TIDMASTO

RNS Number : 8886O

AssetCo PLC

15 June 2022

15 June 2022

AssetCo plc

("AssetCo" or the "Company")

2022 Half-year Report

for the six months ended 31 March 2022

Key highlights

-- Two acquisitions announced to expand AssetCo's listed equity platform and to build a private markets capability:

o River and Mercantile Group ("RMG")

o Revera Asset Management

   --    Progress made at underlying businesses: 

o Rize ETF - three additional strategies launched and positive net inflows in each month

o Saracen Fund Managers - improvement in positioning and performance

o Parmenion - strong profit growth, with growth prospects improved through broadening of investment offering

-- Assets under Management: GBP12.2 billion (following completion of River and Mercantile acquisition)

   --    Proposed 13.0p interim dividend expected to be declared in Q4 2022 

Campbell Fleming, Chief Executive Officer of AssetCo plc, commented:

"We have made good progress in developing AssetCo's listed equity platform, private markets capability and thematic ETF business. At the same time, Parmenion, which provides investment solutions to advisers and their clients, has expanded. The current market environment, alongside the structural shifts taking place within the asset and wealth management sector, supports a strategy of building an agile asset and wealth manager, uninhibited by legacy issues, to meet the needs of investors."

"There is still much to do, but we have the people, products and the financial strength to deliver for clients and shareholders alike. We will continue to invest in our existing businesses, assess strategic opportunities that will add value to our capabilities, and focus on generating organic growth."

For further information, please contact:

 
 AssetCo plc                                Numis Securities Limited 
  Campbell Fleming, CEO                      Nominated adviser and joint 
  Peter McKellar, Deputy Chairman            broker 
  James Thorneley, Head of Communications    Stephen Westgate / Charles Farquhar/ 
  Tel: +44 (0) 7958 005141                   Giles Rolls 
                                             Tel: +44 (0) 20 7260 1000 
 Panmure Gordon (UK) Limited                Maitland/AMO 
  Joint broker                               Neil Bennett 
  Charles Leigh-Pemberton / Atholl           Rachel Cohen 
  Tweedie / Gabriel Hamlyn                   Tel: +44 (0) 20 7379 5151 
  Tel: +44 (0) 20 7886 2906 
 

For further details, visit the website, www.assetco.com

   Ticker:   AIM: ASTO.L 

CHAIRMAN'S STATEMENT

The six months ended 31 March 2022 was a period of building and growing, following a transformational financial year for AssetCo, during which the Company was transformed into an asset and wealth management business and agreed to acquire interests in four businesses.

There are numerous structural shifts taking place within the asset and wealth management industry driven by changing investor needs, demographics, an evolving approach to savings products, the use of technology and digitalisation, and a continuing pressure on fees. These are presenting both challenges and opportunities. AssetCo is focused on identifying and building on a limited number of growth opportunities and in unlocking value from the repositioning of more traditional asset managers. Of particular relevance are high conviction active equities, ESG/sustainable strategies and thematic investing, and private markets capabilities.

Financials

The Income Statement for the six months ended 31 March 2022 shows revenue of GBP1.3 million (31 March 2021: nil) and a loss before taxation of GBP2.6 million (31 March 2021: profit GBP22.3 million), which is in line with our expectations as we continue to build the business. The profit in 2021 principally arose from the final payment received from the successful litigation claim against Grant Thornton.

Net assets at 31 March 2022 were GBP55.6 million (31 March 2021: GBP31.1 million). This uplift in net assets includes the investment gain in RMG shares of GBP1.2 million, where the Company held 5.85% of the issued equity share capital prior to the acquisition and the goodwill recognised on investments in Rize ETF and Saracen totalling GBP19.8 million.

Building Active Equity and Private Markets platforms

In January 2022, the Company announced an offer to acquire River and Mercantile Group by way of a scheme of arrangement for effectively GBP95.3 million, to be satisfied by the issue of around 6 million new AssetCo shares. The offer was conditional on the sale of River and Mercantile's UK Solutions business and a subsequent GBP190 million return of capital to shareholders, both of which have now occurred. The acquisition received overwhelming support from both River and Mercantile and AssetCo shareholders at their respective General Meetings and has received regulatory approval from the Financial Conduct Authority. Completion of the acquisition and the issue of the new AssetCo shares takes place today.

River and Mercantile has an established and well-respected equities team that manages around GBP2.7 billion of Assets under Management (AuM). Importantly, the acquisition also provides the foundation stone to building a private markets business given its infrastructure investment team.

Significant progress has already been made in terms of right-sizing the River and Mercantile business post the sale of the UK Solutions business. Material cost efficiencies have been identified, with a large proportion being implemented. It is hoped that, due to the actions being taken both on cost and building new revenue, River and Mercantile can be returned to profitability by early 2023.

