Assetco Regulatory News (ASTO)

Issued on behalf of AssetCo plc

Date: Friday 29 June 2012

Immediate Release

AssetCo plc

("AssetCo" or the "Company")

Results for the six-month period ended 31 March 2012

Statement by the Chairman, Tudor Davies

Introduction

This six-month financial period being reported upon follows on from the successful restructuring programme completed on 29 September 2011; this provided the basis for the Parent company AssetCo plc to be 'ring-fenced' from the rest of the Group. This has allowed the new team to focus on the successful outsourced Fire and Rescue operations in Middle East, thus moving away from the historic UK vehicle leasing and maintenance contracts which have consumed tens of millions of shareholder funds in recent years and been the principal reason for the significant decline in shareholder value.

Results

The results of the Parent company, AssetCo plc reflect the trading performance of the Company's contract for outsourced Fire and Rescue services in the United Arab Emirates ('UAE'), and for the six months ended 31 March 2012 Revenues were £5.52m; Operating profits £0.50m and profits after interest and taxation of £0.47m. The completion of the receipt of funds from shareholders as part of the financial restructuring increased net cash at Bank and in hand from £1.69m at 30 September 2011 to £5.2m at 31 March 2012, and net assets are £5.6m.

The Consolidated results which in the six -month period under review includes the trading of the UK businesses, shows Revenues of £18.17m; an Operating profit of £1.04m, before financing costs of £1.03m. As a consequence of a non cash one off gain of £5.2m resulting from the liquidation of various subsidiaries (as disclosed in note 4), the profit after tax for the period was £5.22m.

The change in accounting reference date to 30 September has resulted in the comparative six months results being those produced for the first half ended 30 September 2010 by previous management. These comparative interim results were prepared on bases different from the final audited numbers for the eighteen month period ended 30 September 2011 produced by new management.

Trading

The trading in the UAE has been satisfactory and in line with the contract and management expectations; the funds as part of the restructuring programme last September have been deployed in the UAE to replace capital that had previously been withdrawn.

As we explained a few months ago, the UK vehicle leasing and maintenance contracts appeared to be based on a flawed business model and finance structure, sustained by successive injections of shareholder funds raised without any reasonable prospect of shareholder value. On this basis, and because the contracts involve public services, the strategy was to continue to hold these businesses for the benefit of the customers and the Banks without any further allocation of capital, with a view in due course, to either refinancing or a disposal. Since then, Lincolnshire County Council decided to take the contract in-house, and currently, we are continuing to work with the Banks and London Fire Brigade on the remaining vehicle leasing and maintenance contract to arrive at a mutually satisfactory outcome.

Outlook

The restructuring implemented last year has provided the platform to focus on renewing the existing and successful contract in the UAE, whilst also pursuing other opportunities with our partners in the region.

We will keep shareholders updated as appropriate throughout the year.

29 June 2012

Company Profit and Loss Account for the

six month period ended 31 March 2012

All activities relate to continuing operations.

There is no difference between the profit on ordinary activities before taxation and the profits for the financial period stated above, and their historical cost equivalent.

There are no gains or losses other than the profit of £468,000, with the exception of the foreign exchange differences on translation of £15,000, attributable to the shareholders for the period ended 31 March 2012 (2011: profit of £82,355,000) and therefore no separate statement of total recognised gains and losses has been presented.

Company Balance SheetAs at 31 March 2012

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 UAE and its strategy is to develop this business. 

On the 29 September 2011 a share placing totalling £14,000,000 and a creditor scheme of arrangement were approved, whereby effectively all known and unknown liabilities were settled for a total consideration of £5,000,000 and the Company became ring fenced from all UK subsidiaries.

It is also the ultimate holding company for various UK domiciled subsidiaries, including AssetCo London Limited and AssetCo Engineering Limited who operate under a PFI contract to provide and maintain fire and rescue equipment for the London Fire Brigade.

2. Basis of preparation

The separate financial statements of the Company are presented as required by the Companies Act 2006. They have been prepared on a going concern basis, under the historical cost convention and in accordance with applicable United Kingdom Accounting Standards and law.

On the 9 September 2011, the Company announced a change in its accounting reference date from 31 March to 30 September.

3. Subsequent events

Post balance sheet events are disclosed in note 7 to the consolidated financial statements.

