RNS Number:1774Z
AssetCo PLC
28 June 2007
For Immediate Release 28 June 2007
AssetCo plc
("AssetCo" and or the "Company")
Results for the year ended 31 March 2007
AssetCo plc, (AIM : ASTO) a leading provider of total managed services to the UK
Fire and Rescue Authorities, is pleased to announce its results for the year
ended 31 March 2007 following the reverse takeover of AssetCo Group Limited by
Asfare Group plc in March 2007.
KEY POINTS
Proforma results for the year ended 31 March 2007
* Turnover of #102.6m in line with the published profit forecast contained
within the admission document of #103.2m
* EBITDA of #19.6m ahead of forecast of #17.9m
* PBTA of #6.4m ahead of forecast of #6.2m
Statutory results for the year ended 31 March 2007 (12 months Asfare and 1 day
AssetCo)
* Turnover #9.7m (2006: #4.9m) ; profit before tax #0.7m (2006: #0.4m)
Reverse takeover of AssetCo
* #80.2m reverse takeover of AssetCo Group Limited by Asfare Group plc
* Placing of new ordinary shares raising #20.0m
* Subsequent change of name to AssetCo plc
Business
* Integration of Asfare and AssetCo businesses on target
* Emergency Services Division
- Current bid pipeline - with potential life value of c. #600m over 20
years
- 8 FRAs in advanced stage of evaluation for outsourcing
- Currently tendering for National Resilience programme contract
* Emergency Equipment Division
- Awarded 4 year framework agreement for supply of pumping appliances to
the Fire and Rescue Service
- Approved NHS supplier for fast response vehicles
- Strong forward order book across division
Tim Wightman, Chairman, commented:
"Trading in quarter one is ahead of the Board's expectations. Trading conditions
around the Group remain favourable and opportunities are increasing in all key
areas of business activity. AssetCo has critical mass in terms of people,
expertise, experience, turnover and profit. It has first mover advantage in the
supply of outsourced fire brigade services and is a key product supplier to the
sector throughout the UK and beyond."
"The value AssetCo can contribute has now been proven and with eight FRAs in
advanced stages of evaluating the move to an outsourced model, the immediate and
long term future for AssetCo has never looked better. We therefore enter the new
financial year with optimism and confidence."
For more information please contact:
AssetCo plc Tel: +44 (0) 20 8515 3999
John Shannon
Frank Flynn
Buchanan Communications Tel: +44 (0) 20 7466 5000
Tim Anderson
Isabel Podda
Chairman's statement
Introduction
This is my first Chairman's statement since the takeover of AssetCo Group
Limited by Asfare Group plc and the successful share placing which resulted in
the creation of AssetCo plc as we now know it.
I would like to take this opportunity to welcome all shareholders to the new
company and thank them for their support. I would also like to thank the
executive team, the board and all staff for their hard work during the year and
particularly through a transaction which was complex and time consuming, but
ultimately rewarding.
The transaction to create AssetCo plc was the dominating development of the year
under review, however it was also a period of impressive organic growth in
profitability reflecting the strategy of the business to capitalise on its
managed service first mover advantage in the Fire and Rescue market. AssetCo now
has a platform to achieve its plans to increase profitability through contract
wins, expansion of existing contracts, extension of its product portfolio and by
continued acquisition.
We ended the year with strong trading in the final quarter supported by organic
and acquisition led growth and this has continued into the first quarter of the
current financial year. This buoyant performance is anticipated to be
deliverable on a sustainable basis. In addition the integration synergies of the
combined businesses will start to take effect from quarter two.
Pro-forma Financial Results and Statutory Financial Results
The Group as it now stands only traded for one day of the year under review.
Consequently, in line with the approach taken in the Admission Document, the
financial review is presented in a pro-forma format which consolidates the
performance of the constituent companies for the whole year.
I am pleased to be able to report a strong performance for the year with
turnover of #102.6m, in line with the forecast contained within the Admission
Document (#103.2m), EBITDA of #19.6m and pre-tax profit before amortisation of
#6.4m against forecasts of #17.9m and #6.2m respectively.
The audited consolidated profit and loss account shows a profit before tax of
#726,000, an increase of #368,000 over the previous year. EBITDA, excluding
exceptional redundancy costs of #267,000, was #1.4 million.