Separately, in February 2022 the Company announced the acquisition of Revera Asset Management for GBP2.8 million, to be satisfied through a mix of new AssetCo shares and cash. Revera has approximately GBP103 million of AuM and is based in Edinburgh. The acquisition of Revera is conditional on regulatory approval from the Financial Conduct Authority, which is expected shortly. The proposed acquisition of Revera, along with that of Saracen Fund Managers last year, demonstrates our desire to have a strong presence in Scotland, given the talent and expertise located there.

Subject to regulatory approval and completion, River and Mercantile, Saracen Fund Managers and Revera will form the Company's listed equity platform, offering a range of UK, smaller companies, European and Global capabilities. Individual teams will continue to employ their existing investment processes, but will benefit from sharing research, ESG analysis, distribution and marketing resources. This should result in a more efficient and cost effective platform.

Progress of existing businesses

The last six months has been a challenging period for financial markets. Despite this, all of the Company's existing businesses have made good progress.

Since the Company acquired Rize in July 2021, the business has successfully launched three new thematic strategies - Digital Payments Economy, Pet Care and Emerging Market Internet and Ecommerce. The business now offers eight ETFs with total AuM of $512.9 million and, despite a challenging market environment, recorded net inflows in each of the six months to 31 March 2022.

During the period under review, Parmenion, a B2B investment and advisory platform to the UK wealth and IFA sector, broadened the range of managed portfolio solutions that are available on its platform. It has added strategies managed by LGT Wealth Management, Tatton Investment Management and Dimensional. The platform's AuM was GBP9.4 billion at 31 March 2022, and has been relatively robust given the volatility in financial markets, but should see growth over the calendar year.

In May 2022, Parmenion published its annual report and accounts for the 12 months ended 31 December 2021, which provided a good overview of the business and its potential. Year-on-year management and custody fees grew from GBP29.6 million to GBP35.6 million - an increase of 21%. There was a significant increase in underlying profit to GBP4.6 million. AuM grew by 17.2%, from GBP8.2 billion to GBP9.6 billion. Parmenion partners with over 1,500 advisers providing investment solutions to over 80,000 underlying clients.

Following the acquisition of Saracen in July 2021, the business has been relaunched with an updated brand. At 31 March 2022, AuM was GBP113.2 million.

Capital structure and dividend policy

We intend to write to shareholders shortly with proposals to instigate a sub-division of the Company's ordinary shares of 10p each ("Ordinary Shares") on a basis to be determined. Such a sub-division would increase the number of Ordinary Shares in issue and the Board believes this would reduce the Company's share price to a level where smaller sized dealings in Ordinary Shares would be more efficient. It should also improve the liquidity, spread and marketability of the Ordinary Shares to a wider group of investors.

The Board recognises the importance some investors attach to receiving a regular income from their shareholdings. It is, therefore, expected that the Company declares a 13.0p interim dividend in Q4 2022. Thereafter, the Company intends to adopt a progressive dividend policy.

Board and Corporate Broker

I would like to welcome Jonathan Dawson to the Board further to the completion of the acquisition of River and Mercantile. Jonathan was previously Chairman of River and Mercantile. He started his career in the Ministry of Defence before joining Lazard, the investment bank, where he spent over 20 years. He left Lazard in 2005 and co-founded Penfida Limited, the leading independent corporate finance advisor to pension funds. Jonathan's experience and expertise will be a valuable addition to the Board.

In April, the Company announced the appointment of Numis as Nominated Adviser and Joint Broker. The Company also appointed Panmure Gordon as Joint Broker. The Board and I are grateful to the team at Arden Partners, our former Nominated Adviser, for their advice and hard work over the years and wish them well for the future.

Outlook

The Company continues to make good progress in executing on its strategy. The Company is also in sound financial shape and following completion of the acquisition of, and return of capital from, River and Mercantile, the Group will have net cash of more than GBP45 million.

The acquisition of River and Mercantile results in the Group having investments in businesses with total AuM of GBP12.2 billion, with genuine strength in active equities and thematic strategies, together with an embryonic private markets business. Our aim in relation to the integration of the businesses is to develop an operating model which will improve scalability, drive material cost synergies and strengthen distribution.

