬

▬▬▬▬

 

 

4.

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.



2018

2017



£000

£000






Profit for the year

1,419

2,173



----

----


Weighted average number of ordinary shares in issue

12,211,163

12,211,163


Basic and diluted earnings per share - pence

11.62

17.80



 

5.

Analysis of net cash




2018

2017


£000

£000




Cash at bank and in hand

16,800

21,530


----

----

Cash and cash equivalents

16,800

21,530


▬▬▬▬

▬▬▬▬

 

In addition to the above £2,140,000 (2016: £335,000) was held on deposit as security in respect of outstanding performance bonds.

 

6.

Reconciliation of profit before tax to cash (outflow)/inflow from operations



2018

2017


£000

£000




Profit for the year before taxation

1,419

2,173

Finance costs

83

87

Finance income

(5)

(8)

(Increase)/decrease in receivables

(5,085)

1,191

Increase/(decrease) in payables

135

(349)


----

----

Cash (outflow)/inflow from operations

(3,453)

3,094


▬▬▬▬

▬▬▬▬

 

7.

   Contingent liabilities



Approximate maximum liability

at 30 September


2018

2017


£000

£000




Warranty bond related to a UAE based contract, expected to be released in full in 2020 (2017: Performance bond related to the same UAE based contract)

 

1,200

 

2,400


----

----

Performance bond related to a UAE based contract, released in full in December 2017

-

105


----

----

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

1,050

-


▬▬▬▬

▬▬▬▬

 

8.

Post balance sheet events


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.

 

On 31 January 2019, the company also announced that, in a judgment which was handed down that morning in AssetCo's case against Grant Thornton LLP ("GT"), AssetCo was awarded damages of approximately £21 million before an additional amount for interest on the damages and costs of the litigation.

 

At a further hearing on 21 February 2019, GT's application for permission to appeal were dismissed, as was their counterclaim and application for relief under Section 1157 of the Companies Act 2006.  Grant Thornton was ordered to pay into Court a sum of £22.4 million, plus interest of approximately £6 million plus £5 million on account of AssetCo's costs, on which interest will accrue at the judgment rate of 8% per annum.  AssetCo was also awarded its costs of the action to be assessed by the Court if not agreed.  The amounts paid into Court shall be released to AssetCo upon the refusal of Grant Thornton's application for permission to appeal by the Court of Appeal, or if permission is granted, upon the dismissal of the appeal by the Court of Appeal.

 

There are no other post balance sheet events.

 

9.

Annual general meeting


A notice convening the annual general meeting will be posted to shareholders in due course.

 

10.

Electronic communications


This Preliminary Announcement is available on the company's website www.assetco.com .  News updates, regulatory news and financial statements can be viewed and downloaded from the company's website, www.assetco.com .  Copies can also be requested, in writing, from The Company Secretary, AssetCo plc, Singleton Court Business Park, Wonastow Road, Monmouth, Monmouthshire NP25 5JA.  The company is not proposing to bulk print and distribute hard copies of the Annual Report and Financial Statements for the year ended 30 September 2018 unless specifically requested by individual shareholders; it can be downloaded from the company's website.

 


This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact [email protected] or visit www.rns.com.
 
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