Organisation
Following the transaction, the business has been organised into two independent
trading divisions: Emergency Services and Emergency Equipment.
Emergency Services Division
This division owns, manages, maintains and ensures the availability of
approximately 650 fire and rescue vehicles and over 50,000 items of operational
equipment for the London Fire Brigade (LFB) and Lincolnshire Fire & Rescue
Service (LFR). To put this in perspective, this represents around 11% of
England's front line pumping appliances and associated operational equipment.
The LFB and LFR contracts are the first to be outsourced to the private sector.
The LFB contract was secured in November 2001 and LFR in April 2006. Both
contracts are for 20 years with an estimated total value over the contract
period of approximately #500 million.
Demand for outsourcing Fire and Rescue operational support is driven by recent
changes in legislation that place statutory duties on individual Fire and Rescue
Authorities (FRAs) to respond to a wider range of threats to public safety and
to focus core activities on community safety initiatives whilst operating in an
environment striving for improved efficiency and cost reduction.
AssetCo provides operational excellence, long term capability, and sustainable
managed service solutions for the Fire and Rescue Service. The Group has an
enviable track record in exceeding critical service level agreements and an
in-depth operational infrastructure expertise which is unrivalled in the market
place. As the provider of the only two contracts of this type so far awarded in
the UK it is well positioned for success in this new and growing market.
Emergency Equipment Division
In addition to a current client base that includes all the UK's FRAs and other
Emergency Service agencies, this division provides the equipment required to
support the managed service requirements of the Emergency Services Division.
AssetCo's Emergency Equipment Division is the result of the Group's successful
history of strategic acquisitions. It comprises Papworth Specialist Vehicles -
specialists in the design, build, conversion and assembly of emergency vehicles,
acquired in 2003 and Fire Safety Equipment (FSE), a distributor of hydraulic
rescue equipment acquired in December 2006. This division also includes AS Fire
and Rescue, Collins Youldon, and Todd Research, all market leading equipment
suppliers which were part of Asfare Group plc.
Our fast, focused and successful integration of these complementary businesses
has brought together leading manufacturers and distributors and provides our
clients with the most comprehensive range of equipment available from one
supplier. In addition to the value added service this brings our clients in the
Fire and Rescue Authorities, Ambulance Trusts and Police Authorities, our
approach has enabled AssetCo to exercise greater control over the supply chain
and equipment costs, an essential component of delivering high availability,
high performance managed service contracts.
With the integration and organisation of these companies as one specialist
division, AssetCo is now an approved supplier of essential equipment into the
Fire and Rescue Service, and an approved vehicle supplier to the police services
and NHS. From this platform the Group is strongly positioned to expand its
services portfolio throughout the wider UK and global Emergency Services
markets.
Current Trading
Trading in quarter one is ahead of the Board's expections. Trading conditions
around the Group remain favourable and opportunities are increasing in all key
areas of business activity.
Outlook
AssetCo has critical mass in terms of people, expertise, experience, turnover
and profit. It has first mover advantage in the supply of outsourced fire
brigade services and is a key product supplier to the sector throughout the UK
and beyond.
The value AssetCo can contribute has now been proven and with eight FRAs in
advanced stages of evaluating the move to an outsourced model, the immediate and
long term future for AssetCo has never looked better. We therefore enter the new
financial year with optimism and confidence.
Timothy Wightman
Chairman
Report of the Chief Executive Officer
Introduction
The first full year following the AssetCo Group Limited Management Buy-in/
Buy-out in October 2005 has been a challenging but thoroughly rewarding period
as we continue to deliver the strategy of repositioning the business from its
utility fleet management origins into a provider of support services to the Fire
and Rescue and broader Emergency Services market. We have established a solid
platform from which to deliver our forecast organic growth and to continue to
identify value enhancing acquisitions.
As outlined in the Chairman's statement, the Group will now report on a
divisional basis both to reflect our market positioning and maximise
transparency. Similarly, as acquisition accounting has been adopted the
statutory accounts include Asfare for the full financial year and AssetCo for
one day post transaction, we have provided combined pro forma statements for the
whole year.
