REG - AssetCo PLC - 2024 Half-year report for six months ended 31/3/24
28/06/2024 07:00
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RNS Number : 2521U AssetCo PLC 28 June 2024
28 June 2024
LEI: 213800LFMHKVNTZ7GV45
AssetCo plc
("AssetCo" or the "Company")
2024 Half-year Report
for the six months ended 31 March 2024
Registered number: 04966347
Highlights
· Operating loss reduced by 65% to £1.6m after adjusting for exceptional items
(£1.0m) and before discontinued operations (£0.5m) demonstrating good
progress towards profitability following sustained action to reduce costs.
· The total loss for the period was £3.0m.
· Proposed share split with the introduction of a second class of share designed
to reflect the Company's economic interest in Parmenion. Existing shares to
track the interest in the core equities business, and Company name to change
to River Global PLC as a result.
· New business flows for the quarter ending 30 June 2024 expected to be
positive, being £39m at 27 June.
· Completion of the acquisition of Ocean Dial Asset Management, adding an
estimated £0.9m per annum in net new revenue to the Group from 2 October
2023.
· Good progress in consolidating and simplifying the business with all equity
investment management activities (ex Ocean Dial) consolidated to River Global
Investors.
· Clear plans established for consolidating back office service providers and
for bringing Authorised Corporate Director responsibilities under a single
Group entity, simplifying on-going operations and delivering cost/revenue
benefits.
· Previously announced cost savings plan on track with some further enhancements
to revenue generation and additional cost saving initiatives outlined,
resulting in a potential pathway to Group profitability on the assumption of
relatively stable revenues.
· Completed the exit from the loss-making Infrastructure business (losses £2.4m
in financial year ended September 2023).
· Good active equities investment performance over 1, 5 and 10 year time
periods.
· Relatively stable equity assets under management over the period.
· Strong progress at Parmenion with Assets under Management and Advice now
approaching £12bn (£10.6bn as at end March 2023).
Martin Gilbert, Chairman of AssetCo, commented:
"The six months to end March 2024 has been a pivotal one in our journey
towards profitability and cash generation. The work done in simplifying our
business by consolidating equity asset management activities and exiting loss
making and complex early stage businesses has helped clear a pathway towards
profitability which, with continued hard work and effective execution of our
cost saving plan, is starting to look eminently achievable. There remains a
dependency on stable revenues but, in that context, it is particularly
pleasing to note a couple of substantive and notable wins in UK equities with,
finally, some tentative signs of improvement in market sentiment towards the
asset class.
I am also pleased to confirm that we are in advanced discussions to partner
with two organisations to leverage our expertise and infrastructure to mutual
benefit. These potential joint ventures are quite different (one working with
an established overseas wealth manager and one bringing a leading global fund
manager to market) but both would utilise our established infrastructure to
facilitate additional growth. Assets under management are expected to be
significant at an early stage and, while initial revenues to the Group are
reduced reflecting the role we play in each case, the additional scale and
future opportunities are attractive as is the opportunity to work with high
calibre individuals and businesses.
Continuing revenues for the six months ended 31 March 2024 of £6.9m (31 March
2023 Restated: £7.1m) have held up relatively well in a turbulent period and
the business, while still loss-making, has demonstrated real progress towards
profitability, making excellent progress in cost cutting since last year."
For further information, please contact:
AssetCo plc Deutsche Numis
Gary Marshall, CFOO Nominated adviser and joint corporate broker
Martin Gilbert, Chairman Giles Rolls / Charles Farquhar
Tel: +44 (0) 7788 338157 Tel: +44 (0) 20 7260 1000
Panmure Gordon (UK) Limited H/Advisors Maitland
Joint corporate broker Neil Bennett / Rachel Cohen
Atholl Tweedie Tel: +44 (0) 20 7379 5151
Tel: +44 (0) 20 7886 2500
For further details, visit the website, www.assetco.com
Ticker: AIM: ASTO.L
Chairman's Statement
The six months ended 31 March 2024 saw no let up in market pressure. Although
most stock markets saw some uplift in value, investor sentiment remained weak
and fund flows across the industry remained consistently negative for the
period, with industry outflows exceeding £16bn.
The AssetCo Group of companies was sadly not immune from these pressures and
the Group saw outflows over the period. The general rise in markets has
cushioned the effect to some extent, but the net effect was still to reduce
assets under management by some £200m. The acquisition of Ocean Dial Asset
Management was a welcome positive offset to that, adding c.£166m at the
beginning of October.
Progress in Consolidation
Substantial progress was made in business integration with all equity asset
management activities (ex Ocean Dial) centralised and operating out of River
Global Investors LLP (previously River and Mercantile Asset Management LLP)
from the end of calendar year 2023. This has enabled us to move forward with
our plans to expand the activities of SVM Asset Management as Authorised
Corporate Director which will eventually cover all the UK open-end funds for
the Group and we are progressing a joint venture arrangement with the current
ACD for River Global funds, Equity Trustees Fund Services, in order to do so
efficiently. Agreement has been reached in principle for the consolidation of
back office services (those of Depositary, Custodian and Transfer Agency)
under a single provider for our UK funds. This will bring operational
efficiencies and cost savings which it is hoped will take full effect around
our financial year end. It will also allow us to complete the exercise of
re-branding all of our operational entities and funds.
