10th Jun 2020 11:15
(Alliance News) - Fire & emergency services provider AssetCo PLC on Wednesday reported a swing to an interim loss as it awaits the results of a claim involving its former auditors Grant Thornton LLP.
In the six months to March 31, AssetCo swung to a pretax loss of GBP742,000 from a GBP362,000 profit. It generated no revenue, compared to GBP5.2 million in the year prior.
AssetCo said: "The results for the six months to March 31 are a loss of GBP700,00, reflecting the costs of operating in Abu Dhabi, dealing with business development, and the costs associated with the Court of Appeal hearing during January.
"We have made good progress collecting the outstanding receivables and bonds but the pursuit of new business and gaining new revenues has been slowed considerably by the Covid-19 lockdowns."
Auditing firm Grant Thornton previously appealed a court ruling in AssetCo's favour, with the verdict expected before the summer of 2020.
AssetCo made a negligence claim against its former auditors, which resulted in a trial in June 2018. The verdict was in favour of AssetCo and Grant Thornton was made to pay GBP22.4 million in damages, plus GBP6.5 million in interest and GBP5 million in costs.
Monmouthshire, Wales-based AssetCo said: "We were expecting to hear the result of this appeal at some stage before or in the early part of the summer but have received no indication of when exactly this decision may be.
"We are continuing our presence in the Middle East and awaiting the Court of Appeal's decision in respect of the claim against Grant Thornton. However, the board considers that a large proportion of the cash balances are surplus to these requirements, and although future investments may arise, it may also be appropriate to return surplus cash to shareholders."
AssetCo said it has "strong liquidity" with cash balances of GBP29.6 million.
The company also added that it will call a general meeting where shareholders can vote on a potential capital reduction.
"The board of directors considers that the resolution is in the best interests of the company and its shareholders as a whole and unanimously recommends that shareholders vote in favour of the resolution to be proposed at the general meeting," AssetCo explained.
Shares in the company were 9.4% higher at 350.00 pence each in London on Wednesday.
By Eric Cunha; [email protected]
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