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AssetCo PLC (ASTO)

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Thursday 27 February, 2020

AssetCo PLC

Preliminary results - year ended 30 September 2019

RNS Number : 2640E
AssetCo PLC
27 February 2020
 

 

Thursday, 27 February 2020

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 2019

 

Statement by the Chairman, Tudor Davies

 

Trading results

The results for the year to 30 September 2019 reflect the loss, as previously announced in the final quarter of 2018, of the Abu Dhabi contract and consequently show sharply reduced revenues of £5.3m (2018:£22.9m) and a loss after taxation of £0.8m (2018: profit £1.4m).

The net assets at 30 September 2019 were £29.9m (2018: £30.0m), with a strong liquidity position represented by cash balances of £17.1m (2018: £16.8m), and cash held in respect of bonds of £3.5m (2018: £2.1m).

Since the year end the receipt of the outstanding trade receivables of £11.1m has significantly improved the company's cash balances and we expect the cash position to improve further during the course of this year as we recover additional bonds. 

During the year the headcount was reduced from 229 to 5.  The remaining staff are senior Fire Service and administration staff who have been dealing with the receivables, bonds, and tendering for new business.  There are a number of opportunities we are pursuing which may take several months to realise and we shall keep shareholders informed of any material developments as and when they come to fruition.

Claim against Grant Thornton

The claim for negligence against AssetCo Plc's former auditors, Grant Thornton, culminated in a trial in June 2018, for which a judgment in AssetCo's favour was handed down.  The damages awarded were £22.4m plus interest of approximately £6.5m plus £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.  An appeal by Grant Thornton was lodged and later heard by the Court of Appeal at the end of January 2020 and the Court of Appeal's decision is expected to be handed down before the summer of 2020.

Outlook

We shall keep shareholders informed on any material developments regarding future business and the litigation against Grant Thornton.

 

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

 

Tooley Street 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 : £44.4m

 

 

AssetCo plc

Income Statement

for the year ended 30 September 2019

 

 

 

 

Year ended

Year ended

 

 

30 September

30 September

 

 

2019

2018

 

Notes

£000

£000

 

 

 

 

Revenue

 

5,345

22,888

Cost of sales

 

(4,237)

(16,645)

 

 

----

----

Gross profit

 

1,108

6,243

Administrative expenses

 

(1,810)

(4,746)

 

 

----

----

Operating (loss)/profit

 

(702)

1,497

Finance income

 

9

5

Finance costs

 

(70)

(83)

 

 

----

----

(Loss)/Profit before tax

 

(763)

1,419

Income tax expense

 

-

-

 

 

----

----

(Loss)/Profit for the year

 

(763)

1,419

 

 

 

 

 

 

(Loss)/Earnings per share

 

 

 

Basic - pence

4

(6.25)

11.62

Diluted - pence

4

(6.25)

11.62

 

 

AssetCo plc

Statement of Comprehensive Income

for the year ended 30 September 2019

 

 

 

 

Year ended

Year ended

 

 

30 September

30 September

 

 

2019

2018

 

 

£000

£000

 

 

 

 

(Loss)/Profit for the year

 

(763)

1,419

 

 

 

 

Other comprehensive income

 

 

 

Exchange differences on translating foreign operations

 

648

760

 

 

----

----

Other comprehensive income, net of tax

 

648

760

 

 

----

----

Total comprehensive (loss)/income for the year

 

(115)

2,179

 

 

 

 

 

 

 

 

AssetCo plc

Statement of Financial Position

As at 30 September 2019

 

 

 

 

At

At

 

 

30 September

30 September

 

 

2019

2018

 

Notes

£000

£000

Assets

 

 

 

Non-current assets

 

 

 

Property, plant and equipment

 

-

26

Cash held in respect of bonds

 

-

1,199

 

 

----

----

Total non-current assets

 

-

1,225

 

 

----

----

Current assets

 

 

 

 

 

 

 

Trade and other receivables

 

11,222

15,997

Cash and cash equivalents

5

17,101

16,800

Cash held in respect of bonds

 

3,487

941

 

 

----

----

Total current assets

 

31,810

33,738

 

 

----

----

Total assets

 

31,810

34,963

 

 

 

 

 

 

Liabilities

 

 

 

Current liabilities

 

 

 

Trade and other payables

 

1,955

4,993

 

 

----

----

Total current liabilities

 

1,955

4,993

 

 

----

----

Total liabilities

 

1,955

4,993

 

 

----

----

 

 

 

 

Shareholders' equity

 

 

 

Share capital

 

25,474

25,474

Share premium

 

64,941

64,941

Profit and loss account

 

(60,560)

(60,445)

 

 

----

----

Total equity

 

29,855

29,970

 

 

----

----

Total equity and liabilities

 

31,810

34,963

 

 

             

 

 

AssetCo plc

Statement of Changes in Equity

for the year ended 30 September 2019

 

 

 

 

 

Profit

 

 

Share

Share

and loss

Total

 

capital

premium

account

Equity

 

£000

£000

£000

£000

 

 

 

 

 

Balance at 1 October 2017

25,474

64,941

(62,624)

27,791

Profit for the year

-

-

1,419

1,419

Other comprehensive income:

 

 

 

 