Prospects for Profitability
Run rate annual revenues for the Group (excluding Infrastructure) stood at
c.£14.3m at end March 2024 while cost savings set in train before 2023
financial year end aimed to deliver a run rate cost base of c.£18m pa by end
of calendar year 2024. This is before accounting for the £2.6m of interest
expected in respect of the Group's loan note interest in the Parmenion
business, which is paid in kind (as additional loan notes). Further cost
savings of c.£3m were identified after financial year end and are now in
course of execution and the back office consolidation and ACD implementation,
together with further fund rationalisation, are estimated to enhance revenues
by c.£0.6m. Taking all these initiatives together and with some yet further
cost saving actions in prospect, a clear route to run rate profitability is in
prospect so long as revenues remain relatively stable.
Pipeline Business
We were pleased, shortly after period end, to secure two substantial new
business wins: one, at over £100m, into our UK Opportunities Fund which has
funded and one, at around £20m, into our UK Smaller Companies Fund which has
been notified but not yet funded at time of writing. These are the first major
mandate wins for us in a considerable period and we hope that they signal a
greater interest in our investment proposition and a more positive attitude
towards the UK equities market generally.
Financials
The Income Statement for the six months ended 31 March 2024 shows continuing
revenue of £6.9m (31 March 2023 restated: £7.1m) and a loss before taxation
of £3.0m (31 March 2023 restated: loss £14.5m) which underlines the progress
we have made in cost cutting since last year.
Comparison to the previous six-month period is again not straightforward due
to changes in the business. The six months to 31 March 2023 did not include a
full six months of SVM, which acquisition completed at the end of October 2022
but did include the business of Rize ETF which was disposed of just prior to
October 2023, whereas the six months to 31 March 2024 includes a six month
contribution from Ocean Dial. The comparison therefore illustrates the benefit
to the business of substituting the profitable Ocean Dial business for the
loss making Rize one.
Total (balance sheet) assets at 31 March 2023 were £60.7m (31 March 2023:
£86.5m) reflecting, in particular, the impact of the significant write downs
and other costs of exiting discontinued businesses as well as the
re-structuring costs incurred during the course of the previous financial
year. The Group held cash of £11.2m and c.£1.7m in treasury shares (at 31
March 2024 share price) at period end.
Continuing to Evolve the Business
We were pleased, at the beginning of October, to complete the acquisition of
Ocean Dial Asset Management Limited. Ocean Dial's current business is the
management of the assets of the India Capital Growth Fund Limited, which, as
at end May 2024, had a net asset value in excess of £150m and an annualised
run rate revenue of £1.8m. The acquisition has added c.£0.9m pa in net
revenue to the Group and the business is already well integrated albeit
further synergies which will be achievable upon full consolidation into River
Global Investors in due course. The acquisition is notable both for the access
it gives us to investment capability in the world's most populous nation and
the partnership it brings with the India Capital Growth Fund Limited.
We announced in October 2023 that agreement had been reached in principle to
dispose of the River and Mercantile Infrastructure business. The original
agreement did not reach completion and instead a rather simpler arrangement
was eventually made which completed at the end of May 2024.
Parmenion
The six month period to 31 March 2024 saw further progress for Parmenion and
culminated with group Assets under Advice or Management of £11.7bn compared
with £10.6bn at the same time last year. It is encouraging to observe that
the business is strongly cash generative and we look forward to continued
progression in revenues and EBITDA for Parmenion in 2024.
Name Change and Future Plans
Over the past eighteen months AssetCo's business interests have been
simplified considerably and now comprise the wholly owned equities business,
trading under the River Global name, and our structured equity interest in the
Parmenion platform. The Board believes that the factors driving value in these
two lines of business differ significantly in terms of both quantum and timing
and that, as a result, they have the potential to appeal to quite different
types of investor. In order to better reflect this, and to fully realise the
benefit that might result from allowing new and existing investors to access
these different value profiles directly, the Board is planning to publish
proposals for a share split shortly.
These proposals will give every shareholder a second class of share which will
be designed to reflect the Company's economic interest in Parmenion. It is not
expected that these shares will be traded on AIM but will be able to be traded
on a matched bargain basis more suitable to the nature of the underlying
interest. The Company's existing shares will as a result, track the interest
in the equities business. In view of this, we are also planning to publish
proposals to change the name of the Company to River Global PLC. The Board
expects to issue a formal Circular to shareholders seeking approval for these
changes in Q3 2024.
Outlook
While market conditions remain challenging, we remain on track to deliver
significant cost savings from the Group by calendar year-end. This, combined
with the strong performance of many of our funds and the fact that we continue
to see numerous avenues for profitable growth, give us continuing confidence
in the future of the business.
Martin Gilbert
Chairman
28 June 2024
BUSINESS REVIEW
The chart below shows the movement in active equities assets over the period
which includes the addition of assets managed by Ocean Dial Asset Management
at the point of its formal acquisition by the Group on 2 October 2023.
The single biggest detractor during the period was River and Mercantile's loss
of an institutional DC pension fund mandate for c.£114m in March 2024.
Elsewhere, the inherited under-performance of SVM's UK Growth Fund resulted in
significant outflows from that fund prior to its merger into the UK
Opportunities Fund. On the plus side, small additions to existing
institutional mandates for UK and European equity mandates have been pleasing
to see, as has the significant contribution of investment returns to the
assets under management at period end.
Investment performance for the Group's active equities funds has been
resilient over the period, with particularly strong showings over 10, 5 and 1
year periods.
We were particularly delighted to receive the Lipper award for the best Equity
Global Income fund over 3 years for the Saracen Global Income and Growth Fund
at the Lipper award ceremony in late April 2024.
