Assetco Regulatory News (ASTO)

Date: Friday, 28 March 2014

Immediate Release

Enquiries:

AssetCo plc

Tudor Davies, Chairman

Arden Partners plc

Richard Day/ James Felix

TooleyStreet Communications

Fiona Tooley

Tel: +44 (0) 7785 703523 or+44 (0) 20 7614 5900

Tel:+44 (0) 20 7614 5900

Mobile: +44 (0) 7785 703 523

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: £34.50m

AssetCo plc

Consolidated Income Statement

for the year to 30 September 2013

Year to 30 September

2013

2012

2012

Note

Continuing

Continuing

Discontinued

£'000

£'000

£'000

Revenue

17,647

15,923

19,802

Cost of sales

(13,714)

(10,927)

(11,794)

Gross profit

3,933

4,996

8,008

Administrative expenses

(2,195)

(1,618)

(5,284)

Operating profit

1,738

3,378

2,724

Profit from disposal of businesses

4

-

-

81,788

Finance income

47

51

19

Finance costs

(526)

(492)

(2,841)

Loss on fair value of financial instruments

-

-

(303)

Profit before tax

1,259

2,937

81,387

Income tax credit

-

1,096

-

Profit for the period

1,259

4,033

81,387

Discontinued operations

Profit for the period from discontinued operations

-

81,387

Profit for the period

1,259

85,420

Earnings per share (EPS):

Restated

-Basic - pence

Continuing operations

5

11.44

36.66

Discontinued operations

5

-

739.83

-Diluted - pence

Continuing operations

5

10.13

*35.54

Discontinued operations

5

-

*717.16

\* The prior year diluted earnings per share has been restated. Further detail is provided in note 5 to these preliminary results.

AssetCo plc

Consolidated Statement of Comprehensive Income

for the year to 30 September 2013

Year to 30 September

2013

2012

£'000

£'000

Recognised profit for the period

1,259

85,420

Other comprehensive income:

Exchange differences on translating foreign operations

(231)

11

Actuarial losses on defined benefit pensions plan

-

(1,288)

Other comprehensive income, net of tax

(231)

(1,277)

Total comprehensive income for the period

1,028

84,143

AssetCo plc

Consolidated Statement of Financial Position

As at 30 September 2013

30 September 2013

30 September 2012

£'000

£'000

Assets

Non-current assets

Property, plant and equipment

54

74

Cash held in respect of a bond

2,489

2,042

Total non-current assets

2,543

2,116

Current assets

Inventories

29

377

Trade and other receivables

4,515

5,838

Cash and cash equivalents (excluding bank overdrafts)

4,134

5,266

Cash held in respect of bond

2,489

2,042

Total current assets

11,167

13,523

Total assets

13,710

15,639

Shareholders' equity

Share capital

25,353

25,353

Share premium

62,645

62,645

Foreign currency translation reserve

(113)

118

Profit and loss account

(77,976)

(79,235)

Total equity

9,909

8,881

Liabilities

Current liabilities

Trade and other payables

3,801

6,758

Total current liabilities

3,801

6,758

Total liabilities

3,801

6,758

Total equity and liabilities

13,710

15,639

AssetCo plc

Consolidated Statement of Changes in Equity

for the year to 30 September 2013

Share

capital

Reserve acquisition reserve

Foreign currency translation reserve

Profit

and loss reserve

Share premium

Total equity

£'000

£'000

£'000

£'000

£'000

£'000

Balance at 30 September 2011

25,353

(12,644)

107

(150,723)

62,645

(75,262)

Profit for the year

-

-

-

85,420

-

85,420

Other comprehensive income:

Exchange differences on translation

Actuarial losses on defined benefit pensions

Reserve acquisition reserve transfer

-

-

-

-

-

12,644

11

-

-

-

(1,288)

(12,644)

-

-

-

11

(1,288)

-

Total comprehensive income for the year

-

12,644

11

71,488

-

84,143

Balance at 30 September 2012

25,353

-

118

(79,235)

62,645

8,881

Profit for the year

-

-

-

1,259

-

1,259

Other comprehensive income:

Exchange differences on translation

-

-

(231)

-

-

(231)

Total comprehensive income for the year

-

-

(231)

1,259

-

1,028

Balance at 30 September 2013

25,353

-

(113)

(77,976)

62,645

9,909

AssetCo plc

Consolidated Statement of Cash Flows

for the year to 30 September 2013

Year to 30 September

2013

2012

Note

£'000

£'000

Cash flows from operating activities

Cash used in operations

6

(849)

(2,842)

Cash deposited in respect of a performance bond

(894)

-

Interest paid

(526)

(3,316)

Income taxes received

1,096

-

Net cash outflows from operating activities

(1,173)

(6,158)

Cash flows from investing activities

Finance income

47

70

Purchase of property, plant and equipment

(6)

(167)

Sale of property, plant and equipment

-

138

Net cash generated in investing activities

41

41

Cash flows from financing activities

Issue of shares (net of costs)

-

8,041

Repayments of amounts borrowed

-

(379)

Finance lease repayments

-

(612)

Net cash generated in financing activities

-

7,050

Net change in cash and cash equivalents

(1,132)

933

Cash, cash equivalents and bank overdrafts at the beginning of the period

5,266

4,377

Cash disposed of with businesses

-

(44)

Cash, cash equivalents and bank overdrafts at the end of the period

7

4,134

5,266

AssetCo plc

Notes to the Financial Statements

for the year to 30 September 2013

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. As at period end, the Company has no trading subsidiaries and therefore the principal activities of the Group are restricted to those of the Company detailed above.