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

Loss for the year

-

-

(763)

(763)

Other comprehensive income:

 

 

 

 

Exchange differences on translation

-

-

648

648

 

----

----

----

----

Total comprehensive loss for the year

-

-

(115)

(115)

 

----

----

----

----

Balance at 30 September 2019

25,474

64,941

(60,560)

29,855

 

 

 

AssetCo plc

Statement of Cash Flows

for the year ended 30 September 2019

 

 

 

Year ended

Year ended

 

 

30 September

30 September

 

 

2019

2018

 

Notes

£000

£000

 

 

 

 

Cash flows from operating activities

 

 

 

Cash inflow/(outflow) from operations

6

1,709

(3,453)

Cash deposited in respect of bonds

 

(2,470)

(3,631)

Cash released in respect of bonds

 

1,123

2,028

Finance costs

 

(70)

(83)

 

 

----

----

Net cash inflow/(outflow) from operating activities

 

292

(5,139)

 

 

----

----

Cash flows from investing activities

 

 

 

Finance income

 

9

5

Purchases of property, plant and equipment

 

-

(26)

 

 

----

----

Net cash inflow/(outflow) from investing activities

 

9

(21)

 

 

----

----

Net change in cash and cash equivalents

 

301

(5,160)

Cash and cash equivalents at beginning of year

 

16,800

21,530

Exchange differences on translation

 

-

430

 

 

----

----

Cash and cash equivalents at end of year

 

17,101

16,800

 

 

 

 

AssetCo plc

Notes to the Financial Statements

for the year ended 30 September 2019

 

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 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 26 February 2020.

 

2.

Basis of preparation

 

The financial information for the years ended 30 September 2019 and 2018 contained in this document does not constitute statutory accounts as defined in section 435 of the Companies Act 2006.  The financial information for the years ended 30 September 2019 and 2018 has been extracted from the consolidated financial statements of AssetCo plc for the year ended 30 September 2019 which have been approved by the directors on 26 February 2020 and will be delivered to the Registrar of Companies in due course.  The auditor's report on those financial statements was unqualified and did not contain a statement under section 498 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 2019.

 

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 2019

 

 

UAE

£000

 

Unallocated

£000

Continuing

Operations

£000

 

Revenue

 

 

 

 

Revenue to external customers

5,345

-

5,345

 

 

----

----

----

 

Total revenue

5,345

-

5,345

 

 

 

Segment result

 

 

 

 

Operating profit/(loss)

296

(998)

(702)

 

Finance income

-

9

9

 

Finance costs

(70)

-

(70)

 

 

----

----

----

 

Loss before tax

226

(989)

(763)

 

Income tax

-

-

-

 

 

----

----

----

 

Loss for the year

226

(989)

(763)

 

 

 

Segment assets and liabilities

 

 

 

 

Total assets

15,572

16,238

31,810

 

Total liabilities

(1,665)

(290)

(1,955)

 

 

----

----

----

 

Total net assets

13,907

15,948

29,855

 

 

 

Other segment information

 

 

 

 

Total capital expenditure

-

-

-

 

 

 

 

 

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

 

 

 

Operating profit/(loss)

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

 

 

 

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.   There was no dilutive impact in either period therefore diluted earnings per share is equal to basic (loss)/earnings per share.

 

 

2019

2018

 

 

£000

£000

 

 

 

 

 

(Loss)/Profit for the year

(763)

1,419

 

 

----

----

 

Weighted average number of ordinary shares in issue

12,211,163

12,211,163

 

Basic and diluted (loss)/earnings per share - pence

(6.25)

11.62

 

 

 

5.

Analysis of net cash

 

 

 

2019

2018

 

£000

£000

 

 

 

Cash at bank and in hand

17,101

16,800

 

----

----

Cash and cash equivalents

17,101

16,800

 

 

  In addition to the above UAE dirhams amounting to £3,487,000 (2018: £2,140,000) were held on deposit as security in respect of outstanding performance and warranty bonds.

 

6.

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

 

 

2019

2018

 

£000

£000

 

 

 

(Loss)/Profit for the year before taxation

(763)

1,419

Depreciation and amortisation

26

-

Finance costs

70

83

Finance income

(9)

(5)

Decrease /(increase) in receivables

5,670

(5,085)

(Decrease)/increase in payables

(3,285)

135

 

----

----

Cash inflow/(outflow) from operations

1,709

(3,453)

 

 

7.

  Contingent liabilities

 

 

Approximate maximum liability

at 30 September

 

2019

2018

 

£000

£000

 

 

 

Warranty bond related to a UAE based contract, expected to be released in full in 2020

1,270

1,200

 

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

-

1,050

 

 

 

 

 

 

 

Performance bond related to a UAE based contract, expected to be released in full in 2020

1,100

-

 

 

 

 

 

 

 

Performance bond related to a UAE based contract, expected to be released in full in 2020

1,100

-

 

 

 

 

 

 

 

 

 

8.

Post balance sheet events

 

Grant Thornton's appeal against the judgement handed down against them on 31 January 2018 was heard at the Court of Appeal on 20 to 22 January 2020.  The outcome of this hearing is expected before the summer of 2020.  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 2019 unless specifically requested by individual shareholders; it can be downloaded from the company's website.

 


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