Assets under management have remained relatively stable over the period,
thanks mainly to rises in market values and the addition of assets from Ocean
Dial offsetting net outflows. We continue to be encouraged by the positive
impact our fund rationalisation and other re-structuring work is having on
weighted average fee rates for our wholesale business where the rate has risen
from 60bp at financial year end to 64bp at end March.
Annualised Revenue Breakdown by Business Type (as at 31 March 2024)
Business Type AuM (£m) Weighted average fee rate, net of rebates (bp) Gross annualised revenue net of rebates (£000s)
Wholesale (active equities) 1,523 64 9,817
Institutional (active equities) 623 35 2,172
Investment Trust (active equities) 225 99 2,233
Infrastructure 113 68 771
Total 2,484 60 14,993
This table excludes the Group's structured 30% interest in Parmenion which had
AuM of £11.7bn at 31 March 2024, and generated revenues of £11m for the
period from 1 January 2024.
· Wholesale refers to the active equity assets which are held and managed in
mutual funds distributed by the Group.
· Institutional refers to the active equity assets which are held and managed in
separate accounts on behalf of institutional clients of the Group.
· Investment Trust refers to the active equity assets which are held and managed
in investment trusts which are clients of the Group
Ocean Dial
The Indian Capital Growth Fund managed by Ocean Dial saw a significant
increase in value, reflective of performance in the Indian stock market, in
the period running up to the completion of the acquisition of Ocean Dial on
2(nd) October 2023. The investment performance of the Fund was particularly
strong under the advice of Gaurav Narain and Team, based in Mumbai and UK, and
the Fund's discount narrowed running in to the end of the calendar year. This
was particularly helpful in light of the Fund's second biennial redemption
offered to all shareholders on the register at 30 September 2023. Shareholders
were offered redemption at a 3% discount to net asset value on 29 December
2023 and the discount stood at 3.95% just prior to this, making the redemption
offering a not particularly compelling one. In the event a very small number
of investors elected to redeem, but the largest shareholder surprisingly chose
to do so in full, contrary to prior indications. As a result, c.15% of the
Fund was redeemed at year end - somewhat more than we had expected.
Against this, the large shareholder exit was effectively the last of the
significant investments by "activist" or "value" investors who seek to
actively exploit the discount to generate returns. The remaining shareholder
base is now almost entirely "retail" in nature with the result that trading
and demand is likely to be more consistent and predictable. In fact, with the
largest shareholder gone, the Fund moved to trading at a premium for a period
and the Board decided to issue shares from treasury in order to satisfy
demand. Some £10.7m was issued in a period of c.6 weeks, effectively
recouping some of the redemption cash that was exited.
River and Mercantile Infrastructure LLP ("RMI")
On 6 October 2023 we announced that agreement had been reached in principle
for a transfer of our interest in the Infrastructure business out of the
Group. In the event, that particular agreement did not come into effect for a
variety of reasons, but a revised agreement was reached some months later and
the Group effectively exited the Infrastructure business on 21 May 2024.
In practice, we have exited the business by completing arrangements for a
third party manager to take on the role of advisor to the Fund with Ian Berry
and his RMI colleagues leaving RMI to set up their own advisory business.
This brings to a close AssetCo's infrastructure business: RMI has now
effectively ceased trading and is expected to be wound up in due course. RMI
generated a loss for the business in the full year to end September 2023 of
£2.4m; the cost to exit was c.£0.5m.
Parmenion
Parmenion continues to attract strong ratings for its service, scoring first
place in 6 out of 11 categories in the Defaqto platform service review 2024.
These strong service ratings, together with the addition of a platform
switching service in Q4 2023 and the expansion of DFMs available on platform
throughout the period has resulted in a strong new business pipeline.
Key Performance Indicators
The following table summarises key performance indicators for the business,
illustrating the progression of the business over the period.
End March End March 2023 Movement
2024
Total Assets under Management (excluding Parmenion) £2,484m £3,261m -£777m
Active Equities Assets under Management £2,371m £2,766m -£395m
Total (balance sheet) assets £60.7m £86.6m -£25.9m
Annualised revenue(1) £15.0m £17.9m -£2.9m
Profit/loss for the period -£3.0m -£14.5m +£11.5m
(including exceptionals and discontinued business) (restated)
Operating profit/loss for continuing business excluding exceptionals -£1.6m -£4.6m +£3.0m
(restated)
Investment performance(2) 58% 62% -4% points
(1 year)
Investment performance(2) 36% 86% -50% points
(3 year)
Investment performance(2) 61% 45% +16% points
(5 year)
(1) Monthly recurring revenue at date shown using annualised closing AuM.
(2) % active equity mutual fund AuM in 1(st) or 2(nd) quartile when compared
to competitor funds in relevant Investment Association sectors.
Gary Marshall
Chief Financial and Operating Officer
28 June 2024
Principal Risks and Uncertainties
The Directors continuously monitor the business and markets to identify and
deal with risks and uncertainties as they arise. Set out below are the
principal risks which we believe could materially affect the Group's ability
to achieve its strategy. The risks are not listed in order of significance.
Risk Responsibility and Principal Control
Profitability and Going Concern Status: Board/Executive Team:
Achieving profitability remains the key focus for the Group: failure to The Group continues to cut costs. The Group is focused on achieving run-rate
achieve profitability will impact the Board's ability to meet going concern profitability and the Board monitors costs and cash management carefully to
requirements. The Board and Executive continue to focus on costs, income this end.
generation and cash management.
