Half-year Report - period ended 31 March 2018

RNS Number : 6768S

AssetCo PLC

27 June 2018

 

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.

Wednesday, 27 June 2018

Immediate Release

AssetCo plc

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

("AssetCo" or the "Company")

2018 Half-year Report

for the six months ended 31 March 2018

Chairman's statement

Introduction

We are pleased to report that our trading results for the six month period ended 31 March 2018 have been satisfactory and met with our expectations, whilst the litigation against our former auditors Grant Thornton is ongoing.

Trading Results

The outsourced Fire Services contractual business in Abu Dhabi, UAE for the provision of an outsourced fire service to the Abu Dhabi government (the "Client") continues to be performed to the satisfaction of the Client.  The contract is ongoing and remains on similar terms and conditions that have been set since November 2016, which involves a new contract being re-confirmed every five or six months in arrears.

The operating profit for the period under review amounted to £0.5m (HY2017; £1.7m), which reflects an adverse impact from exchange rate movements of £0.7m compared to HY2017 and a reduction in profitability of £0.5m, arising principally from a reduction in training and logistics revenues.

Our Statement of financial position at the period end shows a strong balance sheet with cash balances of £19.6m (2017; £20.7m).

Litigation

As previously reported, Grant Thornton were fined £3.5m by the Financial Reporting Council in connection with their respective audits of Assetco plc in 2009 and 2010.  We are pursuing a claim against Grant Thornton, as a consequence of their professional negligence, which with interest amounts to approximately £40m; this case is in the process of being heard in the High Court with a decision expected later in this year.

Outlook

Trading continues to be satisfactory and we will continue to keep shareholders informed on the progress of our Middle East business and the progress and developments in relation to the action against Grant Thornton.

Tudor Davies

Chairman

27 June 2018

AssetCo plc Income statement for the six months ended 31 March 2018

		Six months ended		Year ended
	Note	31 March 2018	31 March 2017	30 September 2017
		£'000	£'000	£'000
Revenue		11,151	13,274	24,881
Cost of sales		(8,215)	(9,333)	(17,738)
Gross profit		2,936	3,941	7,143
Administrative expenses		(2,440)	(2,192)	(4,891)
Operating profit		496	1,749	2,252
Finance income		3	4	8
Finance costs		(35)	(68)	(87)
Profit before taxation		464	1,685	2,173
Income tax expense		-	-	-
Profit for the period		464	1,685	2,173
Earnings per share (EPS):	3
Basic - pence		3.80	13.80	17.80
Diluted - pence		3.80	13.80	17.80

AssetCo plc Statement of comprehensive income for the six months ended 31 March 2018

		Six months ended		Year ended
		31 March 2018	31 March 2017	30 September 2017
		£'000	£'000	£'000
Recognised profit for the period		464	1,685	2,173
Other comprehensive (expense) / income:
Exchange differences on translating foreign operations		(767)	658	(438)
Other comprehensive (expense) / income net of tax		(767)	658	(438)
Total comprehensive (expense) / income for the period		(303)	2,343	1,735

AssetCo plc Statement of financial position as at 31 March 2018

		At 31 March		At 30 September
		2018	2017	2017
	Note	£'000	£'000	£'000
Assets
Non-current assets
Property, plant and equipment		-	-	-
Cash held in respect of a bond		-	251	233
Total non-current assets		-	251	233
Current assets
Inventories		-	-	-
Trade and other receivables	4	12,438	12,187	10,685
Cash and cash equivalents	5	19,554	20,708	21,530
Cash held in respect of bonds		320	13	102
Total current assets		32,312	32,908	32,317
Total assets		32,312	33,159	32,550
Shareholders' equity
Share capital		25,474	25,474	25,474
Share premium		64,941	64,941	64,941
Profit and loss account		(62,927)	(62,016)	(62,624)
Total equity		27,488	28,399	27,791
Liabilities
Current liabilities
Trade and other payables	6	4,824	4,760	4,759
Total current liabilities		4,824	4,760	4,759
Total liabilities		4,824	4,760	4,759
Total equity and liabilities		32,312	33,159	32,550

AssetCo plc Statement of changes in equity for the six months ended 31 March 2018

