Last checked at 13 Jun 2017 07:00
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.
Providers of management and resources to the fire and emergency services in the Middle East
Date: Tuesday, 13 June 2017 | Immediate Release |
AssetCo plc
("AssetCo" or the "Company")
2017 Half-year Report
for the six months ended 31 March 2017
Introduction
We are pleased to report the results for the six-month period ended 31 March 2017.
Results
The Income Statement for the six months shows an Operating Profit of £1.7m (2016; £2.1m) on Revenue of £13.3m (2016; £11.0m) and a Profit before and after Taxation of £1.7m (2016; £1.9m). Revenue increased principally due to the weakness of sterling versus the United Arab Emirates Dirham in which currency our Revenue is received, however profits reduced because of an increase in the costs of litigation against Grant Thornton.
Free cash (i.e. excluding cash balances held in respect of performance bonds) increased by £5.2m during the period to £20.7m (30 September 2016; £15.5m), partly due to £3.2m cash released in respect of a performance bond. In addition to free cash, there are restricted cash balances held in respect of performance bonds amounting to £0.3m (30 September 2016; £3.3m).
UAE Contract
Our business is based on the provision of an outsourced fire service to the Abu Dhabi government, a contract we have held for the past seven years and which was expected to be extended for a year until November 2017. We have continued to supply these services satisfactorily on the same basis and on similar terms. AssetCo has now received a contract for the first five months from 17 November 2016 to 17 April 2017, which facilitates payment for that period; it is also proposed that the contract then rolls forward on similar terms and payment on the same basis.
Claim against Grant Thornton
The Financial Reporting Council (FRC) concluded their investigations relating to the financial years ended 2009 and 2010 which are the focus of our claim for negligence against AssetCo plc's former auditors, Grant Thornton.
A press release from the FRC reported that Grant Thornton have admitted that their failings arose because of significant and widespread lack of professional competence and due care in the performance of their audits. Grant Thornton were fined £3.5m and received a severe reprimand, and the audit partner Mr Robert Napper was fined £200,000 and excluded from membership of the Institute of Chartered Accountants for three years. The full report by the FRC entitled Facts and Acts of Misconduct: Grant Thornton UK LLP and Mr Napper, is available on the FRC website www.frc.org.uk.
In the meantime, we are continuing our litigation against Grant Thornton where as previously reported we have issued formal Court proceedings, for a sum which with costs and interest is in the region of £40 million, although currently this case is not due to be heard until the summer of 2018.
Outlook
Trading continues to be in line with management's expectations; the Board will keep shareholders updated on any developments within our Abu Dhabi business and that of the Grant Thornton claim.
Tudor Davies, Chairman
AssetCo plc
13 June 2017
AssetCo plc Income Statement for the six months ended 31 March 2017 |
Six months ended | Year ended | |||
Note | 31 March 2017 | 31 March 2016 | 30 September 2016 | |
£'000 | £'000 | £'000 | ||
Revenue | 13,274 | 11,003 | 23,300 | |
Cost of sales | (9,333) | (7,922) | (16,550) | |
Gross profit | 3,941 | 3,081 | 6,750 | |
Administrative expenses | (2,192) | (968) | (1,874) | |
Operating profit | 1,749 | 2,113 | 4,876 | |
Finance income | 4 | 7 | 21 | |
Finance costs | (68) | (178) | (294) | |
Profit before taxation | 1,685 | 1,942 | 4,603 | |
Income tax expense | - | - | - | |
Profit for the period | 1,685 | 1,942 | 4,603 | |
Earnings per share (EPS): | 3 | |||
Basic - pence | 13.80 | 15.90 | 37.70 | |
Diluted - pence | 13.80 | 15.90 | 37.70 | |