Distribution: Board/Distribution:
Fund flows continue to prove challenging, consistent with the experience of Distributors and markets are carefully targeted and client relationships
other market participants in the current environment. Detailed discussions monitored to identify and mitigate the risk of loss.
continue with several potential strategic partners which it is hoped will
deliver upside.
Performance and Product: Board/Product/Investment Team:
Sustained underperformance and products falling out of favour would further The Group continually monitors and develops its product suite to ensure that
challenge flows. it remains competitive and attractive. The Investment Team, in conjunction
with Investment Risk, continually monitor fund performance against targets,
including style, taking corrective action where necessary.
Loss of Key People: Board/Remuneration Committee:
The Firm has reduced headcount significantly but will need to ensure retention The Board reviews succession planning for all senior executives. Senior
of key staff if it is to manage Client, Consultant and Regulatory executives are subject to extended notice periods (between six and twelve
expectations. There is increasing reliance on a small number of key staff. months). The Group seeks to offer attractive terms as well as a flexible
working environment. The Group has introduced a new Restricted Share Plan to
help retain senior partners and key staff.
Economic Conditions: Board/Executive Team:
The Listed Equities business remains vulnerable to any material fall in equity The Group seeks to manage an appropriate balance of fixed and variable costs.
markets. As noted above, market rises have cushioned the impact of outflows to In the event of sustained economic downturn, the Group would seek to take
date. early action to cut fixed costs.
Systems and Controls: Board/Operations:
The Group continues to integrate controls and procedures which are being The Group has developed a detailed controls framework which is being rolled
rolled out across the operating subsidiaries. However, the business remains out across operating subsidiaries to create a consistent, harmonised approach.
complex until the end goal operating model is reached and managing multiple The Group is consolidating to a single operating model as well as seeking to
service providers (notably ACDs) has generated challenges including rationalise service providers.
rationalisation costs.
CONSOLIDATED INCOME STATEMENT
For the six months ended 31 March 2024
Six months ended Year ended
Note Unaudited Audited
Unaudited Restated 30 September 2023
31 March 31 March 2023 £'000
2024 £'000
£'000
CONTINUING OPERATIONS
Revenue 4 6,926 7,122 14,979
Cost of sales - - -
Gross profit 6,926 7,122 14,979
Other income 6 1,193 1,075 2,321
Provision against doubtful debt - (1,718) (1,467)
Other administrative expenses 7 (10,885) (12,303) (28,069)
Total administrative expenses (10,885) (14,021) (29,536)
Other gains / (losses) 8 154 - 122
Operating (loss) (2,612) (5,824) (12,114)
Finance income 9 62 2 74
Finance costs (67) (136) (510)
Finance (loss) / income (5) (134) (436)
Share of results of associate - 266 (352)
(Loss) before tax (2,617) (5,692) (12,902)
Income tax credit 10 154 148 195
(Loss) for the period (2,463) (5,544) (12,707)
(Loss) attributable to:
Owners of the parent (2,463) (5,544) (12,707)
Non-controlling interest - - -
(Loss) for the period attributable to continuing operations (2,463) (5,544) (12,707)
DISCONTINUED OPERATIONS
(Loss) from discontinued operation (attributable to equity holders of the 5 (518) (8,971) (13,992)
company)
Total (Loss) attributable to the owners of the parent during the period (2,981) (14,515) (26,699)
Continuing operations (loss) per ordinary share attributable to the owners of
the parent during the period
Basic - pence (restated) 11 (1.72) (3.97) (9.06)
Diluted - pence (restated) 11 (1.72) (3.97) (9.06)
Discontinued operations (loss) per ordinary share attributable to the owners
of the parent during the period
Basic - pence (restated) 11 (0.36) (6.43) (9.98)
Diluted - pence (restated) 11 (0.36) (6.43) (9.98)
Total (Loss) per ordinary share attributable to the owners of the parent
during the period
Basic - pence (restated) 11 (2.08) (10.40) (19.04)
Diluted - pence (restated) 11 (2.08) (10.40) (19.04)
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the six months ended 31 March 2024
Six months ended Year ended
Unaudited Audited
Note Unaudited Restated 30 September 2023
31 March 31 March 2023 £'000
2024 £'000
£'000
(Loss) for the period (2,981) (14,515) (26,699)
Other comprehensive (expense) - - -
Items that may be reclassified to profit or loss - - -
Exchange differences on translating foreign operations - - -
Other comprehensive (expense), net of tax - - -
Total comprehensive (loss)/ for the period (2,981) (14,515) (26,699)
Attributable to:
Owners of the parent (2,981) (14,147) (26,699)
Non-controlling interests - (368) -
Total comprehensive (loss) for the period (2,981) (14,515) (26,699)
CONSOLIDATED AND COMPANY'S STATEMENT OF FINANCIAL POSITION
As at 31 March 2024
Unaudited Audited
Unaudited Restated 30 September 2023
31 March 31 March 2023 £'000
2024 £'000
£'000
Assets
Non-current assets
Property, plant and equipment 84 42 98
Right-of-use assets 1,048 1,969 1,534
Goodwill and intangible assets 16,834 25,798 13,495
Investments in subsidiaries - - -
Investment in associates 25,820 22,318 24,626
Total non-current assets 43,786 50,127 39,753
Current assets
Trade and other receivables 5,242 7,618 5,807
Assets held for sale 379 56 -
Financial assets at fair value through profit and loss 9 44 13
Current income tax receivable - 1,173 1,159
