RNS Number : 0394J
AssetCo PLC
27 November 2008
27 November 2008
AssetCo plc
Interim results for the six months ended 30 September 2008
AssetCo plc, (AIM : ASTO), the integrated support services business, announces its interim results for the six months to 30 September
2008
Highlights
* Current contracted order book at record high of �594m
* Income from the core long-term contract with London Fire Brigade for the six
months ended 30 September 2008 increased by 32% to �12.3m (Six months ended 30
September 2007: �9.3m)
* Profit before tax increased by 36% to �6.0m (Six months ended 30 September
2007: �4.4million)
* Underlying profit increased by 64% to �7.7m (Six months ended 30 September
2007: �4.4m)
* Fully diluted earnings per share up by 27% to 6.5p (Six months ended 30
September 2007: 5.1p)
* Net operating cash flow of �12.4m (Six months ended 30 September 2007:
�11.0m)
* Short-term debt exposure restructured, debt potentially repayable within 12
months, excluding asset-finance, reduced from �19m (31 March 2008) to �4m (30
September 2008)
* 64% of the total debt as at 30 September 2008 related to non-recourse asset
finance on our long-term contracts
Commenting, John Shannon, Chief Executive Officer, said:
"We have delivered a strong set of results for the six month period ended 30 September 2008. Our long-term contract activity continues
to broaden in scope and our current order book is at its highest level ever. Despite the current economic climate we remain resilient and
are in a good position to deliver robust, stable profits."
Enquiries:
AssetCo Tel: +44 (0) 20 8515 3999
Frank Flynn, Financial Director
RBS Hoare Govett Limited Tel: +44 (0) 20 7678 8000
Stephen Bowler
John MacGowan
Richard Crichton
Pelham Public Relations Tel: +44 (0) 207743 76670
Alex Walters
Francesca Tuckett
REPORT OF THE CHIEF EXECUTIVE OFFICER
Introduction
The half year to 30 September 2008 has been a period of organisational integration and re-alignment, as we continue to position the
business as the long-term integrated support services partner for the emergency services.
In line with the majority of publicly quoted businesses, we have experienced a significant reduction in our market valuation during the
half year. Notwithstanding this, the underlying visibility and stability in our earnings remain strong, with our current contracted forward
order book at a new high of �594m. Our long-term contract activity continues to broaden in scope and to deliver robust, stable profits, and
remains resilient to the current economic climate.
Financial results for the six months ended 30 September 2008
I am pleased with the performance for the six months ended 30 September 2008 with profit before tax increasing by 36% to �6.0m (Six
months ended 30 September 2007: �4.4m). Fully diluted earnings per share rose by 27% to 6.5p from 5.1p in 2007.
These results have been achieved despite non-recurring losses incurred at UVM and TVAC, reorganisation costs, and investment in our
business development activities in the Middle East. After adjusting for these items, underlying profit for the half year was �7.7m.
Income from our core long-term contract with London Fire Brigade for the six months ended 30 September 2008 increased by 32% to �12.3m
(Six months ended 30 September 2007: �9.3m).
Net assets at 30 September 2008 were �49.8m (�32.7m as at 30 September 2007).
Net operating cash flow was �12.4m (Six months ended 30 September 2007: �11.0m)). After adjusting for the non-recurring items above the
underlying net operating cash flow was �14.1m (Six months ended 30 September 2007: �11.0m)).
We have restructured our short-term debt exposures in the half year. Excluding non-recourse asset finance repayments on our long-term
contracts, we have reduced the debt potentially repayable within 12 months from �19m at 31 March 2008 to �4m as at 30 September 2008.
64% of our total debt as at 30 September 2008 related to non-recourse asset finance on our long-term contracts.
Despite the adverse stock market conditions, our defined benefit pension scheme continues to operate a healthy surplus.
Current Trading
Significant and continued development work in collaboration with our key clients has extended the nature of our contract profile to
embrace new areas of service provision, in line with our integrated service offering, and has resulted in new business opportunities to the
value of �100m, which include Integrated Logistics and ICT projects. Our current contracted forward order book is at its highest level ever
of �594m.
We have also begun to deliver elements of our integrated service offering to London's other two emergency services.
UVM has successfully tendered for and won every UK Accident and Emergency Vehicle contract available during the half year, including new
clients such as London Ambulance Service. The business now has a record order book and revenue visibility through to 2012.
