REG - AssetCo PLC - Half-year Report- six months ended 31 March 2019

AssetcoAnnouncement

20/06/2019 07:05

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


11,151


22,888




Cost of sales


 


(4,165)


(8,215)


(16,645)




Gross profit


 


1,045


2,936


6,243




Administrative expenses


 


(660)


(2,440)


(4,746)




Operating profit


 


385


496


1,497




Finance income


 


2


3


5




Finance costs


 


(25)


(35)


(83)




Profit before taxation


 


362


464


1,419




Income tax expense


 


-


-


-




Profit for the period


 


362


464


1,419




 


 


 


 


 




 


 


 


 


 




Earnings per share (EPS):


3


 


 


 




Basic - pence


 


2.96


3.80


11.62




Diluted - pence


 


2.96


3.80


11.62




 
 




 
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)


760




Other comprehensive (expense) / income net of tax


 


(146)


(767)


760




 


 


 


 


 




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


-


26




Cash held in respect of a bond


 


-


-


1,199




Total non-current assets


 


16


-


1,225




 


 


 


 


 




Current assets


 


 


 


 




Inventories


 


-


-


-




Trade and other receivables


4


10,692


12,438


15,997




Cash and cash equivalents


5


18,257


19,554


16,800




Cash held in respect of bonds


 


3,290


320


941




Total current assets


 


32,239


32,312


33,738




 


 


 


 


 




Total assets


 


32,255


32,312


34,963




 


 


 


 


 




Shareholders' equity


 


 


 


 




Share capital


 


25,474


25,474


25,474




Share premium


 


64,941


64,941


64,941




Profit and loss account


 


(60,229)


(62,927)


(60,445)




Total equity


 


30,186


27,488


29,970




 


 


 


 


 




Liabilities


 


 


 


 




Current liabilities


 


 


 


 




Trade and other payables


6


2,069


4,824


4,993




Total current liabilities


 


2,069


4,824


4,993




Total liabilities


 


2,069


4,824


4,993




Total equity and liabilities


 


32,255


32,312


34,963




 
 




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


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


955




Other comprehensive expense:


 


 


 


 




Exchange differences on translation


-


-


1,527


1,527




Total comprehensive income for the period


-


-


2,482


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


(1,602)


(3,453)




Cash deposited in respect of performance bonds


 


(1,150)


(97)


(3,631)




Cash released in respect of performance bonds


 


-


102


2,028




Finance costs


 


(25)


(35)


(83)




Net cash generated from/(used by) operating activities


 


1,455


(1,632)


(5,139)




 


 


 


 


 




Cash flows from investing activities


 


 


 


 




Finance income


 


2


3


5




Purchases of property, plant and equipment


 


-


-


(26)




Net cash generated from investing activities


 


2


3


(21)




 


 


 


 


 




Net change in cash and cash equivalents


 


1,457


(1,629)


(5,160)




Cash and cash equivalents at the beginning of the period


 


16,800


21,530


21,530




Exchange differences on translation


 


-


(347)


430




Cash and cash equivalents at the end of the period


 


18,257


19,554


16,800




 
 




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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