Martin Gilbert

Chairman

15 June 2022

AssetCo plc

Consolidated Income Statement

for the six month ended 31 March 2022

 
                                                        Six months ended              Year ended 
                                     Notes               Unaudited       Unaudited31       Audited 
                                                     31 March 2022        March 2021       30 Sept 
                                                           GBP'000           GBP'000          2021 
                                                                                           GBP'000 
-----------------------------------  ------  ---------------------  ----------------  ------------ 
Revenue                                   3                  1,285                 -           408 
Cost of sales                                              (1,767)                 -         (536) 
-------------------------------------------  ---------------------  ----------------  ------------ 
Gross (loss)/profit                                          (482)                 -         (128) 
Other income                              4                      -            22,388        22,388 
Administrative expenses                                    (5,261)             (766)       (7,967) 
-------------------------------------------  ---------------------  ----------------  ------------ 
Operating (loss)/profit                                    (5,743)            21,622        14,293 
Share of net profits of associate 
 accounted for using equity method                           1,512                 -             - 
Investment income                         5                  1,590               645         1,844 
Finance costs                                                    -               (8)           (8) 
-------------------------------------------  ---------------------  ----------------  ------------ 
(Loss)/profit before income 
 tax                                      6                (2,641)            22,259        16,129 
Income tax charge                         7                      -                 -       (1,442) 
-----------------------------------  ------  ---------------------  ----------------  ------------ 
(Loss)/profit for the year                                 (2,641)            22,259        14,687 
-------------------------------------------  ---------------------  ----------------  ------------ 
(Loss)/profit attributable 
 to: 
Owners of the parent                                       (2,252)            22,259        14,796 
Non-controlling interest                                     (389)                 -         (109) 
-------------------------------------------  ---------------------  ----------------  ------------ 
                                                           (2,641)            22,259        14,687 
 ------------------------------------------  ---------------------  ----------------  ------------ 
 
Earnings per Ordinary Share                                  Pence             Pence         Pence 
 attributable to the owners of 
 the parent during the year 
-----------------------------------  ------  ---------------------  ----------------  ------------ 
From continuing operations 
Basic                                     8                (26.73)            284.72        180.57 
Diluted                                   8                (23.91)            284.72        161.05 
-----------------------------------  ------  ---------------------  ----------------  ------------ 
 

AssetCo plc

Consolidated Statement of Comprehensive Income

for the six month ended 31 March 2022

 
                                                  Six months ended                Year ended 
                                                 Unaudited      Unaudited         Audited 30 
                                             31 March 2022       31 March          Sept 2021 
                                                   GBP'000           2021            GBP'000 
                                                                  GBP'000 
-----------------------------------   --------------------  -------------  ----------------- 
 
(Loss)/profit for the year                         (2,641)         22,259             14,687 
Other comprehensive (loss)/income: 
Currency translation differences                         -           (10)                (7) 
------------------------------------  --------------------  -------------  ----------------- 
Other comprehensive income 
 (net of tax)                                            -           (10)                (7) 
------------------------------------  --------------------  -------------  ----------------- 
Total comprehensive income 
 for the period                                    (2,641)         22,249             14,680 
------------------------------------  --------------------  -------------  ----------------- 
Attributable to: 
Owners of the parent                               (2,252)         22,249             14,799 
Non-controlling interests                            (389)              -              (109) 
------------------------------------  --------------------  -------------  ----------------- 
Total comprehensive income 
 for the year                                      (2,641)         22,249             14,680 
------------------------------------  --------------------  -------------  ----------------- 
 

AssetCo plc

Consolidated Statement of Financial Position

as at 31 March 2022

 
                                  Notes   Unaudited             Unaudited         Audited 
                                           31 March         31 March 2021         30 Sept 
                                               2022               GBP'000            2021 
                                            GBP'000                               GBP'000 
--------------------------------  -----  ----------  --------------------  -------------- 
Assets 
Non-current assets 
Property, plant and equipment                    27                     -              16 
Intangible assets                            20,051                     -          20,067 
Investments accounted for 
 using the equity method              9      23,383                     -               - 
--------------------------------  -----  ----------  --------------------  -------------- 
Total non-current assets                     43,461                     -          20,083 
--------------------------------  -----  ----------  --------------------  -------------- 
Current assets 
Trade and other receivables                     636                   230             607 
Financial assets at fair value 
 through profit and loss             10      13,200                10,800          12,000 
Current income tax receivable                     3                     -               3 
Cash and cash equivalents                     3,634                21,324          26,902 
--------------------------------  -----  ----------  --------------------  -------------- 
Total current assets                         17,473                21,554          39,512 
--------------------------------  -----  ----------  --------------------  -------------- 
Total assets                                 60,934                32,354          55,595 
--------------------------------  -----  ----------  --------------------  -------------- 
 
Liabilities 
Non-current liabilities 
Deferred tax liabilities                         49                     -              49 
--------------------------------  -----  ----------  --------------------  -------------- 
Total non-current liabilities                    49                     -              49 
--------------------------------  -----  ----------  --------------------  -------------- 
Current liabilities 
Trade and other payables                      1,973                 1,251           1,972 
 Loan due to related party                    1,000                     -               - 
 Current income tax liabilities               1,437                     -           1,437 
--------------------------------  -----  ----------  --------------------  -------------- 
 Total current liabilities                    4,908                 1,251           3,409 
--------------------------------  -----  ----------  --------------------  -------------- 
 Total liabilities                            4,957                 1,251           3,458 
--------------------------------  -----  ----------  --------------------  -------------- 
 
