ASSETCO PLC — Earnings Release 2015

Mar 24, 2016

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RNS Number : 1849T

AssetCo PLC

24 March 2016

Date: Thursday, 24 March 2016	Immediate Release

AssetCo plc

("AssetCo" or the "Group" or the "Company")

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

Preliminary results for the year to 30 September 2015

Statement by the Chairman, Tudor Davies

Introduction

We are pleased to report continuing progress in the year to 30 September 2015 which reflects increased profit and cash generation.

Results

The Consolidated Income Statement for the period under review shows an Operating profit of £4.4 million (2014: £2.6 million) on Revenue of £21.7 million (2014: £14.6 million) and a Profit before tax of £4.0 million (2014: £2.3 million).  The year on year increase in profits has come from the planned increase in the size of our major Middle East contract due to increases in personnel and related firefighting equipment sales.

Cash Generation

The Company generated £6.9 million of free unrestricted cash during the year with £2.6 million net releases from contract Bonds and, the remaining balance generated from operations.

The cash position at 30 September 2015 is total cash of £15.6 million (2014: £10.8 million) comprising free cash balances of £12.8 million (2014: £5.8 million) and restricted cash balances held in respect of Bonds amounting to £2.8 million (2014: 5.0 million).

Claim against Grant Thornton

The claim against the Company's former auditors Grant Thornton that was originally lodged under the Professional Negligence Pre-action Protocol was the subject of a mediation hearing in October 2015.  Unfortunately as announced on 16 December 2015 the mediation proved to be unsuccessful and the Company issued formal Court proceedings in respect of the negligent audits for the years ended 30 September 2009 and 2010.  The claim for losses amounts to £38 million plus interest and costs to date of approximately £4.3 million making a total claim of £42.3 million.

Outlook

Trading continues to be in line with the current contracts and Management expectations; we will keep shareholders updated of further progress on trading and the claim against Grant Thornton during the course of the year.

Enquiries: AssetCo plc Tudor Davies, Chairman Tel: +44 (0) 7785 703523         +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 Fiona Tooley Email: fiona@tooleystreet.com Mobile: +44 (0) 7785 703523

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: £39.38m

AssetCo plc Consolidated Income Statement for the year to 30 September 2015
		Year to 30 September
		2015	2014
			Continuing
		£'000	£'000
Revenue		21,660	14,634
Cost of sales		(15,564)	(10,865)
Gross profit		6,096	3,769
Administrative expenses		(1,647)	(1,169)
Operating profit		4,449	2,600
Finance income		23	9
Finance costs		(459)	(356)
Profit before tax		4,013	2,253
Income tax		-	-
Profit for the year		4,013	2,253
Earnings per share (EPS):
Basic - pence		32.86	18.92
Diluted -  pence		32.86	18.46

AssetCo plc Consolidated Statement of Comprehensive Income for the year to 30 September 2015
		Year to 30 September
		2015	2014
		£'000	£'000
Recognised profit for the year		4,013	2,253
Other comprehensive income
Exchange differences on translating foreign operations		866	137
Other comprehensive income, net of tax		866	137
Total comprehensive income for the year		4,879	2,390

AssetCo plc Consolidated Statement of Financial Position As at 30 September 2015
		30 September 2015	30 September 2014
		£'000	£'000
Assets
Non-current assets
Property, plant and equipment		-	12
Cash held in respect of a bond		2,802	2,482
Total non-current assets		2,802	2,494
Current assets
Inventories		-	333
Trade and other receivables		6,629	6,220
Cash and cash equivalents		12,836	5,787
Cash held in respect of a bond		11	2,509
Total current assets		19,476	14,849
Total assets		22,278	17,343
Shareholders' equity
Share capital		25,474	25,474
Share premium		64,941	64,941
Foreign currency translation reserve		890	24
Profit and loss account		(71,710)	(75,723)
Total equity		19,595	14,716
Liabilities
Current liabilities
Trade and other payables		2,683	2,627
Total current liabilities		2,683	2,627
Total liabilities		2,683	2,627
Total equity and liabilities		22,278	17,343

The financial statements were authorised for issue by the Board of Directors on 24 March 2016 and were signed on its behalf by TG Davies.

AssetCo plc Consolidated Statement of Changes in Equity for the year to 30 September 2015
	Share capital	Foreign currency translation reserve	Profit and loss reserve	Share premium	Total equity
	£'000	£'000	£'000	£'000	£'000
Balance at 30 September 2013	25,353	(113)	(77,976)	62,645	9,909
Transactions with owners: Issue of shares	121	-	-	2,296	2,417
Transactions with owners for the year	121	-	-	2,296	2,417
Profit for the year Other comprehensive income: Exchange differences on translation	- -	- 137	2,253 -	- -	2,253 137
Total comprehensive income for the year	-	137	2,253	-	2,390
Balance at 30 September 2014	25,474	24	(75,723)	64,941	14,716
Profit for the year Other comprehensive income: Exchange differences on translation	- -	- 866	4,013 -	- -	4,013 866
Total comprehensive income for the year	-	866	4,013	-	4,879
Balance at 30 September 2015	25,474	890	(71,710)	64,941	19,595