Cash and cash equivalents 11,241 27,548 25,573
Total current assets 16,871 36,439 32,551
Total assets 60,657 86,566 72,304
Liabilities
Non-current liabilities
Lease liabilities 577 1,299 950
Deferred tax liabilities 1,651 1,000 905
Total non-current liabilities 2,228 2,299 1,855
Current liabilities
Trade and other payables 2,973 15,773 14,347
Liabilities held for sale 987 52 -
Lease liabilities 631 750 697
Current income tax liabilities 1,517 1,566 1,465
Total current liabilities 6,108 18,141 16,507
Total liabilities 8,336 20,440 18,362
Shareholders' equity
Issued share capital 1,493 1,493 1,493
Share premium 209 209 209
Capital redemption reserve 653 653 653
Merger reserve 43,063 43,063 43,063
Other reserve 340 - 95
Retained earnings 6,563 22,170 8,429
52,321 67,588 53,942
Non-controlling interest - (1,462) -
Total equity 52,321 66,126 53,942
Total equity and liabilities 60,657 86,566 72,304
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the six months ended 31 March 2024
Share capital Share premium Capital redemption reserve Merger reserve Other reserve Retained earnings Total Non-controlling interest Total equity
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Balance at 1 October 2022 1,493 - 653 43,063 - 43,139 88,348 (1,094) 87,254
Loss for the period - - - - - (14,147) (14,147) (368) (14,515)
Total comprehensive (loss) - - - - - (14,147) (14,147) (368) (14,515)
Shares bought for treasury - - - - - (6,815) (6,815) - (6,815)
Treasury shares used to settle conversion of loan notes - 209 - - - 1,791 2,000 - 2,000
Dividends paid - - - - - (1,798) (1,798) - (1,798)
Unaudited at 31 March 2023 1,493 209 653 43,063 - 22,170 67,588 (1,462) 66,126
Loss for the period - - - - - (12,184) (12,184) - (12,184)
Total comprehensive (loss) for the period - - - - - (12,184) (12,184) - (12,184)
NCI transfer on sale of Rize ETF Limited - - - - - (1,462) (1,462) 1,462 -
IFRS2 share scheme charge - - - - 95 (95) - - -
Audited Balance at 30 September 2023 1,493 209 653 43,063 95 8,429 53,942 - 53,942
Loss for the period - - - - - (2,981) (2,981) - (2,981)
Total comprehensive (loss) for the period - - - - - (2,981) (2,981) - (2,981)
IFRS2 share scheme charge - - - - 245 - 245 - 245
Treasury shares used in ODAM consideration (note 12) - - - - - 1,115 1,115 - 1,115
Unaudited balance at 31 March 2024 1,493 209 653 43,063 340 6,563 52,321 - 52,321
CONSOLIDATED AND COMPANY'S STATEMENT OF CASH FLOWS
For the six months ended 31 March 2024
Unaudited Audited
Unaudited Restated 30 September 2023
Notes 31 March 31 March 2023 £'000
2024 £'000
£'000
Cash flows from operating activities
Cash (outflow) from continuing operations (11,620) (7,128) (11,201)
Corporation tax paid - - (137)
Finance costs - (33) -
Net cash (outflow) from Continuing Operations (11,620) (7,161) (11,338)
Net cash inflow / (outflow) from Discontinued Operations (518) (2,253) 266
Net cash (outflow) from total operations (12,138) (9,414) (11,072)
Cash flows from investing activities
Net cash received from acquisitions 12 (1,822) 2,802 2,801
Finance income 9 62 2 74
Finance costs (67) - (14)
Proceeds from sale of investment at fair value through profit and loss - - 24
Purchase of property, plant and equipment - (22) (114)
Purchase of intangibles - (6) -
Net cash (outflow)/inflow from investing activities (1,827) 2,776 2,771
Cash flows from financing activities
Shares issued for cash - 209 209
Dividends paid - (1,798) (1,798)
Lease payments (367) (454) (630)
Payments for treasury shares - (6,837) (6,837)
Net cash (outflow)/inflow from financing activities (367) (8,880) (9,056)
Net change in cash and cash equivalents (14,332) (15,518) (17,357)
Cash and cash equivalents at beginning of period 25,573 43,066 43,066
Exchange differences on translation - - (136)
Cash and cash equivalents at end of period 11,241 27,548 25,573
NOTES TO THE FINANCIAL STATEMENTS
For the six months ended 31 March 2024
1. General information and basis of presentation
AssetCo Plc ("AssetCo" or the "Company") is the Parent Company of a group of
companies ("the Group") which offers a range of investment services to private
and institutional investors. The Company is a public limited company,
incorporated and domiciled in the United Kingdom under the Companies Act 2006
and is listed on the Alternative Investment Market ("AIM") of the London Stock
Exchange. The address of its registered office is 30 Coleman Street, London,
EC2R 5AL.
The financial statements have been presented in sterling to the nearest
thousand pounds (£000) except where otherwise indicated.
The financial information in the Half-year Report has been prepared using the
recognition and measurement principles of the UK-adopted International
Accounting standards and in conformity with the requirements of the Companies
Act 2006. 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 2024 and are unchanged from those disclosed in
the Annual Report and Financial Statements for the year ended 30 September
2023.
The financial information for the six months ended 31 March 2024 and the six
months ended 31 March 2023 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 2023 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.
Functional and presentation currency
Items included in the financial statements of each of the Company's businesses
are measured using the currency of the primary economic environment in which
the entity operates ("the functional currency"). The financial statements are
presented in sterling (£), which is the Company's and the Group's functional
and presentation currency. There has been no change in the Company's
functional or presentation currency during the period under review.