Since the half-year end, TVAC has continued to make losses and absorb cash. The Board has instigated a strategic review of the business,
which will be concluded shortly.
Other acquisitions continue to perform in line with the Board's expectations, and will be fully integrated by the end of the current
financial year.
We continue to support business development activity outside the UK, particularly in the Middle East, where we are increasing our
investment with the intention of securing long term contracts.
Dividend
The Board will review the dividend for the current financial year when considering the full year results.
Strategy
The emergency services market in the UK continues to seek the most economic yet resilient supply of leading edge equipment, technology,
personnel and operational support available.
Our strategy is to focus solely on those essential support services responsible for high proportions of our client's cost base and
where, as supply innovators and integrators, we can offer benefit, either directly through economies of scale, or indirectly through
long-term gain-share partnerships.
Overseas we continue to respond to interest from a number of developed and emerging nations keen to equip and resource their emergency
operations with skills, tools and support at the level enjoyed by our UK partners.
Organisation
We aim to provide emergency service clients with the optimum blend of support products and services to enable them to benefit from
improved operational or financial performance. Niche acquisitions and investments during the previous year have expanded and extended our
capability in this field, to the extent we are now at the forefront of supply to a sector that procures a complex mix of:-
* People and skills
* Training
* Vehicles
* Equipment
* Information and communications technology
We now have a new senior operational management team structure which has made great strides in completing the integration of these
commercial assets and pools of expertise to provide streamlined processes and communication internally, and seamless service with clearer
and more direct points of entry for clients, externally. We have also improved the integration of our services and products during the last
six months.
London Fire Brigade and Lincoln Fire and Rescue Service clearly benefit from having one comprehensive suite of integrated support
services. We have established a new Partnership Management Board with our key client, London Fire Brigade, to open up new joint working
projects, which will deliver operational and financial benefit to both organisations over the medium term.
Other client feedback has encouraged us to offer a menu of support service options under a single AssetCo brand, thus allowing our
clients to select whatever they need at any particular point in time.
Our ability to now offer our products and services in discreet bundles reduces the need for our clients to enter into long, complex, and
expensive tendering processes. Now, leveraging off our existing contract supply arrangements, we are able to offer comparable service and
cost benefits to organisations throughout the Fire and Rescue, and other emergency services, on similar terms, helping with a range of
support options to address both capital and revenue budget challenges.
Outlook
Our long-term contract activity continues to broaden in scope and to deliver robust, stable profits, and remains resilient to the
current economic climate.
While we understand the effects of global economic pressures on public spending, we also recognise the opportunities it presents across
the sector for suppliers capable of delivering the highest levels of economic value.
The UK emergency services have an outstanding reputation overseas. Our role as an integrated support services partner for all three of
London's emergency services has attracted great interest from a number of overseas agencies trying to emulate the London operational model.
The Board believes the company is well placed to take advantage of new market opportunities at home and overseas.
John Shannon
Chief Executive Officer
27 November 2008
CONSOLIDATED INTERIM INCOME STATEMENT (UNAUDITED)
Six months ended
30.9.08 30.9.07
�*000 �*000
Revenue 45,251 25,973
Cost of sales (25,747) (12,105)
-------------------- --------------------
----------------- -----------------
Gross profit 19,504 13,868
-------------------- --------------------
----------------- --------------
Administrative expenses (10,243) (6,822)
Administrative expenses * 200 (281)
share-based payments
-------------------- --------------------
----------------- ---------------
(10,043) (7,103)
Other gains 200 -
Restructuring costs (554) -
-------------------- --------------------
----------------- ---------------
Operating profit 9,107 6,765
-------------------- --------------------
----------------- -----------------
Finance income 440 96
Finance costs (3,534) (2,453)
-------------------- --------------------
----------------- -----------------
Profit before taxation 6,013 4,408
-------------------- --------------------
----------------- -----------------
Taxation (1,142) (883)
-------------------- --------------------
----------------- -----------------
Profit for the period from continuing operations 4,871 3,525
-------------------- --------------------
----------------- -----------------
Discontinued operations
Profit for the period from discontinued - 260
operations
-------------------- --------------------
----------------- -----------------
Profit for the period 4,871 3,785
==================== ====================
=== ===
Earnings per share (pence)
From continuing operations
Basic 6.5p 5.2p
------------------------------------- --------------------
-----------------
Diluted 6.5p 5.1p
------------------------------------- --------------------
-----------------
From continuing and discontinued operations
Basic 6.5p 5.6p
------------------------------------- --------------------
-----------------