 Equity attributable to owners 
  of the parent 
 Share capital                                  843                   653             843 
 Share premium                               27,770                 3,274          27,770 
 Capital redemption reserve                     653                   653             653 
 Merger reserve                               2,762                     -           2,762 
 Other reserves                               7,977                     -           5,496 
 Retained earnings                           16,640                26,523          18,892 
--------------------------------  -----  ----------  --------------------  -------------- 
                                             56,645                31,103          56,416 
 Non-controlling interest                     (668)                     -           (279) 
--------------------------------  -----  ----------  --------------------  -------------- 
 Total equity                                55,597                31,103          56,137 
--------------------------------  -----  ----------  --------------------  -------------- 
 
 Total equity and liabilities                60,934                32,354          55,595 
--------------------------------  -----  ----------  --------------------  -------------- 
 

AssetCo plc

Consolidated Cash Flows

for the six month ended 31 March 2022

 
                                              Six months ended    Year ended 
                                            Unaudited  Unaudited     Audited 
                                             31 March   31 March     30 Sept 
                                                 2022       2021        2021 
                                              GBP'000    GBP'000     GBP'000 
------------------------------------------  ---------  ---------  ---------- 
Cash flow from operating activities 
 Cash generated by operations (note 
 11)                                          (2,768)     19,381      16,755 
Cash released in respect of bonds                   -      1,126       1,104 
Finance costs                                       -        (8)         (8) 
------------------------------------------  ---------  ---------  ---------- 
Net cash generated by operating 
 activities                                   (2,768)     20,499      17,851 
------------------------------------------  ---------  ---------  ---------- 
Cash flow from investing activities 
Payments for acquisition of subsidiaries, 
 net of cash acquired                               -          -    (16,460) 
Payments to acquire associated 
 undertakings                                (21,871)          -           - 
Dividends received from financial 
 assets held at fair value                        390          -         194 
Interest income                                     -          -           - 
Purchase of property, plant and 
 equipment                                       (14)          -         (8) 
Purchase of intangibles                           (6)          -         (1) 
------------------------------------------  ---------  ---------  ---------- 
Net cash used in investing activities        (21,501)          -    (16,275) 
------------------------------------------  ---------  ---------  ---------- 
Cash flow from financing activities 
Proceeds from issuance of ordinary 
 shares                                             -          -      25,103 
Costs of share issue                                -          -       (515) 
Payments for shares bought back                     -   (26,850)    (26,850) 
Buy-back transaction costs                          -      (171)       (171) 
Short-term loan from related party              1,000          -           - 
------------------------------------------  ---------  ---------  ---------- 
Net cash flow from financing 
 activities                                     1,000   (27,021)     (2,523) 
------------------------------------------  ---------  ---------  ---------- 
Net change in cash and cash equivalents      (23,269)    (6,522)       (947) 
Cash and cash equivalents at beginning 
 of year                                       26,902     27,860      27,860 
Exchange differences on translation                 -       (14)        (11) 
------------------------------------------  ---------  ---------  ---------- 
Cash and cash equivalents at 
 end of year                                    3,633     21,324      26,902 
------------------------------------------  ---------  ---------  ---------- 
 