Pro-forma Financial Performance
Our business model has been created to deliver long term sustainable earnings.
For the year to 31 March 2007 we delivered EBITDA of #19.6m and pre-tax profit
before amortisation of #6.4m against forecasts of #17.9m and #6.2m respectively
as contained within the Admission Document.
The audited consolidated profit and loss account shows a profit before tax of
#726,000, an increase of #368,000 over the previous year. EBITDA, excluding
exceptional redundancy costs of #267,000, was #1.4m.
Integration
We are pleased with the progress being made integrating the AssetCo and Asfare
businesses, which is on target. Our integration efforts have concentrated on
enhancing our service delivery capabilities through focussed investment,
co-ordinating product sales across the Group and accelerating our research and
development programmes.
Emergency Services Division
Our strategy is to build this support services division into an international
business which meets the needs of a world where demands now range from routine
fire and rescue emergencies to the very real likelihood of terrorist attacks.
There are 59 FRAs in total in the UK and only two have awarded contracts to date
- both to AssetCo. In addition to building revenue streams from these existing
contracts our objective is to gain further FRA managed service contracts,
building on our first mover advantage.
In the UK we currently supply the London Fire Brigade (LFB), the third largest
Emergency Service in the world, and Lincolnshire Fire and Rescue Service (LFR),
one of the largest rural FRAs in the UK.
The LFB contract had an initial value of #292m which is now estimated to be
#400m. This increase in value is derived from the demand for more services and
additional equipment as a result of the growth in responsibilities experienced
by the Fire Service as a whole, as well as the purchase of new services
introduced by AssetCo. We are also engaged in a number of other projects with
both London and Lincolnshire which provide new revenue opportunities beyond the
scope of these initial contracts.
Of the remaining 57 FRAs in the UK, eight are currently in advanced stages of
evaluating the move to an outsourced model for their Fire and Rescue equipment
and related services.
A contract is also being tendered for the supply of a National Resilience
managed service as part of the Government's New Dimension programme.
These projects have a potential whole life value of approximately #600 million
over 20 years. The first of these contracts, in line with our forecasts, is
expected to be awarded at the end of 2007, with the balance being awarded during
2008/9.
Market conditions continue to offer improved prospects for the Group's services
and, in particular, the Managed Service offering.
The Fire and Rescue Services (FRS) depend on the Comprehensive Spending Review
(CSR) to set budgets for forthcoming years. Currently there is a delay in
announcing the 2008/9 budget levels and, when announced, these are expected to
be at a 'standstill' creating yet further pressure on Service spending. This is
at a time when the FRAs are being asked to take on more and more
responsibilities in line with the National Framework targets. Additionally the
theme of diversity continues to build pace in the Fire Service and will begin to
have an impact on the design of vehicles and equipment and the associated
methods of operation - all creating a need for further investment. We therefore
see these pressures adding to the interest in the Group's services with the
following outcomes:
1. The CSR delay and standstill settlement are likely to constrain FRAs'
budgets yet further. Implication: Chief Fire Officers will review non core
activities more aggressively and, for the first time, be forced to give serious
consideration to the more cost effective AssetCo solution.
2. The drive for diversity in the FRAs is adding complexity. Implication:
complexity drives up cost and requirement and, against a background of limited
expenditure, our managed service model will become more attractive.
3. Individual FRAs are looking to collaborate with neighbouring authorities
to increase efficiency. Implication:- Groups of FRAs will combine to outsource
requirements. Potentially, after a collaboration phase, our pipeline could
accelerate as clients come to market in larger groups.
Whilst the FRS remains our core revenue source within this division we continue
to build upon and extend our services to other Emergency Service providers where
our business model and product offering can offer significant benefit. These
include the police and ambulance services to which we currently provide support
under our Emergency Equipment Division in terms of vehicle build and assembly.
The Emergency Services Division will be looking to benefit from these existing
relationships.
Given that potential clients are faced with expenditure constraints, growing
complexity through wider remits and the diversity agenda, and the drive for
greater efficiency (better value for money), it is not surprising they often
need assistance in evaluating their options. The ability to provide independent
advice on 'best practice and best value' is an obvious but valuable entry point.