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 Group operates from one site in UAE. AssetCo plc shares are listed on the Alternative Investment Market ("AIM") of the London Stock Exchange.

The financial statements have been presented in Sterling to the nearest thousand pounds (£'000) except where otherwise indicated.

These Group consolidated financial statements were authorised for issue by the Board of Directors on 28 March 2014.

2.

Basis of preparation

The Preliminary results for the period to 30 September 2013, which do not form the statutory accounts of the Group, are an abridged statement of the full Annual Report and Financial Statements, have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union, and those parts of the Companies Act 2006 applicable to companies reporting under IFRS.

The Preliminary results have been prepared on a going concern basis.

The principal accounting policies are included in the Group financial statements and have been applied consistently in both periods presented.

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 Group's geographical settlement. No secondary segmental information has been provided as in the view of the Directors, the Group operates in only one segment, being the provision of management and resources to fire and emergency services. A number of operations were discontinued in the 2012 financial year and these are disclosed separately. The Directors consider the chief operating decision maker is the Board.

Unallocated comprised the head office.

Analysis of revenue and results by geographical settlement

Year to 30 September 2013

UAE

£'000

Unallocated

£'000

Continuing operations

£'000

Revenue

Revenue to external customers

17,582

65

17,647

Inter-segment revenue

-

-

-

Total revenue

17,582

65

17,647

Result

Segmental result (EBITDA)

2,504

(740)

1,764

Depreciation

(26)

-

(26)

Operating profit

2,478

(740)

1,738

Finance income

36

11

47

Finance costs

(526)

-

(526)

Profit for the year

1,988

(729)

1,259

Asset and liabilities

Total segment assets

11,765

1,945

13,710

Total segment liabilities

(6,020)

2,219

(3,801)

Total net assets

5,745

4,164

9,909

Other segment information

Total capital expenditure

6

-

6

Segment result represents EBITDA.

Revenues of approximately £17.025m are derived from a single customer within the UAE segment. The amounts provided to the Board with respect to net assets are measured in a manner consistent with that of the financial statements. The Group is domiciled in the UK and also operates a branch in UAE. Revenue by destination is not materially different from revenue by origin shown above. All revenue relates to services.

3.

Segmental reporting….continued

Analysis of revenue and results by geographical settlement

Year to 30 September 2012

UAE

£'000

Unallocated

£'000

Continuing

operations

£'000

Discontinued

Operations

£'000

Revenue

Revenue to external customers

15,078

-

15,078

19,802

Inter-segment revenue

-

845

845

-

Total revenue

15,078

845

15,923

19,802

Result

Segmental result (EBITDA)

3,266

138

3,404

5,708

Depreciation

(26)

-

(26)

(2,917)

Amortisation and impairment of intangible assets

-

-

-

(67)

Operating profit

3,240

138

3,378

2,724

Profit on disposal of businesses

-

-

-

81,788

Finance income

36

15

51

19

Finance costs

(492)

-

(492)

(2,841)

Loss on fair value of financial instrument

-

-

-

(303)

Profit before tax

2,784

153

2,937

81,387

Income tax

-

1,096

1,096

-

Profit for the year

2,784

1,249

4,033

81,387

Asset and liabilities

Total segment assets

9,950

5,689

15,639

-

Total segment liabilities

(6,126)

(632)

(6,758)

-

Total net assets

3,824

5,057

8,881

-

Other segment information

Total capital expenditure

-

-

-

167

Segmental result represents EBITDA.

Revenues of approximately £18.900m are derived from a single external customer within the discontinued segment and revenues of approximately £14.618m are derived from a single customer within the UAE segment. The amounts provided to the Board with respect to net assets are measured in a manner consistent with that of the financial statements. The Group is domiciled in the UK and also operates a branch in UAE. Revenue by destination is not materially different from revenue by origin shown above. All revenue relates to services.

4.

Discontinued operations

During the year to 30 September 2012 the Group discontinued all of its UK based businesses and realised a profit on disposal of £81.8m, being the aggregate net liabilities of those businesses discontinued. Further information in this regard is contained within the 2012 Annual Report and Accounts.

5.

Earnings per share

a)

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.