AssetCo plc

Consolidated Statement of Changes in Equity

for the six month ended 31 March 2022

 
                               Share      Capital 
                      Share  premium   redemption     Merger      Other    Retained                  Non-controlling        Total 
                    capital  account      reserve    reserve    reserve    earnings         Total           interest       equity 
                    GBP'000  GBP'000      GBP'000    GBP'000    GBP'000     GBP'000       GBP'000            GBP'000      GBP'000 
-----------------   -------  -------  -----------  ---------  ---------  ----------  ------------  -----------------  ----------- 
At 1 October 2020     1,221        -            -          -          -     31,124)        32,345                  -       32,345 
Comprehensive 
 income 
Profit for the 
 period                   -        -            -          -          -      22,259        22,259                  -       22,259 
Other 
comprehensive 
income/(expense) 
Currency 
 translation 
 differences              -        -            -          -          -        (10)          (10)                  -         (10) 
------------------  -------  -------  -----------  ---------  ---------  ----------  ------------  -----------------  ----------- 
Total 
 comprehensive 
 income                   -        -            -          -          -      22,249        22,249                  -       22,249 
------------------  -------  -------  -----------  ---------  ---------  ----------  ------------  -----------------  ----------- 
Share-based 
 payments 
 - success fee           85    3,445            -          -          -           -         3,530                  -        3,530 
Share buy-back        (653)        -          653          -          -    (26,850)      (26,850)                  -     (26,850) 
Costs of share 
 buy-back                 -        -            -          -          -       (171)         (171)                 -`        (171) 
------------------  -------  -------  -----------  ---------  ---------  ----------  ------------  -----------------  ----------- 
At 31 March 2021        653    3,445          653          -          -      26,352        31,103                  -       31,103 
------------------  -------  -------  -----------  ---------  ---------  ----------  ------------  -----------------  ----------- 
Comprehensive 
 income 
Loss for the 
 period                   -        -            -          -          -     (7,463)       (7,463)              (109)      (7,572) 
Other 
comprehensive 
income 
Currency 
 translation 
 differences              -        -            -          -          -         (3)           (3)                  -          (3) 
------------------  -------  -------  -----------  ---------  ---------  ----------  ------------  -----------------  ----------- 
Total 
 comprehensive 
 (loss)                   -        -            -          -          -     (7,460)       (7,460)              (109)      (7,569) 
------------------  -------  -------  -----------  ---------  ---------  ----------  ------------  -----------------  ----------- 
Proceeds from 
 share 
 issue                  173   24,840            -          -          -           -        25,013                  -       25,013 
Costs of share 
 issue                    -    (515)            -          -          -           -         (515)                  -        (515) 
Shares issued on 
 acquisition             17        -            -      2,762          -           -         2,779                  -        2,779 
Share-based 
 payments 
 - LTIP                   -        -            -          -      5,496           -         5,496                  -        5,496 
Non-controlling 
 interest on 
 acquisition              -        -            -          -          -           -             -              (170)        (170) 
------------------  -------  -------  -----------  ---------  ---------  ----------  ------------  -----------------  ----------- 
At 30 September 
 2021                   843   27,770          653      2,762      5,496      18,892        56,416              (279)       56,137 
------------------  -------  -------  -----------  ---------  ---------  ----------  ------------  -----------------  ----------- 
Comprehensive 
 income 
Loss for the 
 period                   -        -            -          -          -     (2,252)       (2,252)              (389)      (2,641) 
------------------  -------  -------  -----------  ---------  ---------  ----------  ------------  -----------------  ----------- 
Total 
 comprehensive 
 (loss)                   -        -            -          -          -     (2,252)       (2,252)              (389)      (2,641) 
------------------  -------  -------  -----------  ---------  ---------  ----------  ------------  -----------------  ----------- 
Share-based 
 payments 
 - LTIP                   -        -            -          -      2,481           -         2,481                  -        2,481 
------------------  -------  -------  -----------  ---------  ---------  ----------  ------------  -----------------  ----------- 
At 31 March 2022        843   27,770          653      2,762      7,977      16,640       56,6456              (668)       55,977 
------------------  -------  -------  -----------  ---------  ---------  ----------  ------------  -----------------  ----------- 
 

NOTES FORMING PART OF THE INTERIM FINANCIAL STATEMENTS

1. General information and basis of presentation

AssetCo Plc ("AssetCo" or the "Company") is a public limited 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's principal activity is the development of an asset and wealth management business.

The financial information in the Half-year Report has been prepared using the recognition and measurement principles of the international accounting standards in conformity with the requirements of the Companies Act 2006 ("IFRS"). 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 2022 and are unchanged from those disclosed in the Annual Report and Financial Statements for the year ended 30 September 2021 with the exception that following the acquisition of 30% of Parmenion Capital Partners LLP on 1 October 2021 the Group has adopted IFRS 10 in respect of accounting for Associated undertakings.

The financial information for the six months ended 31 March 2022 and the six months ended 31 March 2021 is unaudited and does not constitute the Group's statutory financial statements for those periods. The comparative financial information for the full year ended 30 September 2021 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 (GBP'000), except where otherwise indicated .

2. Going concern

At the time of approving the financial statements, the Directors have a reasonable expectation that the Company and Group have adequate resources to continue in operational existence for the foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing the financial statements.

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. Segment information is therefore presented in respect of the company's commercial competencies, Active Specialists, High-Growth Thematics and Digital Platforms and Head Office Costs.

All revenues are earned in the UK. The Directors consider that 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 also operated out of a branch in UAE. Unallocated comprises the assets and liabilities of AssetCo, including the UAE business with Head Office costs identified separately.