AssetCo plc Statement of Comprehensive Income for the six months ended 31 March 2017
| ||||
Six months ended | Year ended | |||
31 March 2017 | 31 March 2016 | 30 September 2016 | ||
£'000 | £'000 | £'000 | ||
Recognised profit for the period | 1,685 | 1,942 | 4,603 | |
Other comprehensive income: | ||||
Exchange differences on translating foreign operations | 658 | 839 | 1,858 | |
Other comprehensive income, net of tax | 658 | 839 | 1,858 | |
Total comprehensive income for the period | 2,343 | 2,781 | 6,461 | |
AssetCo plc Statement of Financial Position as at 31 March 2017 | ||||
At 31 March | At 30 September | |||
2017 | 2016 | 2016 | ||
Notes | £'000 | £'000 | £'000 | |
Assets | ||||
Non-current assets | ||||
Property, plant and equipment | - | - | - | |
Cash held in respect of a bond | 4 | 251 | 2,956 | 240 |
Total non-current assets | 251 | 2,956 | 240 | |
Current assets | ||||
Inventories | - | 90 | - | |
Trade and other receivables | 5 | 12,187 | 7,282 | 12,498 |
Cash and cash equivalents | 4 | 20,708 | 15,494 | 15,470 |
Cash held in respect of a bond | 4 | 13 | 12 | 3,040 |
Total current assets | 32,908 | 22,878 | 31,008 | |
Total assets | 33,159 | 25,834 | 31,248 | |
Shareholders' equity | ||||
Share capital | 25,474 | 25,474 | 25,474 | |
Share premium | 64,941 | 64,941 | 64,941 | |
Profit and loss account | (62,016) | (68,039) | (64,359) | |
Total equity | 28,399 | 22,376 | 26,056 | |
Liabilities | ||||
Current liabilities | ||||
Trade and other payables | 6 | 4,760 | 3,458 | 5,192 |
Total current liabilities | 4,760 | 3,458 | 5,192 | |
Total liabilities | 4,760 | 3,458 | 5,192 | |
Total equity and liabilities | 33,159 | 25,834 | 31,248 | |
AssetCo plc Statement of Changes in Equity for the six months ended 31 March 2017 |
Share Capital | Share premium | Profit and loss reserve | Total equity | |
£'000 | £'000 | £'000 | £'000 | |
Balance at 30 September 2015 | 25,474 | 64,941 | (70,820) | 19,595 |
Profit for the period | - | - | 1,942 | 1,942 |
Other comprehensive income: | ||||
Exchange differences on translation | - | - | 839 | 839 |
Total comprehensive income for the period | - | - | 2,781 | 2,781 |
Balance at 31 March 2016 | 25,474 | 64,941 | (68,039) | 22,376 |
Profit for the period | - | - | 2,661 | 2,661 |
Other comprehensive income: | ||||
Exchange differences on translation | - | - | 1,019 | 1,019 |
Total comprehensive income for the period | - | - | 3,680 | 3,680 |
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 as at 31 March 2017 | 25,474 | 64,941 | (62,016) | 28,399 |
AssetCo plc Statement of Cash Flows for the six months ended 31 March 2017 | ||||
Six months ended | Year ended | |||
31 March 2017 | 31 March 2016 | 30 September 2016 | ||
Note | £'000 | £'000 | £'000 | |
Cash flows from operating activities | ||||
Cash generated from operations | 7 | 1,811 | 2,410 | 2,151 |
Cash released in respect of a performance bond | 3,232 | - | - | |
Finance costs | (68) | (178) | (294) | |
Net cash generated from operating activities | 4,975 | 2,232 | 1,857 | |
Cash flows from investing activities | ||||
Finance income | 4 | 7 | 21 | |
Net cash generated from investing activities | 4 | 7 | 21 | |
Net change in cash and cash equivalents | 4,979 | 2,239 | 1,878 | |
Cash and cash equivalents at the beginning of the period | 15,470 | 12,836 | 12,836 | |
Exchange differences on translation | 259 | 419 | 756 | |
Cash and cash equivalents at the end of the period | 20,708 | 15,494 | 15,470 | |
AssetCo plc Notes to the Financial Statements for the six months ended 31 March 2017 | ||||
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 has 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 | ||||
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 Company expects to apply in its financial statements for the year ending 30 September 2017 and are unchanged from those disclosed in the Annual Report and Financial Statements for the year ended 30 September 2016.
