TIDMASTO
RNS Number : 4281Q
AssetCo PLC
26 February 2021
Friday, 26 February 2021 Immediate Release
AssetCo plc
("AssetCo" or the "company")
Preliminary results for the year ended 30 September 2020
Statement by the Chairman, Tudor Davies
Introduction
We have had a successful year in terms of releasing the cash in
receivables and bonds from our contracts in the Middle East,
however, the development of new business has been slowed by the
Coronavirus pandemic.
Perhaps of more significance to shareholders are the post
balance sheet events, including the successful conclusion of the
Grant Thornton litigation, the buy-back of 50% of the share
capital, and the introduction of new directors and a proposed
change of strategy to asset and wealth management.
Results
In the absence of any revenues from the Middle East, progress
for shareholders this year is better explained in terms of cash
flows, with net cash inflows from operating activities of GBP11.0
million resulting in a balance sheet at 30 September 2020 with net
assets of GBP32.3 million (2019 GBP29.9 million), of which cash was
GBP28.9 million (2019 GBP20.6 million).
The Income Statement for the year ended 30 September 2020 shows
revenue of nil (2019: GBP5.3 million) but a profit for the year of
GBP3.4 million (2019 Loss GBP0.8 million) which principally arose
as a result of an award of GBP4.6 million costs against Grant
Thornton.
Post Balance Sheet Events
On 2 October 2020, Grant Thornton informed us of their decision
not to appeal to the Supreme Court, thus crystallising the award
from the Court of Appeal ruling which, with costs, amounted to
GBP30.5 million, the final amounts of which were all received by 31
January 2021.
On 1 December 2020 we announced a Tender Offer to return capital
to shareholders by way of a buy-back of 6.53 million shares at
GBP4.11 per share at a cost of GBP26.9 million, and this was
subscribed in full and completed in January 2021.
On 8 January 2021 we welcomed an Investor Group consisting of
Martin Gilbert, Peter McKellar and Toscafund Asset Management and
various associates who had acquired a 29.8% shareholding from
existing shareholders. Martin and Peter have significant expertise
in asset and wealth management and joined the Board on 25 January
2021.
In January and February 2021 the company purchased an investment
of 5.85 percent of River and Mercantile Group plc, an asset
management business, at a total cost of GBP10.4 million.
Future Strategy
On 8 February 2021 the Board announced that it intends to change
its business strategy to the development of an asset and wealth
management business building on the significant experience of
Martin Gilbert and Peter McKellar.
As this is a fundamental change of business the Company will
effect a readmission of its shares pursuant to AIM Rule 14.
The Board is in the process of preparing a Circular to
shareholders to complete the readmission process and expects to
post it to shareholders before 31 March 2021.
Enquiries:
AssetCo plc Arden Partners plc Tooley Street 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
Daniel Gee-Summons 703523
Tel: +44 (0) 20 7614
5900
Maitland/AMO
Neil Bennett
Email: info@maitland.co.uk
Tel: +44 (0) 20 7379 5151
For further details, visit the website, www.assetco.com
Ticker: AIM: ASTO.L
Market cap : GBP57.8 m
AssetCo plc
Income Statement
for the year ended 30 September 2020
Year ended Year ended
30 September 30 September
2020 2019
Notes GBP000 GBP000
Revenue - 5,345
Cost of sales - (4,237)
---- ----
Gross profit - 1,108
Other income 4 4,597 -
Administrative expenses (1,192) (1,810)
---- ----
Operating profit/(loss) 3,405 (702)
Finance income 18 9
Finance costs (62) (70)
---- ----
Profit/(loss) before tax 3,361 (763)
Income tax expense - -
---- ----
Profit/(loss) for the year 3,361 (763)
Earnings/(loss) per share
Basic - pence 5 27.52 (6.25)
Diluted - pence 5 27.52 (6.25)
AssetCo plc
Statement of Comprehensive Income
for the year ended 30 September 2020
Year ended Year ended
30 September 30 September
2020 2019
GBP000 GBP000
Profit/(loss) for the year 3,361 (763)
Other comprehensive (expense)/income
Exchange differences on translating foreign
operations (871) 648
---- ----
Other comprehensive (expense)/income,
net of tax (871) 648
---- ----
Total comprehensive profit/(loss) for
the year 2,490 (115)
AssetCo plc
Statement of Financial Position
As at 30 September 2020
At At
30 September 30 September
2020 2019
Notes GBP000 GBP000
Assets
Non-current assets
Property, plant and equipment - -
---- ----
Total non-current assets - -
---- ----
Current assets
Trade and other receivables 4,683 11,222
Cash and cash equivalents 6 27,860 17,101
Cash held in respect of bonds 1,058 3,487
---- ----
Total current assets 33,601 31,810
---- ----
Total assets 33,601 31,810
Liabilities
Current liabilities
Trade and other payables 1,256 1,955
---- ----
Total current liabilities 1,256 1,955
---- ----
Total liabilities 1,256 1,955
---- ----
Shareholders' equity
Share capital 1,221 25,474
Share premium - 64,941
Profit and loss account 31,124 (60,560)
---- ----
Total equity 32,345 29,855
---- ----
Total equity and liabilities 33,601 31,810
AssetCo plc
Statement of Changes in Equity
for the year ended 30 September 2020
Profit