The segment information provided to the Board for the reportable segments is as follows:

 
Period ended                                            Digital 
 31 March 2022                  Active  High-growth   platforms 
 unaudited                 specialists    thematics              Head office  Unallocated     Total 
                               GBP'000      GBP'000     GBP'000      GBP'000      GBP'000   GBP'000 
------------------------  ------------  -----------  ----------  -----------  -----------  -------- 
Revenue 
 Management fees                   424            -           -            -            -       424 
Marketing fees                       -          861           -            -            -       861 
------------------------  ------------  -----------  ----------  -----------  -----------  -------- 
Total revenue                      424          861           -            -            -     1,285 
------------------------  ------------  -----------  ----------  -----------  -----------  -------- 
 
Operating result 
 before adjustments                (6)      (1,229)       1,512        (969)            -     (692) 
Share-based payments 
 - LTIP                              -            -           -            -      (2,493)   (2,493) 
Exceptional costs                    -            -           -            -      (1,046)   (1,046) 
------------------------  ------------  -----------  ----------  -----------  -----------  -------- 
Operating profit/(loss)            (6)      (1,229)       1,512        (969)      (3,539)   (4,231) 
Investment income                    -            -           -            -        1,590     1,590 
Finance costs                        -            -           -            -            -         - 
------------------------  ------------  -----------  ----------  -----------  -----------  -------- 
Profit/(loss) 
 before tax                        (6)      (1,229)       1,512        (969)      (1,949)   (2,641) 
Income tax                           -            -           -            -            -         - 
------------------------  ------------  -----------  ----------  -----------  -----------  -------- 
Profit/(loss) 
 for the year                      (6)      (1,229)       1,512        (969)      (1,949)   (2,641) 
------------------------  ------------  -----------  ----------  -----------  -----------  -------- 
 
  Segment assets 
  Total assets                   3,523       20,346      23,383            -       14,682    60,934 
Total liabilities                 (48)        (304)           -            -      (4,604)   (4,956) 
------------------------  ------------  -----------  ----------  -----------  -----------  -------- 
Total net assets                 3,475       20,042      23,383            -       10,078    55,978 
------------------------  ------------  -----------  ----------  -----------  -----------  -------- 
Depreciation                         -            3           -            -            -         3 
Amortisation                         2           20           -            -            -        22 
Total capital 
 expenditure                         -           20           -            -            -        20 
 
 
 
  Period ended 
  31 March 2021                 Active  High-growth     Digital     Head 
  unaudited                specialists    thematics   platforms   office  Unallocated    Total 
                               GBP'000      GBP'000     GBP'000  GBP'000      GBP'000  GBP'000 
------------------------  ------------  -----------  ----------  -------  -----------  ------- 
 
  Revenue 
Management fees                      -            -           -        -            -        - 
Marketing fees                       -            -           -        -            -        - 
------------------------  ------------  -----------  ----------  -------  -----------  ------- 
Total revenue                        -            -           -        -            -        - 
------------------------  ------------  -----------  ----------  -------  -----------  ------- 
 
Operating result 
 before adjustments                  -            -           -    (460)            -    (460) 
Other income                         -            -           -        -       22,388   22,388 
Share-based payments 
 - LTIP                              -            -           -        -            -        - 
Exceptional costs                    -            -           -        -        (306)    (306) 
------------------------  ------------  -----------  ----------  -------  -----------  ------- 
Operating profit/(loss)              -            -           -    (460)       22,082   21,622 
Investment income                    -            -           -        -          645      645 
Finance costs                        -            -           -        -          (8)      (8) 
------------------------  ------------  -----------  ----------  -------  -----------  ------- 
Profit before 
 tax                                 -            -           -    (460)       22,719   22,259 
Income tax                           -            -           -        -            -        - 
------------------------  ------------  -----------  ----------  -------  -----------  ------- 
Retained profit                      -            -           -    (460)       22,719   22,259 
------------------------  ------------  -----------  ----------  -------  -----------  ------- 
 
  Segment assets 
Total assets                         -            -           -        -       32,354   32,354 
Total liabilities                    -            -           -        -      (1,251)  (1,251) 
------------------------  ------------  -----------  ----------  -------  -----------  ------- 
Total net assets                     -            -           -        -       31,103   31,103 
------------------------  ------------  -----------  ----------  -------  -----------  ------- 
Total capital 
 expenditure                         -            -           -        -            -        - 
 
 
Year ended 30 
 September 2021                 Active  High-growth     Digital     Head 
 audited                   specialists    thematics   platforms   office  Unallocated     Total 
                               GBP'000      GBP'000     GBP'000  GBP'000      GBP'000   GBP'000 
------------------------  ------------  -----------  ----------  -------  -----------  -------- 
Revenue 
 Management fees                   135            -           -        -            -       408 
Marketing fees                       -          273           -        -            -       273 
------------------------  ------------  -----------  ----------  -------  -----------  -------- 
Total revenue                      135          273           -        -            -       408 
------------------------  ------------  -----------  ----------  -------  -----------  -------- 
 