Diluted 6.5p 5.5p
------------------------------------- --------------------
-----------------
CONSOLIDATED INTERIM BALANCE SHEET (UNAUDITED)
30.9.08 30.9.07
Note �*000 �*000
ASSETS
Non-current assets
Property, plant and equipment 80,204 74,497
Goodwill 5 54,060 38,738
Other intangible assets 1,610 144
Investment in associates 414 -
Deferred tax asset 1,817 -
Retirement benefit surplus 429 329
-------------------- --------------------------
----------------- -----------
138,534 113,708
-------------------- --------------------------
----------------- -----------
Current assets
Inventories 8,160
3,043
Trade and other receivables 15,678
12,232
Cash and cash equivalents 10,880
11,854
Derivative financial 2,190
-
instruments
-------------------------------------
-----------------------------------
36,908
27,129
-------------------------------------
-------------------------------------
Total assets 175,442
140,837
=======================
=======================
EQUITY
Attributable to equity holders of the Company
Issued share capital 18,104
16,800
Share premium account 25,584
17,890
Reverse acquisition reserve (11,701)
(11,701)
Hedge reserve 1,577
-
Translation reserve 356
-
Other reserve 184
281
Retained earnings 15,659
9,411
------------------------------------
------------------------------------
Total equity 49,763
32,681
------------------------------------
------------------------------------
LIABILITIES
Non-current liabilities
Borrowings 81,714
75,012
Deferred income tax liabilities 7,082
3,958
Retirement benefit obligations -
42
------------------------------------
------------------------------------
88,796
79,012
------------------------------------
------------------------------------
Current liabilities
Trade and other payables 23,191
16,416
Current income tax liabilities 237
285
Borrowings 13,455
12,443
------------------------------------
------------------------------------
36,883
29,144
------------------------------------
------------------------------------
Total liabilities 125,679
108,156
------------------------------------
------------------------------------
Total equity and liabilities 175,442
140,837
=======================
=======================
CONSOLIDATED INTERIM STATEMENT OF CHANGES IN EQUITY (UNAUDITED)
Share Share Reverse
Retained Total
capital premium acquisition Hedging reserve Translation
reserve Other earnings equity
account reserve
reserve
�'000 �'000 �'000 �'000
�'000 �'000 �'000 �'000
At 1 April 2007 16,800 17,890 (11,701) -
- - 5,626 28,615
Profit for the period - - -
- 4,066 4,066
Movement relating to share
(281) -
based payments
281
-------------------- -------------------- -------------------- --------------------
-------------------- -------------------- -------------------- --------------------
---------------- ---------------- ----------------- -----------------
----------------- ----------------- -------------- -----------------
At 30 September 2007 16,800 17,890 (11,701) -
- 281 9,411 32,681
-------------------- -------------------- -------------------- --------------------
-------------------- -------------------- -------------------- --------------------
---------------- ---------------- ----------------- -----------------
----------------- ----------------- -------------- -----------------
At 1 April 2008 17,958 25,197 (11,701) 1,577
356 384 11,506 45,277
Profit for the period - - - -
- - 4,671 4,671
Shares issued in the period 146 387 - -
- - - 533
Movement relating to - - -
200 -
share-based payments -
- (200)
Dividends paid - - - -
- - (718) (718)
-------------------- -------------------- -------------------- --------------------
-------------------- -------------------- -------------------- --------------------
---------------- ---------------- ----------------- -----------------
----------------- ----------------- -------------- ----------------
At 30 September 2008 18,104 25,584 (11,701) 1,577
356 184 15,659 49,763
==================== ==================== ==================== ====================
==================== ==================== ==================== ====================
= = = =
= = = =
CONSOLIDATED INTERIM CASH FLOW STATEMENT (UNAUDITED)
Six months ended
30.9.08 30.9.07
Note �*000 �*000
Cash flows from operating activities
Cash generated from operations 4 5,931 9,969
Finance costs (3,534) (2,529)
-------------------- ------------------------------------
----------------
Net cash generated from operating activities 2,397 7,440
-------------------- -------------------------------------
-----------------
Cash flows from investing
activities
Acquisition of subsidiaries, net of cash acquired - (1,879)
Purchase of intangible assets (34) (100)
Purchases of property, plant and equipment (7,039) (28,041)
Proceeds from sale of property, plant and equipment 3,846 180
-------------------- ------------------------------------
----------------
Net cash used in investing activities (3,227) (29,840)
-------------------- ------------------------------------
----------------
Cash flows from financing activities
Net increase in borrowings 8,084 27,335
Net increase in/(repayments of) finance leases 1,975 (3,408)
Finance income 440 96
-------------------- ------------------------------------
----------------
Net cash gained in financing activities 10,499 24,023
-------------------- ------------------------------------
----------------
Net increase in cash, cash equivalents and bank overdrafts 9,669 1,623
Cash, cash equivalents and bank overdrafts at beginning of 394 5,232
period
-------------------- ------------------------------------
----------------
Cash, cash equivalents and bank overdrafts at end of period 10,063 6,855
==================== =====================
=
NOTES TO THE INTERIM FINANCIAL STATEMENTS (UNAUDITED)
1. Legal status and activities
AssetCo plc ("the Company") and its subsidiaries (together "the Group") are principally involved with the provision of integrated
support services to the emergency services market.