In order to support these client evaluations and bolster the management of this
entry point we acquired Simentra Consulting in April 2007. Simentra is an
established consulting business with a brand in homeland security and civil
contingency planning. We believe this acquisition will enable us to bring
clients to market more rapidly and provide further entry points for the core
product and related services growth.
Emergency Equipment Division
The Emergency Equipment Division was formed principally from the integration of
the Asfare businesses and Fire Safety Equipment (FSE), which was acquired by
AssetCo in December 2006. When combined with Papworth Specialist Vehicles,
acquired in October 2003, we now bring to market a division strategically
focused on delivering a fully integrated product supply chain with extensive
knowledge and experience in the design, build and conversion of specialist
emergency vehicles.
This unique combination enables our clients to select an extensive range of
specialist vehicles and a full range of operational equipment from just one
company.
Our current equipment range includes market leading products such as Holmatro
hydraulic rescue equipment, AS Fire and Rescue ladders, gantries, roller
shutters and equipment carriers, Collins Youldon hose reels and a selection of
product variations.
Papworth Specialist Vehicles converted over 2,000 vehicles for police services
and, within the ambulance sector, over 100 front-line and high dependency unit
ambulances were built for NHS, private and charity status clients in 2006. Our
engineering-led approach to providing client solutions saw the launch of a
lightweight van-based ambulance and further progress in operational improvements
to our modular box body conversion.
Papworth Specialist Vehicles was recently awarded a four year framework
agreement for the supply of pumping appliances to the FRS. In addition the
company became an approved NHS supplier for fast response vehicles, a status
already held for Accident and Emergency and Patient Transport vehicles.
Innovation and co-ordinated client account management is key to building this
business and we are currently developing a number of product enhancements as
well as broadening our product portfolio through strategic alliances with best
in class original equipment manufacturers (OEMs).
The forward order book for this division remains strong and we believe it will
continue to grow as the synergies of the division are further leveraged.
Strategy
We are endeavouring to broaden our service capabilities beyond our current
expertise in specialist vehicle and equipment managed services and to replicate
our success in the FRS across the other Emergency Services. We will seek to
identify acquisition opportunities that further embed us in our target markets
and where we may continue to benefit from first mover advantage and where the
opportunities for growth are significant.
Outlook
The agenda of the FRAs will continue to provide the Group with exciting
opportunities and we are well placed to compete for these contracts. The market,
as stated at the time of the Admission Document, is moving swiftly towards full
outsourced services. As the operator of the first two outsourced contracts,
AssetCo is well placed to win a significant percentage of this emerging sector.
AssetCo can now leverage the client relationships held between the Emergency
Equipment Division and its core target of the remaining 57 FRAs which are yet to
outsource their managed services. We will continue to seek to grow the business
both organically and through acquisitions where we can identify opportunities to
increase value to shareholders.
John Shannon
Chief Executive
Report of the chief financial officer
Introduction
I am pleased to submit my first report as the Chief Financial Officer of AssetCo
plc.
The year ended on a successful note with the acquisition of AssetCo Group
Limited by Asfare Group plc (now "AssetCo plc" or "the Group") taking place on
30 March 2007.
As noted by the Chief Executive Officer in his report, by combining Asfare and
AssetCo, the Enlarged Group is ideally placed to capitalise on its first-mover
advantage in total managed services for the Emergency Services.
Accounting treatment
The directors have decided to account for the combination using conventional
acquisition accounting which follows the legal reality of what occurred,
although the transaction qualified as a reverse acquisition under the AIM rules.
Under Rule 14 of the AIM rules, a reverse acquisition would result if, following
the transaction, the company already listed on AIM saw a "fundamental change in
its business, board or voting control". In addition, the AIM rules list a series
of class tests which are used to compare the relative sizes of the combining
entities.
Under UK company law and UK accounting standards, reverse acquisition accounting
is not recognised. To adopt such a method of accounting would require a
departure from the Companies Act and accounting standards and is only justified
in order to give a true and fair view.
The directors believe that the legal reality of the transaction, in which Asfare
Group plc purchased AssetCo Group Limited, should be reflected in the Group's
financial statements. It is the opinion of the directors that by accounting for
the transaction using conventional acquisition accounting, a true and fair view
is achieved.