Foreign operations translation
The financial statements are prepared in sterling. Income statements of
foreign operations are translated into sterling at the average exchange rates
for the period and balance sheets are translated into sterling at the exchange
rate ruling on the balance sheet date. Foreign exchange gains or losses
resulting from such translation are recognised through other comprehensive
income.
Discontinued Operations
During the financial year ended 30 September 2023 the Group sold two separate
operations classified as Discontinued Operations under IFRS 5. These were for
the sale of River and Mercantile Asset Management LLC and Rize ETF Limited.
River and Mercantile Asset Management LLC represented a specific geographic
area of business for the Group (being the USA) and Rize ETF Limited
represented a major line of business for the Group. Both sales completed
within the year ended 30 September 2023 and so qualify as discontinued
operations under the standard for the presentation of these statements.
HELD FOR SALE ASSETS
The Group has classified the Infrastructure business as held for sale for the
six months ending 31 March 2024 and for its comparative six month period
ending 31 March 2023. The results for the business have been shown under
Discontinued Operations for the period and comparative. The audited financials
for the year ended 30 September 2023 have not been amended.
The Infrastructure business operates under two entities, "River and Mercantile
Infrastructure LLP" and "River and Mercantile Infrastructure GP S.a.r.l.". As
at 31 March 2024 there was sufficient conditions for the Infrastructure
business to qualify as held for sale under IFRS5. Please see subsequent events
(note 14) for further information on the Group's exit of the infrastructure
business.
2. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
Estimates and judgements are continually evaluated and are based on historical
experience and other factors, including expectations of future events that are
believed to be reasonable under the circumstances. This note provides an
overview of the areas that involved a higher degree of judgement or
complexity, and of items which are more likely to be materially adjusted due
to estimates and assumptions turning out to be wrong.
a. SIGNIFICANT ESTIMATES
VALUATION OF GOODWILL AND OTHER INTANGIBLE ASSETS
Determining the valuation of goodwill and intangible assets arising from a
business combination under IFRS 3 contains elements of judgement The Group has
acquired customer relationships, acquired brands and computer software
included within intangible assets as part of the business combinations.
IMPAIRMENT OF GOODWILL AND OTHER INTANGIBLE ASSETS AND RECOVERABILITY OF COMPANY'S INVESTMENT IN SUBSIDIARIES
The recognition of goodwill and other intangible assets arising on
acquisitions and the impairment assessments contain significant accounting
estimates. Goodwill is carried at cost less provision for impairment, the
carrying value is tested annually for impairment, or more frequently if any
indicators arise. Other intangible assets are amortised over their useful
economic life and are assessed for impairment when there is an indication that
the asset might be impaired. The impairment test of goodwill and other
intangible assets includes key assumptions underlying the recoverable amounts,
the growth rates applied to the future cash flows and the Group's discount
rate.
ESTIMATION OF CURRENT TAX PAYABLE AND CURRENT TAX EXPENSE IN RELATION TO AN UNCERTAIN TAX POSITION
The Group's corporation tax provision of £1,442,000 relates to management's
assessment of the amount of tax payable on open positions where the
liabilities remain to be agreed with relevant tax authorities - principally
due to the Grant Thornton litigation which concluded in 2021. Uncertain tax
items for which a provision of £1,437,000 is made relates principally to the
interpretation applicable to arrangements entered into by the Group including
the application of carried forward losses before 1 April 2017 driven from HMRC
guidance on this matter. Due to uncertainty associated with such tax items, it
is possible that, on conclusion of open tax matters at a future date, the
final outcome may differ significantly. Whilst a range of outcomes is
possible, the maximum possible tax payable would be £3,437,000 being
£2,000,000 more than currently recognised. At a minimum tax payable could be
£nil resulting in a reduction in liabilities of up to £1,437,000.
b. SIGNIFICANT JUDGEMENTS
ACCOUNTING FOR SUBSIDIARIES
During the prior period (the financial year ended September 2023) AssetCo sold
its shareholding in Rize ETF Limited.
AssetCo held 68% of the equity of Rize ETF Limited. Whilst the founders of the
business had a material stake (which could be increased by 5% percentage
points in the event of a sales "trigger" being met) there was in place a
comprehensive shareholder agreement which conferred considerable control to
the Group via the appointment of Board representation and the way in which key
matters had to be agreed, including the ability to block resolutions as well
as voting patterns and economic dependency. Accordingly we believe it was
appropriate to account for Rize as a subsidiary entity.
At 30 September 2023 Rize ETF Limited was considered sold and no longer owned
by the Group.
RECOVERABILITY OF RECEIVABLES
Advanced drawings and specific other balances in relation to members of a
partnership within the Group are held on the balance sheet as receivables
until there are accumulated profits to distribute to the members. Judgement is
required to assess the likelihood of recoverability of these receivables. At
31 March 2024 the Group has taken a provision of £558,000 against these
receivables (30 September 2023: 1,467,000).
The Board do not consider that any other critical judgements have been made in
preparing the financial statements which have a significant risk of causing a
material adjustment to be made to the carrying amounts of assets and
liabilities within the next financial year.
GOING CONCERN ASSUMPTIONS
Inputs, including stresses, management actions and forecasting all require
significant judgement in concluding on going concern. These have been set out
in more detail in note 3.