The financial information for the six months ended 31 March 2017 and the six months ended 31 March 2016 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 2016 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 2017 | 31 March 2016 | 30 September 2016 | ||
£'000 | £'000 | £'000 | ||
Profit for the year | 1,685 | 1,942 | 4,603 | |
Weighted average number of ordinary shares in issue | 12,211,163 | 12,211,163 | 12,211,163 | |
Basic earnings per share (EPS) - pence | 13.80 | 15.90 | 37.70 | |
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. | Cash and cash equivalents | |||
31 March | 30 September | |||
2017 | 2016 | 2016 | ||
£'000 | £'000 | £'000 | ||
Cash at bank and in hand | 20,708 | 15,494 | 15,470 | |
Cash and cash equivalents | 20,708 | 15,494 | 15,470 | |
UK sterling | 8,343 | 4,839 | 9,840 | |
UAE Dirhams | 12,365 | 10,655 | 5,630 | |
20,708 | 15,494 | 15,470 | ||
In addition to the above UAE Dirhams amounting to £264,000 (31 March 2016: £2,968,000 and 30 September 2016: £3,280,000) were held on deposit as security in respect of outstanding performance bonds - see note 8 Contingent liabilities.
5. | Trade and other receivables | |||
31 March 2017 | 31 March 2016 | 30 September 2016 | ||
£'000 | £'000 | £'000 | ||
Trade receivables | 10,906 | 5,782 | 11,106 | |
Other receivables | 221 | 196 | 258 | |
Prepayments and accrued income | 1,060 | 1,304 | 1,134 | |
12,187 | 7,282 | 12,498 | ||
6. | Trade and other payables | |||
31 March 2017 | 31 March 2016 | 30 September 2016 | ||
£'000 | £'000 | £'000 | ||
Trade payables | 1,077 | 312 | 580 | |
Other payables | 1,196 | 884 | 2,126 | |
Other taxation and social security | 3 | 3 | 3 | |
Accruals and deferred income | 2,484 | 2,259 | 2,483 | |
4,760 | 3,458 | 5,192 | ||
7. | Reconciliation of profit before taxation to net cash generated from operations | |||
Six months ended | Year ended | |||
31 March | 30 September | |||
2017 | 2016 | 2016 | ||
£'000 | £'000 | £'000 | ||
Profit for the period before taxation | 1,685 | 1,942 | 4,603 | |
Depreciation and impairment | - | - | - | |
Finance costs | 68 | 178 | 294 | |
Finance income | (4) | (7) | (21) | |
(Increase) / decrease in inventories | - | (85) | - | |
Decrease / (increase) in debtors | 855 | (283) | (4,766) | |
(Decrease) / increase in creditors | (793) | 665 | 2,041 | |
Cash generated from operations | 1,811 | 2,410 | 2,151 | |
8. | Contingent liabilities | |||
Approximate maximum potential liability | ||||
31 March | 30 September | |||
2017 | 2016 | 2016 | ||
Performance bond of AED14,461,000 related to a UAE based contract, released in full during the period. |
- |
2,739 |
3,000 | |
Performance bond of AED11,459,000 related to a UAE based contract, expected to reduce to AED5,730,000 in 2017 and to be released in full in 2020, secured by a cash deposit of AED1,146,000 |
2,500 |
2,170 |
2,400 | |
Performance bond of AED636,000 related to a UAE based contract, expected to be released in full in 2017, secured by a cash deposit of AED64,000 |
140 |
120 |
130 | |
The cash deposits referred to above are the same deposits as those referred to in note 4 Cash and cash equivalents. | ||||
9. | Electronic communications |
The Company is not proposing to bulk print and distribute hard copies of this Half-year Report for the six months ended 31 March 2017 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 Tel: +44 (0) 20 7614 5900 |
TooleyStreet Communications IR and media relations Fiona Tooley Mobile: +44 (0) 7785 703 523 fiona@tooleystreet.com |