Although under United Kingdom Generally Accepted Accounting Principles ("UK
GAAP") reverse acquisition accounting is not recognised, this will be the last
set of our financial statements that are prepared using this framework. With
effect from the 1 April 2007, our financial statements will be prepared under
International Financial Reporting Standards ("IFRS") and the treatment of the
acquisition will be revisited.
New capital
As part of the acquisition, 13,793,104 ordinary shares were placed with
institutional investors, representing 20.5% of the share capital of the Enlarged
Group, and #20 million of new cash was raised. The net cash received of
approximately #16.8 million, after deducting costs associated with the takeover,
was used to repay some of the existing borrowings of the Group and to fund
working capital. A sum of #10 million was used to acquire the preference shares
in AssetCo Group Limited which had been retained by the previous owners of that
company.
Shareholder value
At the start of the year, the share price was 78.5 pence. At the time of writing
this has increased to 199.5 pence valuing the Group at approximately #134.1
million.
Review of business
Acquisitions
During the period under review, four additional acquisitions have been
successfully completed.
Collins Youldon
In June 2006, Asfare Group plc acquired the business and assets of Collins
Youldon Limited, a company that manufactures hose reels, cable drums and related
products supplying both the fire and vehicle tanker industries.
Fire Safety Equipment Limited
In December 2006, AssetCo completed the acquisition of the entire issued share
capital of Fire Safety Equipment Limited (FSE). FSE has a long history of
supplying equipment to the emergency market including fire extinguishers,
lighting, fans and pumps. FSE has the rights to distribute hydraulic rescue
equipment manufactured by Holmatro. Holmatro is considered to be a world-leader
in this field.
Simentra Limited
In April 2007, the Group acquired all of the issued share capital of Simentra
Limited. Simentra provides specialist consultancy services to the homeland
security and civil contingency planning markets. Simentra utilises a wide range
of security professionals who have experience at all levels of Emergency
Services operations.
Blue Amber Red Limited
More recently, in June 2007 the Group acquired the entire issued share capital
of Blue Amber Red Limited. The principal activity of Blue Amber Red Limited is
the import, design, manufacture and distribution of specialised lighting to the
Emergency Services market.
Other acquisitions, joint ventures and strategic alliances are currently under
consideration and are focused on broadening our managed service offering to the
Emergency Services market.
Balance sheet
The consolidated balance sheet shows net assets of the Group of #103.9 million.
The goodwill of #112.1 million largely arises from the acquisition of AssetCo
Group Limited (#109.4 million). The directors believe that the value of the
goodwill is supported by the underlying nature and performance of the business
acquired which has two long-term contracts with the London Fire and Emergency
Planning Authority ("LFEPA") and the Lincolnshire Fire and Rescue Service (LFR).
The twenty-year Private Finance Initiative contract with the LFEPA commenced in
February 2001 and was valued at #292 million. This is now estimated to be worth
#400 million over the life of the contract.
In April 2006 the Group commenced a twenty-year contract with LFR. The contract,
worth over #60 million, covers the procurement, supply, maintenance and
lifecycle replacement of LFR's fleet, fire and rescue vehicles and operational
equipment. LFR's vehicles and equipment are currently on contract hire from a
third-party supplier. As these reach the end of their existing contracts, they
will be replaced with vehicles and equipment owned by AssetCo. The replacement
programme is on target to commence in June 2007 and will result in 60 fire
appliances being supplied to LFR over a period of two years.
Both of these long-term contracts are profitable and with remaining lives of 14
and 19 years respectively support the assertion of the directors that
significant value can be attributed to these arrangements.
Research and development projects
As part of our ongoing commitment to delivering the most technologically
advanced equipment to both the LFEPA and LFR, the Group is engaged in research
and development projects that are designed to find innovative solutions to meet
the challenges and changing needs of the Emergency Services sector.
Pro-forma unaudited profit and loss account
As the acquisition took place on 30 March 2007 there is only one day's trading
of the former AssetCo companies incorporated into the consolidated profit and
loss account. In order to aid the reader of the financial statements, is a
pro-forma unaudited profit and loss account which shows the result of the Group
for the year ended 31 March 2007 as though the transaction had occurred on 1
April 2006. The pro-forma statement therefore includes the full year's trading
for both the former AssetCo and Asfare Groups.