HELD FOR SALE ASSETS
As with all assessments of 'held for sale' assets; they require judgement as
to the nature and likelihood of any disposal for the Group. As stated in note
1 the Group has identified the Infrastructure business as held for sale in the
period
3. GOING CONCERN
The Group is currently loss making, albeit with a trajectory that evidences
reducing operational losses over time and which affords a pathway to
profitability. Against this background, the Directors have given careful
consideration to the going concern assumption on which the Group's accounts
have been prepared. Having carefully considered the Group's operational and
regulatory requirements, the Directors have concluded that the Group has
adequate financial resources to continue operating for the 12 months from the
date of signing these financial statements. On that basis the Directors have
continued to adopt the Going Concern basis of accounting in preparing the
consolidated Group and Company accounts.
As part of this review, the Directors have prepared projections rolling
forward more than two years from the date of signing for the Group under
several scenarios from growth to stressed environments. The latter includes a
fall of 30% in assets under management over a twelve month period from the
period end. Those projections were subject to challenge and review to ensure
that appropriate stresses were applied to the projections with key drivers to
the stress scenarios taking account of the principal risks and uncertainties
identified in the Risk Management section of the Strategic Report on page 14
of the 2023 financial statements. For the purpose of this assessment,
management made conservative assumptions regarding future growth, assuming
both nil growth and further reductions in revenue. The ability to achieve cost
saving measures and the reasonableness of the stress testing applied was
considered in the light of those assumptions. Sensitivity analysis and
modelling to take account of specific one-off risks to the Group and Company
was undertaken in line with the principal risks and uncertainties.
In the event that profitability is not achieved, there will be an increased
risk to the going concern assessment in subsequent reporting periods. The risk
should be considered in the context that the Group has no external debt and
had net cash at 31 March 2024 of £11.2m. The Group is required to hold a
minimum level of regulatory capital together with a buffer of at least a 10%
at all times.
The Directors also acknowledge less resilience within the Group to one-off
shocks and macroeconomic events while losses continue. Principal risks and
uncertainties are set out in the Strategic Report of the 2023 Financial
Statements on page 15. Current initiatives will deliver further cost savings
and the Directors are committed to additional cost saving initiatives as
necessary to respond to future business developments. Should there be a need
for additional capital, the directors have the option of seeking to raise
additional capital, of considering potential partnerships or of re-structuring
the business.
4. 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 has historically been presented in respect of the Group's
commercial competencies, Active equities, Infrastructure asset management,
Exchange Traded Funds and its investment in Digital Platforms.
Active equities comprises the River Global equities business; formerly; RMG,
Saracen and Revera; Infrastructure Asset Management is the non-equities
infrastructure investment arm of RMG; Exchange Traded Funds is Rize ETF and
Digital Platforms represents the Group's investment in the associated company,
Parmenion.
The Directors consider that the chief operating decision maker is the Board.
Head Office segment comprises the Group Board's management and associated
costs and consolidation adjustments.
Intra-segment transactions are disclosed on the face of the segmental report.
The amounts provided to the Board with respect to net assets are measured in a
manner consistent with that of the financial statements.
Changes to segmental reporting
By 30 September 2023 the US business has been sold alongside Rize ETF Limited.
In addition, the Infrastructure business has been classified as held for
sale.
Consequently the US business is now presented as a Discontinued Operation for
the purposes of Segmental reporting. Additionally the Exchange Traded Funds
segment (fully encompassed by the now sold Rize ETF Limited) has also been
moved to Discontinued Operations. Finally, depreciation and amortisation have
been removed from the segmental reporting as management no longer places
reliance on its analysis at segmental level.
Further detail of these Discontinued Operations can be found in note 1.
ANALYSIS OF REVENUE AND RESULTS BY COMMERCIAL ACTIVITY
For the six months ended 31 March 2024
Active equities Infrastructure asset management Head office Total
£'000 £'000 £'000 £'000
Revenue
Management fees 6,926 362 - 7,288
Marketing fees - - - -
Total revenue to external customers 6,926 362 - 7,288
Segment result
Operating (loss)/profit (2,473) (518) (139) (3,130)
Finance income 16 - 46 62
Finance costs (49) - (18) (67)
(Loss) on sale of subsidiary - - - -
Share of result of associate - - - -
(Loss)/profit before tax (2,506) (518) (111) (3,135)
Income tax - - 154 154
(Loss)/profit for the period (2,506) (518) 43 (2,981)
Segment assets and liabilities
Total assets 32,117 379 28,161 60,657
Total liabilities (4,068) (987) (3,281) (8,336)
Total net assets/(liabilities) 28,049 (608) 24,880 52,321
For the six months ended 31 March 2023 (RESTATED)
Active equities Infrastructure asset management Digital platform Head office Exchange Traded Funds Total
£'000 £'000 £'000 £'000 £'000 £'000
Revenue
Management fees 7,392 230 - - - 7,622
Marketing fees - - - - 788 788
Total revenue to external customers 7,392 230 - - 788 8,410
Segment result
Operating (loss)/profit (6,115) (1,932) - (503) (6,245) (14,795)
Finance income 2 - - - - 2
Finance costs (30) - - (106) - (136)
(Loss) on sale of subsidiary - - - - - -
Share of result of associate - - 266 - - 266
(Loss)/profit before tax (6,143) (1,932) 266 (609) (6,245) (14,663)
Income tax 144 - - - 4 148
(Loss)/profit for the period (5,999) (1,932) 266 (609) (6,241) (14,515)
Segment assets and liabilities
Total assets 47,592 645 - 25,510 12,819 86,566
Total liabilities (4,781) (851) - (14,489) (319) (20,440)
Total net assets 42,811 (206) - 11,021 12,500 66,126
The segmental reporting table for the six months ended 31 March 2023 has been
restated to reflect the restatement set out in note 6 and to include the sold
ILC business within Active equities representing £195,000 of revenue and
£413,000 of operating loss in the Active Equities segment as now shown.