Share Share and loss Total
capital premium account Equity
GBP000 GBP000 GBP000 GBP000
Balance at 1 October 2018 25,474 64,941 (60,445) 29,970
Loss for the year - - (763) (763)
Other comprehensive income:
Exchange differences on translation - - 648 648
---- ---- ---- ----
Total comprehensive loss for the year - - (115) (115)
---- ---- ---- ----
Balance at 30 September 2019 25,474 64,941 (60,560) 29,855
Profit for the year - - 3,361 3,361
Other comprehensive income:
Exchange differences on translation - - (871) (871)
---- ---- ---- ----
Total comprehensive income for the
year - - 2,490 2,490
Capital reduction (24,253) (64,941) 89,194 -
---- ---- ---- ----
Balance at 30 September 2020 1,221 - 31,124 32,345
AssetCo plc
Statement of Cash Flows
for the year ended 30 September 2020
Year ended Year ended
30 September 30 September
2020 2019
Notes GBP000 GBP000
Cash flows from operating activities
Cash inflow from operations 7 8,807 1,709
Cash deposited in respect of bonds - (2,470)
Cash released in respect of bonds 2,270 1,123
Finance costs (62) (70)
---- ----
Net cash inflow from operating activities 11,015 292
---- ----
Cash flows from investing activities
Finance income 18 9
---- ----
Net cash inflow from investing activities 18 9
---- ----
Net change in cash and cash equivalents 11,033 301
Cash and cash equivalents at beginning
of year 17,101 16,800
Exchange differences on translation (274) -
---- ----
Cash and cash equivalents at end of year 27,860 17,101
AssetCo plc
Notes to the Financial Statements
for the year ended 30 September 2020
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. The company operates from an
administrative office in the UK as well as a site in UAE. As at year
end, the company has no subsidiaries. AssetCo plc shares are listed
on the Alternative Investment Market ("AIM") of the London Stock Exchange.
AssetCo has been principally involved in the provision of management
and resources to the fire and rescue emergency services in international
markets however the board has decided to change strategy to develop
an asset and wealth management business while continuing to seek new
contracts for its UAE-based business.
2. Basis of preparation
The audited preliminary announcement has been prepared in accordance
with the Company's accounting policies as disclosed in the financial
statements for the year ended 30 September 2020 and in accordance with
the international accounting standards in conformity with the requirements
of the Companies Act 2006 ('IFRS') and the applicable legal requirements
of the Companies Act 2006. The preliminary announcement was approved
by the Board of Directors on 26 February 2021. The preliminary announcement
does not constitute statutory accounts as defined in section 435 of
the Companies Act 2006. Statutory accounts for the year ended 30 September
2019 have been delivered to the Registrar of Companies. The auditor's
report on those financial statements was unqualified and did not contain
a statement under section 498 of the Companies Act 2006.
The Company will publish its full financial statements for the year
ended 30 September 2020 by 8 March 2021 which will be available on
the Company's website at www.assetco.com and at the Company's registered
office at Singleton Court Business Park, Wonastow Road, Monmouth, Monmouthshire
NP25 5JA.
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 2020
Continuing
UAE Unallocated Operations
GBP000 GBP000 GBP000
Revenue
Revenue to external customers - - -
---- ---- ----
Total revenue - - -
Segment result
Operating (loss)/profit (129) 3,534 3,405
Finance income - 18 18
Finance costs (62) - (62)
---- ---- ----
(Loss)/profit before tax (191) 3,552 3,361
Income tax - - -
---- ---- ----
(Loss)/profit for the year (191) 3,352 3,361
Segment assets and liabilities
Total assets 1,196 32,405 33,601
Total liabilities (1,064) (192) (1,256)
---- ---- ----
Total net assets 132 32,213 32,435
Other segment information
Total capital expenditure - - -
Year ended 30 September 2019
Continuing
UAE Unallocated Operations
GBP000 GBP000 GBP000
Revenue
Revenue to external customers 5,345 - 5,345
---- ---- ----
Total revenue 5,345 - 5,345
Segment result
Operating profit/(loss) 296 (998) (702)
Finance income - 9 9
Finance costs (70) - (70)
---- ---- ----
Profit/(loss) before tax 226 (989) (763)
Income tax - - -
---- ---- ----
Profit/(loss) for the year 226 (989) (763)
Segment assets and liabilities
Total assets 15,572 16,238 31,810
Total liabilities (1,665) (290) (1,955)
---- ---- ----
Total net assets 13,907 15,948 29,855
Other segment information
Total capital expenditure - - -
4. Other income
The legal action against the company's former auditor Grant Thornton,
originally heard in June 2018, resulted in a judgement in AssetCo's
favour. Grant Thornton subsequently appealed this judgement and a
hearing was held in January 2020. On 28 August 2020 the Court of
Appeal handed down their judgement which was that the original opinion
stood but the quantum of the Court award was reduced to reflect credit
for the July 2009 share issuance and the disallowing of an element
of the losses. After adjusting for the reduction by the Court the
revised award, including costs and interest, amounted to approximately
GBP30.5 million.