Operating result 
 before adjustments                 32        (347)           -  (1,147)            -   (1,516) 
Other income                         -            -           -        -       22,388    22,388 
Share-based payments 
 - LTIP                              -            -           -               (6,273)   (6,273) 
Exceptional costs                    -            -           -        -        (360)     (360) 
------------------------  ------------  -----------  ----------  -------  -----------  -------- 
Operating profit/(loss)             32        (347)           -  (1,147)       15,755    14,293 
Investment income                    -            -           -        -        1,844     1,844 
Finance costs                        -            -           -        -          (8)       (8) 
------------------------  ------------  -----------  ----------  -------  -----------  -------- 
Profit/(loss) 
 before tax                         32        (347)           -  (1,147)       17,591    16,129 
Income tax                         (6)            1           -        -      (1,437)   (1,442) 
------------------------  ------------  -----------  ----------  -------  -----------  -------- 
Profit/(loss) 
 for the year                       26        (346)           -  (1,147)       16,154    14,687 
------------------------  ------------  -----------  ----------  -------  -----------  -------- 
 
  Segment assets 
  Total assets                   3,518       21,712           -        -       34,335    59,595 
Total liabilities                 (85)        (471)           -        -      (2,902)   (3,458) 
------------------------  ------------  -----------  ----------  -------  -----------  -------- 
Total net assets                 3,433       21,271           -        -       31,433    56,137 
------------------------  ------------  -----------  ----------  -------  -----------  -------- 
Depreciation                         -            2           -        -            -         2 
Amortisation                         1            7           -        -            -         8 
Total capital 
 expenditure                         3            5           -        -            -         8 
 
   4.   Other income 
 
                               Six months ended         Year ended 
                            Unaudited     Unaudited        Audited 
                             31 March      31 March   30 September 
                                 2022          2021           2021 
                              GBP'000       GBP'000        GBP'000 
--------------------------  ---------  ------------  ------------- 
Grant Thornton litigation           -        25,918         25,918 
Success fee                         -       (3,530)        (3,530) 
--------------------------  ---------  ------------  ------------- 
                                    -        22,388         22,388 
--------------------------  ---------  ------------  ------------- 
 

The case against Grant Thornton was concluded successfully in the financial year 2021. The total award came to GBP30.515 million, of which GBP4.597 million was reflected in the 2020 full year accounts, as it had been awarded by the Courts irrespective of the outcome of any appeal. Other income shown in these accounts represents the balance of the Court's award, less the success fee of 15% of claim proceeds excluding costs.

   5.   Investment income 
 
                                               Six months ended         Year ended 
                                            Unaudited     Unaudited        Audited 
                                             31 March      31 March   30 September 
                                                 2022          2021           2021 
                                              GBP'000       GBP'000        GBP'000 
------------------------------------------  ---------  ------------  ------------- 
Fair value gains on financial instruments 
 classified as fair value through 
 profit and loss                                1,200           450          1,650 
Dividend income                                   390           195            195 
------------------------------------------  ---------  ------------  ------------- 
                                                1,590           645          1,845 
------------------------------------------  ---------  ------------  ------------- 
 
   6.    Adjusted profit 
 
                                                Six months ended         Year ended 
                                              Unaudited   Unaudited         Audited 
                                               31 March    31 March    30 September 
                                                   2022        2021            2021 
                                                GBP'000     GBP'000         GBP'000 
-------------------------------------------  ----------  ----------  -------------- 
 
 Reported pre-tax (loss)/profit                 (2,641)      22,259          16,129 
 Add back: 
 Other income - Grant Thornton litigation             -    (22,388)        (22,388) 
 Share-based payments - LTIP                      2,493           -           6,273 
 Exceptional costs related to re-admission 
  documents                                       1,046         306             360 
 
 Adjusted pre-tax profit                            898         177             374 
-------------------------------------------  ----------  ----------  -------------- 
 

The Group has grown rapidly since shareholder approval was given to change its strategy in April 2021. Because of AssetCo's relatively low market capitalisation at the outset of its growth journey it has required two re-admission circulars. Prior to the change in strategy the Group had successfully concluded the long-running litigation against its former auditor, Grant Thornton, resulting in a significant settlement which, net of related costs, gave rise to an Other Income figure of GBP22.388 million.

These items, together with a new incentivisation scheme for management in the form of the LTIP, have perhaps masked the underlying progress of the business's results. Accordingly, we have set out above the Group's pre-tax result adjusted for the three items mentioned.

7. Income tax charge

 
                                              Six months ended           Year ended 
                                            Unaudited      Unaudited        Audited 
                                             31 March       31 March   30 September 
                                         2022 GBP'000   2021 GBP'000   2021 GBP'000 
--------------------------------------  -------------  -------------  ------------- 
Current tax: 
Current tax on profit for the year                  -              -          1,437 
--------------------------------------  -------------  -------------  ------------- 
Total current tax                                   -              -          1,437 
 
  Deferred tax: 
Arising from movement in deferred tax 
 assets                                         (228)              -          (307) 
Arising from movement in deferred tax 
 liabilities                                      228              -            312 
--------------------------------------  -------------  -------------  ------------- 
Total deferred tax                                  -              -              5 
--------------------------------------  -------------  -------------  ------------- 
Income tax charge                                   -              -          1,442 
--------------------------------------  -------------  -------------  ------------- 
 

8. Earnings per share

Basic earnings per share is calculated by dividing the profit attributable to equity owners of the parent by the weighted average number of Ordinary Shares in issue during the period.