AssetCo plc Consolidated Statement of Cash Flows for the year to 30 September 2015
		Year to 30 September
		2015	2014
	Note	£'000	£'000
Cash flows from operating activities
Cash generated from/(used in) operations	5	4,758	(380)
Cash deposited in respect of a performance bond		(223)	(30)
Cash released in respect of a performance bond		2,814	-
Interest paid		(459)	(356)
Net cash generated from/(used in) operating activities		6,890	(766)
Cash flows from investing activities
Finance income		23	9
Net cash generated from investing activities		23	9
Cash flows from financing activities
Issue of shares (net of costs)		-	2,417
Net cash generated from financing activities		-	2,417
Net change in cash and cash equivalents		6,913	1,660
Cash, cash equivalents and bank overdrafts at beginning of year		5,787	4,134
Exchange differences on translation		136	(7)
Cash, cash equivalents and bank overdrafts at end of year	6	12,836	5,787

AssetCo plc Notes to the Financial Statements for the year to 30 September 2015
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. This preliminary announcement has been presented in sterling to the nearest thousand pounds (£'000) except where otherwise indicated, as are the Group consolidated financial statements, which were authorised for issue by the Board of Directors on 24 March 2016.

2.	Basis of preparation
	The preliminary results for the period to 30 September 2015, which do not form the statutory accounts of the Group, are an abridged statement of the full Annual Report and Financial Statements, which 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.  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 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.  Unallocated comprises the head office.

Analysis of revenue and results by geographical settlement
Year to 30 September 2015	UAE £'000	Unallocated £'000	Continuing operations £'000
Revenue
Revenue to external customers	21,660	-	21,660
Total revenue	21,660	-	21,660
Segment result
EBITDA	5,383	(922)	4,461
Depreciation	(12)	-	(12)
Operating profit	5,371	(922)	4,449
Finance income	11	12	23
Finance costs	(459)	-	(459)
Profit for the year	4,923	(910)	4,013
Assets and liabilities
Total segment assets	13,942	8,336	22,278
Total segment liabilities	(2,294)	(389)	(2,683)
Total net assets	11,648	7,947	19,595
Other segment information
Total capital expenditure	-	-	-

Year to 30 September 2014

UAE

£'000

Unallocated

£'000

Continuing operations

£'000

Revenue

Revenue to external customers

14,634

-

14,634

Total revenue

14,634

-

14,634

Segment result

EBITDA

3,224

(602)

2,622

Depreciation

(22)

-

(22)

Operating profit

3,202

(602)

2,600

Finance income

3

6

9

Finance costs

(356)

-

(356)

Profit for the year

2,849

(596)

2,253

Assets and liabilities

Total segment assets

13,483

3,860

17,343

Total segment liabilities

(4,848)

2,221

(2,627)

Total net assets

8,635

6,081

14,716

Other segment information

Total capital expenditure

-

-

-

4.	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
			2015 £'000		2014 £'000
	Profit for the year		4,013		2,253
	Weighted average number of shares in issue		12,211,163		11,908,551
	Basic earnings per share (EPS) - pence		32.86		18.92
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 in issue assuming the exercise of the warrants.  On 3 January 2014 various shareholders exercised warrants to subscribe for 1,210,450 new ordinary shares at 10p each at a price of £2.00 per share. Following the issue of the new ordinary shares the company's enlarged issued share capital comprises 12,211,163 shares. As a result, of expiration of the deadline for exercising warrants outstanding being 31 December 2013, there are no further warrant instruments outstanding that may be exercised.
			Year to 30 September
			2015 £'000		2014 £'000
	Profit for the year		4,013		2,253
	Weighted average number of shares in issue		12,211,163		12,207,993
	Diluted earnings per share (EPS)  - pence		32.86		18.46
5.	Reconciliation of profit before tax to cash generated from/(used in) operations
		Year to 30 September
	2015		2014
	£'000		£'000
Profit for the year before tax	4,013		2,253
Depreciation and impairment	12		22
Loss on sale of property, plant and equipment	-		19
Finance costs	459		356
Finance income	(23)		(9)
Decrease/(increase) in inventories	333		(304)
Decrease/(increase) in debtors	65		(1,720)
Decrease in creditors	(101)		(997)
Cash generated from/(used in) from operations	4,758		(380)

		At 30 September
6.	Analysis of net cash:	2015 £'000	2014 £'000
	Cash at bank and in hand	12,836	5,787
		12,836	5,787
	There was cash of £12,836,000 as at 30 September 2015 (2014: £5,787,000) and cash held in respect of bonds of £2,813,000 (2014: £4,991,000).

7.

Contingent liabilities

	Approximate maximum liability
	2015 £'000	2014 £000
Performance bond related to a UAE contract, expected to be released in full in 2017	2,500	5,000
Advance payment guarantee	-	8,000
Performance bond related to a UAE contract, expected to reduce to approximately £1m in 2017 and to be released in full in 2020	2,000	2,000
Performance bond related to a UAE contract, released in full in March 2015	-	100
Performance bond related to a UAE contract, expected to be released in full in 2017	100	-

8.	Post balance sheet events
	There are no post balance sheet events to report.

9.	Annual General Meeting
	The AGM is to be held at 12.30 p.m. on 17 May 2016 at Harwood Capital, 6 Stratton Street, London, W1J 8LD.  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 to 30 September 2015 unless specifically requested by individual shareholders; it can be downloaded from the Company's website.

This information is provided by RNS

The company news service from the London Stock Exchange

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