	Share Capital	Share premium	Profit and loss reserve	Total equity
	£'000	£'000	£'000	£'000
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 at 31 March 2017	25,474	64,941	(62,016)	28,399
Profit for the period	-	-	488	488
Other comprehensive expense:
Exchange differences on translation	-	-	(1,096)	(1,096)
Total comprehensive income for the period	-	-	(608)	(608)
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 as at 31 March 2018	25,474	64,941	(62,927)	27,488

AssetCo plc Statement of cash flows for the six months ended 31 March 2018

		Six months ended		Year ended
		31 March 2018	31 March 2017	30 September 2017
	Note	£'000	£'000	£'000
Cash flows from operating activities
Cash (used by) / generated from operations	7	(1,602)	1,811	3,094
Cash deposited in respect of performance bonds		(97)	-	(104)
Cash released in respect of performance bonds		102	3,232	3,246
Finance costs		(35)	(68)	(87)
Net cash (used by) / generated from operating activities		(1,632)	4,975	6,149
Cash flows from investing activities
Finance income		3	4	8
Net cash generated from investing activities		3	4	8
Net change in cash and cash equivalents		(1,629)	4,979	6,157
Cash and cash equivalents at the beginning of the period		21,530	15,470	15,470
Exchange differences on translation		(347)	259	(97)
Cash and cash equivalents at the end of the period		19,554	20,708	21,530

AssetCo plc Notes to the Financial Statements for the six months ended 31 March 2018

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 had 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 (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 2018 and are unchanged from those disclosed in the Annual Report and Financial Statements for the year ended 30 September 2017. The financial information for the six months ended 31 March 2018 and the six months ended 31 March 2017 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 2017 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 2018	31 March 2017	30 September 2017
		£'000	£'000
	Profit for the year	464	1,685	2,173
	Weighted average number of ordinary shares in issue	12,211,163	12,211,163	12,211,163
	Basic earnings per share (EPS) - pence	3.80	13.80	17.80
	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 2018	31 March 2017	30 September 2017
		£'000	£'000	£'000
	Trade receivables	103	10,906	-
	Other receivables	325	221	190
	Prepayments and accrued income	12,010	1,060	10,495
		12,438	12,187	10,685

5.	Cash and cash equivalents
		31 March		30 September
		2018	2017	2017
		£'000	£'000	£'000
	Cash at bank and in hand	19,554	20,708	21,530
	Cash and cash equivalents	19,554	20,708	21,530
	UK sterling	4,534	8,343	6,598
	UAE Dirhams	15,020	12,365	14,932
		19,554	20,708	21,530

In addition to the above UAE Dirhams amounting to £320,000 (31 March 2017: £264,000 and 30 September 2017: £335,000) were held on deposit as security in respect of outstanding performance bonds - see note 8 Contingent liabilities.

6.	Trade and other payables
		31 March 2017	31 March 2017	30 September 2017
		£'000	£'000	£'000
	Trade payables	690	1,077	878
	Other payables	1,439	1,196	1,183
	Other taxation and social security	2	3	3
	Accruals and deferred income	2,693	2,484	2,695
		4,824	4,760	4,759

7.	Reconciliation of profit before taxation to net cash (used by) / generated from operations
		Six months ended		Year ended
		31 March		30 September
		2018	2017	2017
		£'000	£'000	£'000
	Profit for the period before taxation	464	1,685	2,173
	Finance costs	35	68	87
	Finance income	(3)	(4)	(8)
	(Increase) / decrease in receivables	(2,327)	855	1,191
	Increase / (decrease) in payables	229	(793)	(349)
	Cash (used by) / generated from operations	(1,602)	1,811	3,094

8.	Contingent liabilities
		Approximate maximum potential liability
		31 March		30 September
		2018	2017	2017
	Performance bond related to a UAE based contract, expected to reduce to approximately £1.1m in 2018 and to be released in full in 2020	2,225	2,500	2,400
	Performance bond related to a UAE based contract, released in full in 2017	-	140	-
	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 during 2018	100	-	-

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: [phone] or    [phone]

Arden Partners plc Nominated adviser and broker John Llewellyn-Lloyd/Ciaran Walsh Tel: [phone]

TooleyStreet Communications IR and media relations Fiona Tooley Mobile: [phone] Email: [e-mail]

 

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