Diluted earnings per share is calculated by adjusting the weighted average number of Ordinary Shares outstanding assuming conversion of all dilutive potential Ordinary Shares. The Company has one category of dilutive potential Ordinary Shares, being shares allocated to the LTIP pool.

 
                                           Six months ended       Year ended 
                                         Unaudited  Unaudited        Audited 
                                          31 March   31 March   30 September 
                                              2022       2021           2021 
                                           GBP'000    GBP'000        GBP'000 
---------------------------------------  ---------  ---------  ------------- 
 
(Loss)/profit attributable to owners 
 of the parent                             (2,252)     22,259         14,796 
---------------------------------------  ---------  ---------  ------------- 
                                               No:        No:            No: 
Weighted average number of ordinary 
 shares in issue                         8,424,847  7,817,964      8,194,031 
 Effect of dilutive potential ordinary 
  shares                                   993,315          -        993,315 
---------------------------------------  ---------  ---------  ------------- 
Weighted average number of ordinary 
 shares - diluted                        9,418,162  7,817,964      9,187,346 
---------------------------------------  ---------  ---------  ------------- 
 
                                             Pence      Pence          Pence 
Basic                                      (26.73)     284.72         180.57 
Diluted                                    (23.91)     284.72         161.05 
 

9. Investments accounted for using the equity method

On 1 October 2021 the Group acquired a 30% stake in Parmenion Capital Partners LLP for a purchase price of GBP21.9 million. The investment is accounted for using the equity method and a reconciliation of the cost of investment and accumulated results of Parmenion is set out below:

 
                                       Six months ended         Year ended 
                                    Unaudited     Unaudited        Audited 
                                     31 March      31 March   30 September 
                                         2022          2021           2021 
                                      GBP'000       GBP'000        GBP'000 
----------------------------------  ---------  ------------  ------------- 
At start of period                          -             -              - 
Cost of investment                     21,871             -              - 
Share of net profits of associate 
 using equity method                    1,512             -              - 
----------------------------------  ---------  ------------  ------------- 
At end of period                       23,383             -              - 
----------------------------------  ---------  ------------  ------------- 
 

10. Financial assets at fair value through profit and loss

At 31 March 2022 the Group held 5,000,000 shares in River and Mercantile Group Plc and the fair value at that date is recognised here. The six months to 31 March 2022 shows a fair value gain of GBP1.2 million (see note 5). The Group has also received dividends amounting to GBP390,000 in the period (see note 5). As we report in the Chairman's statement and note 12 we have today announced the completion of the acquisition of River and Mercantile Group Plc so from today's date the investment will be accounted for as a business combination.

11. Cash generated by operations

 
                                                Six months ended       Year ended 
                                              Unaudited  Unaudited        Audited 
                                               31 March   31 March   30 September 
                                                   2022       2021           2021 
                                                GBP'000    GBP'000        GBP'000 
--------------------------------------------  ---------  ---------  ------------- 
 
                                                 (2,641 
(Loss)/profit before tax                              )     22,259         16,129 
Adjustments for: 
Share-based payments 
 - LTIP                                           2,481          -          5,496 
 - Success fee on Grant Thornton litigation           -      3,530          3,530 
Share of profits of associates                  (1,512)          -              - 
Depreciation                                          3          -              2 
Amortisation                                         22          -              8 
Finance costs                                         -          8              8 
Investment income                                 (390)          -          (194) 
Increase in investments                         (1,200)   (10,800)       (12,000) 
Changes in working capital 
- Trade and other receivables                      (29)      4,458          4,367 
- Trade and other payables                          498       (74)          (591) 
--------------------------------------------  ---------  ---------  ------------- 
Net cash generated/(consumed) by operations     (2,768)     19,381         16,755 
--------------------------------------------  ---------  ---------  ------------- 
 

12. Post balance sheet event

On 25 January 2022 the Company announced a formal bid to acquire the 94.15% of River and Mercantile Group Plc which was not already owned, with River and Mercantile shareholders entitled to receive 0.07392 New AssetCo shares for each River and Mercantile share held. As referred to in the Chairman's statement the acquisition has completed today. The effective acquisition cost is GBP46 million.

13. Electronic communications

This Half-year Report 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 Half-year Report unless specifically requested by individual shareholders.

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END

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June 15, 2022 03:03 ET (07:03 GMT)

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