Year to 30 September

2013

£'000

2012

£'000

Profit for the period

1,259

85,420

Weighted average number of shares in issue

11,000,713

11,000,713

Basic profit per share (EPS) - pence - continuing

11.44

36.66

Basic profit per share (EPS) - pence - discontinued

-

739.83

Basic profit per share (EPS) - pence

11.44

776.49

b)

Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of all dilutive potential ordinary shares. Dilutive potential ordinary shares comprise warrants. A calculation is made to determine the number of shares that could have been acquired at fair value based on monetary value of the subscription rights attached to outstanding warrants, the warrants were exercisable up until 31 December 2013 at a price of £2.00 each warrant. The number of shares calculated as above is compared with the number of shares that would have been issued assuming the exercise of the warrants. As at 30 September 2013 there were 3,500,000 warrants which could have been convertible at £2.00 each (2012: 3,500,000).

Year to 30 September

2013

£'000

2012

£'000

Profit for the period

1,259

85,420

Weighted average number of shares in issue

12,431,238

11,348,554

*Restated

Diluted profit per share (EPS) - pence- continuing

10.13

35.54

Diluted profit per share (EPS) - pence-discontinued

-

717.16

Diluted profit per share (EPS) - pence

10.13

752.70

*Diluted profit per share in the prior year has been restated to reflect the impact of share warrants within the weighted average number of shares in issue.

Refer below to Post Balance sheet events for disclosure as to the number of warrants referred to above that were exercised and an illustration as to the impact on Earnings per share.

6.

Reconciliation of profit before tax to net cash used from operations

Year to 30 September

2013

2012

£'000

£'000

Profit for the year before tax

1,259

84,324

Depreciation and impairment

26

2,943

Amortisation and impairment

-

67

Profit on sale of property, plant and equipment

-

(138)

Profit on disposal of businesses

-

(81,788)

Interest rate swaps

-

303

Other finance expense

-

17

Interest expense

526

3,316

Interest received

(47)

(70)

Other non-cash movements

-

181

Decrease / (increase) in inventories

348

(290)

Decrease / (increase) in debtors

227

(2,731)

Decrease in creditors

(3,188)

(7,913)

Decrease in provisions

-

(724)

Contributions to the DB pension scheme in excess of service cost

-

(339)

Cash used from operations

(849)

(2,842)

30 September

7.

Analysis of net cash:

2013

2012

Cash at bank and in hand

(4,134)

(5,266)

(4,134)

(5,266)

There was cash of £4.134m as at 30 September 2013 (2012: £5.266m) and cash held in respect of a bond of £4.978m

(2012: £4.084m).

8.

Contingent liabilities

During the period to 30 September 2011 the Group entered into a Performance Bond relating to a UAE based contract that would determine a potential liability of 10% of the total contract value upon failure to fulfil all terms of the contract. This liability initially equated to a maximum of approximately £4m but has subsequently been increased to a maximum of approximately £5m as a result of a contract extension. The Bond will remain in place in full until 90 days after the customer has confirmed that all contractual terms have been met and it is expected that the confirmation will occur in the second half of the financial year ending 30 September 2014. At completion of the 90 day period the potential liability under this Bond will reduce to 5% of the contract value and then reduce to 0% upon expiration of associated warranty periods and this is expected to be in approximately April 2017.

The Group also provides an "Advanced Payment Guarantee" in connection to a UAE based contract. The guarantee provides for the repayment in part or full of payments received from the customer in advance of contractual service delivery. The guarantee was originally for approximately £8m but has been released down to a maximum liability of approximately £1m and this is expected to be released in full in the second half of the financial year ending 30 September 2014.

9.

Post Balance sheet events

On 3 January 2014, AssetCo announced that various shareholders had exercised warrants to subscribe for 1,210,450 new ordinary shares of 10p each at a price of 200 pence per share. The warrants were pursuant to a warrant instrument dated 9 September 2011, granted at the time of the refinancing as notified by a circular issued to shareholders of the same date.

Following the issue of the new ordinary shares of the Company's enlarged issued share capital comprises 12,211,163 shares.

As a result of the above, and expiration of the deadline for exercising warrants outstanding, being 31 December 2013, there are no further warrant instruments outstanding that may be exercised.

Earnings per share for the 2013 financial year calculated using the enlarged share capital would have been as follows:

Year to

30 September 2013

£'000

Profit for the period

1,259

Weighted average number of ordinary shares in issue

12,211,163

Basic profit per share (EPS) - pence

10.31

Diluted profit per share (EPS) - pence

10.31

On the 17 December 2013, AssetCo announced the sudden and untimely passing on Friday 13 December 2013 of Executive Director, Gareth White, a member of the PLC Board since April 2012.

10.

Annual General Meeting

The AGM is to be held at 11.30am on Friday 20 June 2014 at Harwood Capital, 6 Stratton Street, London, W1J 8LD. A Notice convening the Annual General Meeting will be posted to shareholders in due course.

11.

Electronic communications

This Preliminary Announcement is available on the Company's website www.assetco.com. News updates, Regulatory news, & Financial statements, can be viewed and downloaded from the Group'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. The Company is not proposing to bulk print and distribute hard copies of the Annual Financial Report for the year to 30 September 2013 unless specifically requested by individual shareholders; it can be downloaded from the Company's website.