The Company is a public limited liability company incorporated and domiciled in England and Wales. The address of its registered office
is 800 Field End Road, South Ruislip, Middlesex HA4 0QH.
The Company has its primary listing on the Alternative Investment Market ("AIM") of the London Stock Exchange.
The Company's accounts for the year ended 31 March 2008 have been delivered to the Registrar of Companies. Those accounts have received
an unqualified audit report which did not contain statements under Section 237 (2) and (3) of the Companies Act 1985.
These financial statements are not statutory accounts within the meaning of Section 240 of the Companies Act 1985.
These Group consolidated interim financial statements were authorised for issue by the Board of Directors on 27 November 2008.
2 Basis of preparation of the interim report
The accounts comply with the AIM Rules and have been prepared on a basis consistent with the revenue and recognition principles of
International Financial Reporting Standards ("IFRS"). The interim financial information has been prepared on a basis which is consistent
with the accounting policies adopted by the Group for the last financial statements and should be read in conjunction with these financial
statements. The Group has chosen not to adopt IAS 34, "Interim Financial Reporting".
The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also
requires management to exercise its judgement in the process of applying the Group's accounting policies.
NOTES TO THE INTERIM FINANCIAL STATEMENTS (UNAUDITED)
3. Primary segment information
The Group is organised into one integrated business unit, Emergency. The legacy non-core business of fleet management is separately
disclosed as Non Emergency.
All assets and liabilities of the Group are allocated to individual segments.
Six months ended 30 September 2008
Emergency Consolidation Group
Non Emergency adjustment
�'000 �'000 �'000 �'000
Continuing operations
Segment revenue 42,667 2,584 - 45,251
==================== ==================== ===================== =====================
= =
Segment result 5,713 100 200 6,013
==================== ==================== ===================== =====================
= =
The consolidation adjustment relates to a credit in respect of share-based payments (�200,000).
Six months ended 30 September 2007
Emergency Consolidation Group
Non Emergency adjustment
�'000 �'000 �'000 �'000
Continuing operations
Segment revenue 21,279 4,694 - 25,973
==================== ==================== ===================== =====================
= =
Segment result 4,896 (207) (281) 4,408
==================== ==================== ===================== =====================
= =
The consolidation adjustment relates to a charge for share-based payments (�281,000).
4. Reconciliation of profit before tax to net cash generated from operations
Six months Six months
ended ended
30.9.08 30.9.07
�'000 �'000
Profit before taxation 6,013 4,668
Adjustments for:
- Depreciation 3,286 4,199
- Profit on disposal of (200) -
property, plant and equipment
- Increase in share-based (200) 281
payments
- Movement in provisions (428) -
- Finance income (440) (96)
- Finance costs 3,534 2,529
Changes in working capital
- Inventories (5,117) 1,192
- Trade and other receivables (3,446) 1,820
- Trade and other payables 2,929 (4,624)
-------------------- ---------------------------
-------
Cash generated from operations 5,931 9,969
==================== =====================
=
5. Goodwill
Goodwill has increased by �2.138m since 31 March 2008. This reflects the finalisation of acquisition accounting adjustments relating to
certain acquisitions in the past 12 months.
6. Dividend paid during the period
A dividend relating to the year ended 31 March 2008 of 1.0 pence per share was paid on 26 September 2008. This amounted to �718,000.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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