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Share Name Share Symbol Market Type Share ISIN Share Description
Assetco Plc LSE:ASTO London Ordinary Share GB00B42VYZ16 ORD 10P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  +5.00p +1.67% 305.00p 290.00p 320.00p 305.00p 305.00p 305.00p 0 08:00:00
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Support Services 22.9 1.4 11.6 26.2 4.00

AssetCo PLC Preliminary results - year ended 30 September 2018

18/03/2019 7:00am

UK Regulatory (RNS & others)


TIDMASTO

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 GBP1.4m (2017: GBP2.2m) on revenue of GBP22.9m (2017; GBP24.9m) 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 GBP16.8m (2017; GBP21.5m).

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 GBP22.4m plus an associated interest payment of approximately GBP6m and GBP5m 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                  Arden Partners plc        TooleyStreet Communications 
  Tudor Davies, Chairman       Nominated adviser and     Fiona Tooley 
  Tel: +44 (0) 7785 703523     broker                    Email: fiona@tooleystreet.com 
  +44 (0) 20 7614 5900         John Llewellyn-Lloyd/     Mobile: +44 (0) 7785 
                               Ciaran Walsh              703523 
                               Tel: +44 (0) 20 7614 
                               5900 
 
   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: GBP45.3m 
 
 
              AssetCo plc 
            Income Statement 
  for the year ended 30 September 2018 
 
 
                                      Year ended     Year ended 
                                    30 September   30 September 
                                            2018           2017 
                            Notes         GBP000         GBP000 
 
 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 
                                                       GBP000         GBP000 
 
 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         GBP000              GBP000 
 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 
                                         GBP000    GBP000     GBP000   GBP000 
 
 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         GBP000         GBP000 
 
 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 (GBP'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 
                                                                      Continuing 
                                                UAE    Unallocated    Operations 
                                             GBP000         GBP000        GBP000 
        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 
                                                                            Continuing 
                                                UAE    Unallocated          Operations 
                                             GBP000         GBP000              GBP000 
        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 
                                                                  GBP000        GBP000 
 
  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 
                                    GBP000   GBP000 
 
  Cash at bank and in hand          16,800   21,530 
                                      ----     ---- 
  Cash and cash equivalents         16,800   21,530 
 
 

In addition to the above GBP2,140,000 (2016: GBP335,000) 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 
                                                             GBP000    GBP000 
 
  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 
                                                                GBP000      GBP000 
 
        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,        1,050           - 
         expected to be released in full in 2019 
 
 
 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 GBP21 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 GBP22.4 million, plus interest 
       of approximately GBP6 million plus GBP5 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 rns@lseg.com or visit www.rns.com.

END

FR UBUSRKVAOAAR

(END) Dow Jones Newswires

March 18, 2019 03:00 ET (07:00 GMT)

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