Both parties were given leave to appeal although in the judgement
of 28 August it was ordered that Grant Thornton must pay to AssetCo
approximately GBP4.6 million in costs plus associated interest irrespective
of the outcome of any appeals and it is this amount which is reflected
as other income in the 2020 financial statements.
As referred to in Note 9 Post Balance Sheet Events Grant Thornton
informed the company on 2 October 2020 that they would not be appealing
the judgement. Accordingly the remaining amount of approximately
GBP25.9 million became payable but will not be recorded until the
2021 financial statements as at the balance sheet date its receipt
was not certain.
5. Earnings/(loss) per share
Basic earnings/(loss) per share is calculated by dividing the profit/(loss)
attributable to ordinary equity holders of the Company by the weighted
average number of ordinary shares outstanding during the year. There
was no dilutive impact in either year therefore diluted earnings/(loss)
per share is equal to basic earnings/(loss) per share.
2020 2019
GBP000 GBP000
Profit/(loss) for the year 3,361 (763)
---- ----
Weighted average number of ordinary shares in issue 12,211,163 12,211,163
Basic and diluted earnings/(loss) per share - pence 27.52 (6.25)
There have been ordinary share transactions which have occurred since
the year end and these are set out in Note 9 Post Balance Sheet Events.
6. Analysis of net cash
2020 2019
GBP000 GBP000
Cash at bank and in hand 27,860 17,101
---- ----
Cash and cash equivalents 27.860 17,101
In addition to the above UAE dirhams amounting to GBP1,058,000
(2019: GBP3,487,000) were held on deposit as security in respect of
outstanding performance and warranty bonds.
7. Reconciliation of profit/(loss before tax to net cash inflow from
operations
2020 2019
GBP000 GBP000
Profit/(loss) for the year before taxation 3,361 (763)
Depreciation and amortisation - 26
Finance costs 62 70
Finance income (18) (9)
Decrease in receivables 6.024 5,670
Decrease in payables (622) (3,285)
---- ----
Cash inflow from operations 8,807 1,709
8. Contingent liabilities
Approximate maximum
liability
at 30 September
2020 2019
GBP000 GBP000
Warranty bond related to a UAE based contract
released in full in 2020 - 1,270
Performance bond related to a UAE based contract
released in full in 2020 - 1,100
Performance bond related to a UAE based contract
released in full in January 2021 1,058 1,100
9. Post balance sheet events
As referred to in the Chairman's statement on 2 October 2020 Grant Thornton
wrote to the company informing them that they would not appeal the judgement
dated 28 August 2020 which therefore then became final. Accordingly
the balance of the award, after the company had reflected in these financial
statements the agreed element of costs and interest decided by the Court,
amounting to approximately GBP25.9 million is a post-balance sheet event
and will be reflected in the company's 2021 financial statements.
As the Court case against Grant Thornton was successfully concluded
on 2 October 2020 a fee became payable to Cadoc Limited amounting to
15% of the proceeds excluding costs. This fee was settled by way of
an issue of 854,722 ordinary shares in the company at a price of GBP4.13
per share. This was approved at a general meeting of shareholders on
17 December 2020.
In a circular dated 2 December 2020 the company proposed a tender offer
to shareholders. This exercise was completed on 21 December 2020 and
had the effect of reducing cash reserves by approximately GBP26.85 million
and the number of shares in issue by 6,532,942.
On 8 January 2021 an Investor Group consisting of Martin Gilbert, Peter
McKellar (both of whom became non-executive directors on 25 January
2021) and Toscafund Asset Management and various associates acquired
a 29.8% shareholding in the company from existing shareholders. Additionally
during January and February 2021 the company purchased an investment
of 5.85 percent of River and Mercantile Group plc, an asset management
business, at a total cost of GBP10.4 million. These events are part
of a move by the company to a new strategy of developing an asset and
wealth management business. Under AIM Rule 14 this will require a readmission
process and the company expects to send out a circular to shareholders
before 31 March 2021.
There are no other post balance sheet events.
10. Annual general meeting
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 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 2020 unless specifically requested by
individual shareholders; it can be downloaded from the company's website.
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