On a pro-forma basis, the new Group has delivered a combined turnover of #102.6
million producing a profit before tax of #4.1 million for the year ended 31
March 2007.
EBITDA, before exceptional redundancy costs of #267,000, was #19.6 million.
Pro-forma profit forecast
Our performance compared to the published profit forecast, contained within our
Admission Document, is given below. The forecast figures assume that the
transaction occurred on 1 April 2006 and that a full year's results are combined
for both the former AssetCo and Asfare Groups.
# million Actual Forecast Variance Variance (%)
Turnover 102.6 103.2 (0.6) 0.6
EBITDA 19.6 17.9 1.7 9.5
Profit before tax and
amortisation 6.4 6.2 0.2 3.2
Profit and loss account
The statutory consolidated profit and loss account shows a profit before tax of
#726,000 compared to #358,000 for the year ended 31 March 2006. This represents
an increase of #368,000 (103%). Operating profit increased by #429,000 (100%)
and has been helped by the acquisition of Collins Youldon which has added #2.6
million to turnover during the year.
Earnings per share are 10.6 pence compared to 7.0 pence for the previous year.
Included within the result for the year are exceptional costs of #267,000
relating to the redundancy costs of Tim O'Connor and Tony O'Neill, two former
directors of the Group.
EBITDA, excluding the exceptional redundancy costs, was #1.4 million.
Dividend
A dividend has not been declared during the period. The Board intends to adopt a
progressive dividend policy taking into account the earnings potential of the
Group and the growth and development opportunities available, while maintaining
appropriate levels of dividend cover.
Net debt
Forecast net debt was #52.7 million at 31 March 2007 which is in line with our
actual net debt of #53.5 million.
The Group is currently in negotiations with all providers of finance with a view
to either consolidating existing facilities or extending repayment terms to
mirror the useful economic lives of the underlying assets.
During the year, cash increased by #2.1 million across the Group.
Outlook
Our ongoing focus is to concentrate on the Emergency Services market.
We will continue to strive to reduce the cost base that the Group inherited from
its previous owners with a view to moving to a more variable cost base and we
have now exited the majority of our low-margin fleet management contracts. FY08
will focus on delivering the synergies from the integration of the companies
recently acquired and on the continuous profit improvement programmes in our
core long-term contracts.
Frank Flynn
Chief Financial Officer
Unaudited pro-forma profit and loss account
for the year ended 31 March 2007
2007 2006
#'000 #'000
Turnover 102,562 67,024
Cost of sales (73,879) (54,107)
--------- --------
Gross profit 28,683 12,917
Administrative expenses excluding depreciation and
amortisation (9,064) (4,445)
--------- --------
EBITDA 19,619 8,472
Depreciation (9,493) (5,235)
Interest receivable and similar income 54 96
Interest payable and similar charges (3,771) (1,893)
--------- --------
Profit on ordinary activities before amortisation and
taxation 6,409 1,440
--------- --------
Amortisation (2,336) (1,197)
--------- --------
Profit on ordinary activities before taxation 4,073 243
========= ========
The unaudited pro-forma profit and loss account assumes that both AssetCo Group
Limited and Asfare Group Plc had been trading as one entity since October 2005.
The 2006 comparative figures include the results of AssetCo Group Limited from
October 2005 to 31 March 2006 and a full year's trading of Asfare Group Plc to
31 March 2006.
The audited consolidated balance sheet reflects Asfare Group plc's acquisition
of AssetCo Group Limited
Consolidated profit and loss account
for the year ended 31 March 2007
Note 2007 2006
#'000 #,000
Turnover
Continuing operations 2 7,059 4,092
Acquisitions 2,597 813
--------- ---------
Group turnover 9,656 4,905
Cost of sales (4,436) (2,069)
--------- ---------
Gross profit 5,220 2,836
Administrative expenses (4,335) (2,380)
------------------------------ ------ --------- ---------
Operating profit before goodwill amortisation,
curtailment gain and redundancy costs 1,377 574
Curtailment gain - 141
Goodwill amortisation (225) (259)
Redundancy costs (267) -
------------------------------ ------ --------- ---------
Operating profit
Continuing operations 435 346
Acquisitions 450 110
--------- ---------
Group operating profit 885 456
Interest receivable and similar income 9 8
Interest payable and similar charges (168) (106)
--------- ---------
Profit on ordinary activities before taxation 726 358
Tax on profit on ordinary activities 3 (235) (45)
--------- ---------
Profit on ordinary activities after taxation 491 313
========= =========
Earnings per share
Basic earnings per share 4 10.6p 7.0p
========= =========
Diluted earnings per share
Diluted basic earnings per share 4 10.6p 7.0p
========= =========
All of the above operations are classed as continuing.