Consolidated Income Statement

for the six month period ended 31 March 2012

Consolidated Statement of Comprehensive Income

for the six month period ended 31 March 2012

Consolidated Statement of Financial Position

As at 31 March 2012

Consolidated Statement of Changes in Equity

for the six month period ended 31 March 2012

Consolidated Statement of Cash Flows

for the six month period ended 31 March 2012

1. Legal status and activities

AssetCo plc and its subsidiaries (together "the Group") are principally involved with the provision of management services, the provision of asset management services and the supply of specialist equipment to the emergency services market.

AssetCo plc is a public limited liability company incorporated and domiciled in England and Wales. The address of its Registered office is 800 Field End Road, South Ruislip, Middlesex HA4 0QH. The Group operates from two sites throughout the United Kingdom, one in the Republic of Ireland, and one in UAE.

AssetCo plc shares are listed on the Alternative Investment Market ("AIM") of the London Stock Exchange.

On 9 September 2011 the Group announced a change in its accounting reference date from 31 March to 30 September.

2. Basis of preparation

The financial information in the half-yearly 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 2012 and are unchanged from those disclosed in the Annual report and consolidated financial statements for the year ended 30 September 2011.

The financial information for the six months ended 31 March 2012 and the six months ended 30 September 2010 is unaudited and does not constitute the Group's statutory financial statements for those periods. In addition, since the publication of the half-yearly results for the six months ended 30 September 2010 the Group has undertaken a substantial restatement of its financial statements for the twelve months ended 31 March 2010; further details are contained within the Annual report and consolidated financial statements for the year ended 30 September 2011. The comparative financial information for the full year ended 30 September 2011 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-yearly report have been computed in accordance with IFRSs applicable to interim periods, this half-yearly report does not contain sufficient information to constitute an interim financial report as that term is defined in IAS 34.

3. Restatement note

During 2011, AssetCo identified omissions from, and misstatements in, the entity's financial statements for one or more prior periods arising from a failure to use, or misuse of, reliable information that:

a) was available when financial statements for those periods were authorised for issue; and

b) could reasonably be expected to have been obtained and taken into account in the preparation of those financial statements.

Accounting standards define such errors include the effects of mathematical mistakes, mistakes in applying accounting policies, oversights or misinterpretations of facts, and fraud.

The Group therefore restated the 2009 and 2010 Balance Sheets, 2010 Income Statement and 2010 Cash Flow Statement to reflect the relevant adjustments as explained in the 2011 Annual Report and Accounts which have been filed with Companies House.

4. Planned Restructuring - Profit on Disposal of Businesses

On 1 March 2012, AssetCo Fire & Rescue Limited, a non trading Holding Company, entered Liquidation. Accordingly, as of this date, AssetCo Fire & Rescue Limited and its remaining subsidiaries, a number of dormant and legacy companies, have been excluded from the Consolidated financial statements for the AssetCo Group. The exclusion of associated liabilities with no recourse to the remaining AssetCo Group companies has resulted in a Profit on Disposal of Subsidiaries of £5,215,000. 

5. Property, plant and equipment

The net book value of assets held under finance leases amounts to £20,543,000 (2011 :£23,290,000, 2010: restated £26,801,000).

Assets under long-term arrangements

Assets under long-term arrangements comprise principally of items of operational equipment and motor vehicles that have been provided to customers under the Group's Private Finance Initiative and Public Private Partnership long-term contracts.

Depreciation

Depreciation and impairment expense of £2,856,000 (2011: £11,760,000, 2010: restated £7,617,000) has been charged in cost of sales and £89,000 (2011: £351,000 2010: restated £700,000) in administrative expenses.

Security

Leasehold land and buildings with a carrying amount of £nil (2011: £nil, 2010: £1,041,000) have been pledged to secure borrowings of the Group under a mortgage. The Group is not permitted to pledge these assets as security for other borrowings or to sell them to another entity.

In addition, the Group's obligations under finance leases are secured by the lessors' title to the leased assets, which have a carrying amount of £nil (2011: £nil, 2010: £2,047,000).

Assets under long-term arrangements include a net book value of £20,543,000 (2011: £23,290,000, 2010: restated £26,801,000) in respect of assets secured by the lessor. 

6. Reconciliation of profit / (loss) before tax to net cash generated from operations

Analysis of net debt