Consolidated balance sheet
as at 31 March 2007
2007 2006
#'000 #'000
Fixed assets
Intangible assets 112,123 3,510
Tangible fixed assets 50,879 1,280
-------- ---------
163,002 4,790
-------- ---------
Current assets
Stocks 4,235 697
Debtors 14,052 1,269
Pension scheme surplus 329 -
Cash at bank 10,231 501
-------- ---------
28,847 2,467
Creditors: amounts falling due within one year (34,971) (1,786)
-------- ---------
Net current (liabilities)/assets (6,124) 681
-------- ---------
Total assets less current liabilities 156,878 5,471
Creditors: amounts falling due after more than one year (49,763) (1,443)
-------- ---------
Net assets excluding pension liability and provisions 107,115 4,028
-------- ---------
Provisions (3,206) -
Pension scheme liability (30) (62)
-------- ---------
Net assets 103,879 3,966
======== =========
Capital and reserves
Called up equity share capital 16,800 1,243
Share premium account 17,890 2,346
Merger reserve 68,293 -
Profit and loss account 896 377
-------- ---------
Shareholders' funds 103,879 3,966
======== =========
These financial statements were approved by the Board of Directors on 26 June
2007 and are signed on their behalf by:
R.F. Flynn
Director
Consolidated cash flow statement
for the year ended 31 March 2007
2007 2006
Note #'000 #'000
Net cash (outflow)/inflow from operating activities 5 (7,449) 774
Returns on investments and servicing of finance
Interest received 9 8
Interest paid (168) (92)
New loans issue costs - (18)
-------- ---------
Net cash outflow from returns on investments and
servicing of finance (159) (102)
Taxation (26) (4)
Capital expenditure and financial investment
Purchase of tangible fixed assets (153) (73)
Proceeds from disposal of fixed assets 1,107 -
-------- ---------
Net cash inflow/(outflow) from capital expenditure and
financial investment 954 (73)
Acquisitions and disposals
Purchase of subsidiary undertakings (12,151) (2,168)
Net cash acquired with subsidiaries 2,675 262
-------- ---------
Net cash outflow from acquisitions and disposals (9,476) (1,906)
-------- ---------
Cash outflow before financing (16,156) (1,311)
Financing
Placing costs - (27)
Issue of shares 18,992 694
Receipt of loans - 1,250
Long-term loan repayments (728) (280)
-------- ---------
Cash inflow from financing 18,264 1,637
-------- ---------
Increase in cash 2,108 326
======== =========
Consolidated statement of total recognised gains and losses
for the year ended 31 March 2007
2007 2006
#'000 #,000
Profit for the financial year 491 313
Actuarial gain on the pension scheme 40 34
Deferred tax adjustment on pension deficit (12) (10)
--------- ---------
Total recognised gains and losses in the year 519 337
========= =========
Notes to the financial statements
for the year ended 31 March 2007
Basis of accounting
The financial statements have been prepared in accordance with applicable United
Kingdom accounting standards and under the historical cost convention. The
directors have reviewed the accounting policies adopted by the company and
consider them to be the most appropriate. The accounting policies remain the
same as those of 31 March 2006. As the acquisition took place on 30 March 2007
there is only one day's trading of the former AssetCo companies incorporated
into the consolidated profit and loss account.
Turnover
Turnover is attributable to the principal activity of the Group.
By division
2007 2006
#'000 #'000
AS Fire & Rescue Equipment (1) 7,736 4,092
Todd Research (2) 1,920 813
---------- ----------
9,656 4,905
========== ==========
There were two classes of business for the year:
(1) Manufacture of ladders, gantries and ancillary equipment, sold under several
brand names to emergency and rescue services.
(2) Manufacture of x-ray scanning equipment for post and baggage aimed at the
mail room market.
By geographical market
2007 2006
#'000 #'000
UK 7,754 4,159
Rest of world 1,902 746
---------- ----------
9,656 4,905
========== ==========
No further analysis by division or geographical segment has been provided as, in
the opinion of the directors, such disclosure would be seriously prejudicial to
the commercial interests of the Group.
Tax on profit on ordinary activities
2007 2006
#'000 #'000
UK Corporation tax based on the results for the period at 234 -
30%
Adjustments in respect of prior periods 1 4
--------- ---------
Total current tax 235 4
Deferred tax movement - 41
--------- ---------
235 45
========= =========
Factors affecting the tax charge for the current period:
The current tax charge for the period is different from the standard rate of
corporation tax in the UK of 30%. The differences are explained below.
2007 2006
#'000 #'000
Profit on ordinary activities before tax 726 358
========= =========
Current tax at 30% 218 107
Effects of:
Expenses not deductible for tax purposes 107 45
Losses carried forward (30) (154)
Capital gain on disposal less than accounting profit (47) -
Capital allowances for the year (more)/less than (14) 2
depreciation
Adjustments to prior year 1 4
--------- ---------
235 4
========= =========
Earnings per share
2007 2006
#'000 #'000
Profit after taxation 491 313
Adjustments
Goodwill amortisation 225 1644
---------- ---------
Adjusted profit 716 477
---------- ---------
Number Number
Basic weighted average number of shares 4,667,068 4,496,582
Dilutive effect of ordinary shares:
Share options - -
Warrants - -
---------- ---------
4,667,068 4,496,582
---------- ---------
2007 2006
Basic earnings per share 10.6p 7.0p
Loss per share on goodwill amortisation 3.8p 3.6p
---------- ---------
Adjusted earnings per share 15.4p 10.6p
========== =========
Diluted basic earnings per share 10.6p 7.0p
Diluted loss per share on goodwill amortisation 3.8p 3.6p
---------- ---------
Diluted adjusted earnings per share 15.4p 10.6p
========== =========
The dilutive effect of share options has been calculated in accordance with
accounting standards. For this purpose the fair value of the shares has been
taken as the nominal price of the Group's shares for the year ended 31 March
2007 of 25p. The share warrants and share options are anti-dilutive in the year
as their exercise price exceeds the fair value of the shares.
Reconciliation of operating profit to net cash flow from operating activities
2007 2006
#'000 #'000
Operating profit 885 411
Depreciation and amortisation 354 236
Profit on sale of tangible fixed assets (5) -
(Increase)/decrease in stocks (666) 86
Increase in debtors (485) (226)
(Decrease)/increase in creditors (7,532) 267
--------- ----------
Net cash (outflow)/inflow from continuing operating (7,449) 774
activities ========= ==========
Reconciliation of net cash flow to movement in net debt
2007 2006
#'000 #'000
Increase in cash in the period 2,108 326
Issue of debt (54,246) (962)
--------- ----------
Movement in net debt in the period (52,138) (636)
Net debt at 1 April 2006 (1,329) (693)
--------- ----------
Net debt at 31 March 2007 (53,467) (1,329)
========= ==========
Analysis of changes in net debt
At Cash flows Non cash
movements
1 April 2006 At 31 March
2007
# # # #
Cash in hand and at bank 501 9,730 - 10,231
Overdrafts - (7,622) (7,622)
---------- --------- --------- ---------
501 2,108 - 2,609
Bank loans (1,830) 597 - (1,233)
Finance leases - - (9,427) (9,427)
Other loans - (45,416) (45,416)
---------- --------- --------- ---------
Net debt (1,329) 2,705 (54,843) (53,467)
========== ========= ========= =========
Publication of Non-Statutory Accounts
The financial information set out in this report does not constitute statutory
accounts as defined in section 240 of the Companies Act 1985.
The figures for the year ended 31 March 2007 have been extracted from the
statutory financial statements which will be filed with the Registrar of
Companies. The auditors' report on those financial statements was unqualified
and did not contain a statement under Section 237(2) of the Companies Act 1985.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR PUUMUQUPMGBM
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