ANALYSIS OF REVENUE AND RESULTS BY COMMERCIAL ACTIVITY
AUDITED For the year ended 30 September 2023
Active equities Infrastructure asset management Digital platform Head office Discontinued Operations Total
£'000 £'000 £'000 £'000 £'000 £'000
Revenue
Management fees 14,419 560 - - 186 15,165
Marketing fees - - - - 1,557 1,557
Total revenue to external customers 14,419 560 - - 1,743 16,722
Segment result
Operating (loss)/profit (9,415) (2,413) - (2,500) (2,832) (17,160)
Finance income 75 - - 2,213 (6) 2,282
Finance costs (450) - - (60) 6 (504)
(Loss) on sale of subsidiary - (11,160) (11,160)
Share of result of associate - - (352) - - (352)
(Loss)/profit before tax (9,790) (2,413) (352) (347) (13,992) (26,894)
Income tax 19 (11) - 187 - 195
(Loss)/profit for the year (9,771) (2,424) (352) (160) (13,992) (26,699)
Segment assets and liabilities
Total assets 40,456 173 - 31,675 - 72,304
Total liabilities (8,039) (1,013) - (9,310) - (18,362)
Total net assets 32,417 (840) - 22,365 - 53,942
5. Discontinued Operations
Within the year ended 30 September 2023 two businesses were sold and have been
classified as Discontinued Operations under IFRS 5. These are River and
Mercantile Asset Management LLC and Rize ETF Limited. For full details of
these disposals and their impact the year ended 30(th) September 2023 please
refer to the full 2023 financial statements, note 6.
For the period ended 30 March 2024 (and its comparative period) the
Infrastructure business has also been classified as a discontinued asset.
6. Other Income
RESTATED Unaudited Audited
Unaudited 31 March 2023 30September
31 March £'000 2023
2024 £'000
£'000
Interest on loan notes held in associate 1,193 1,075 2,214
Other income - - 107
Total other income 1,193 1,075 2,321
Interest on loan notes held in associate
As set out in the full 2023 financial statements of the Group; the Group has
acquired a 30% equity interest in Parmenion Capital Partners LLP via a
corporate entity, Shillay TopCo Limited. A large part of the Group's total
investment is held by way of loan notes.
During the financial year the Group recognised £1,193,000 of interest on
those loan notes and this is reflected in other income.
Prior Year Restatement
Interest on loan notes held for the year ended 30 September 2022 has been
restated. The income previously presented was £1,977,000. This was equal to
the interest earned and received in cash by Shillay TopCo Limited in the year.
The Directors have restated this figure to reflect accrued interest earned but
not received.
The impact of this restatement is an additional £713,000 which has been
recognised in the prior year relating to interest accrued for, but which had
not yet been received in either cash or payment in kind loan notes. This has
had the effect of increasing profit and investments in associates by £713,000
for the 2022 year.
As at 30 September 2023 interest is fully accrued up to that date. The
restatement has not affected the full year 2023 figures but has reduced the
profit shown in the period to 31 March 2023 shown in the prior year interim
statements by this amount.
7. Administrative expenses and exceptional items
Included with administrative expenses are exceptional items as shown below:
Unaudited Audited
Unaudited 31 March 2023 30September
31 March £'000 2023
2024 £'000
£'000
Restructuring costs 967 1,197 2,967
Provision against doubtful debt - - 1,467
Costs of re-admission to AIM - - -
Exceptional items 967 1,197 4,434
Acquisition costs - 197 152
Disposal Costs Rize and LLC - - 201
Share-based payment expense and social security 279 - 104
Other administrative expenses 9,639 12,627 24,645
Total administrative expenses 10,885 14,021 29,536
Restructuring costs include, salaries of employees being made redundant from
the point of notice of redundancy, severance costs, costs associated with the
implementation of the new target operating model and guaranteed bonuses
awarded by River and Mercantile Group PLC ("RMG") prior to its acquisition
(the final tranche of these bonuses will vest in January 2024). The provision
against doubtful debt is against the receivables due from the Partners of the
Infrastructure business, repayable through future profits.
A further breakdown of administrative costs has been provided below to show
staff costs, amortisation and depreciation:
Unaudited Audited
Unaudited 31 March 2023 30September
31 March £'000 2023
2024 £'000
£'000
Staff costs 4,505 7,742 15,429
Amortisation and depreciation 330 589 684
Other administrative costs 6,050 5,690 13,423
Total administrative expenses 10,885 14,021 29,536
8. Other Gains and Losses
Unaudited Audited
Unaudited 31 March 2023 30September
31 March £'000 2023
2024 £'000
£'000
(Reduction) in fair value of asset held for resale (5) - -
Gain on disposal of fair value investments 159 - 122
154 - 122
9. Finance income
Finance income from continuing operations was: Unaudited Audited
Unaudited 31 March 2023 30September
31 March £'000 2023
2024 £'000
£'000
Interest income 62 2 74
62 2 74
10. Income Tax
Unaudited Audited
Unaudited 31 March 2023 30September
31 March £'000 2023
2024 £'000
£'000
Current tax
Current tax on (loss)/profits for the period - (16) 11
Total current tax expense/(credit) - (16) 11
Deferred tax
Continuing operations (154) (132) (199)
Discontinued operations - - (7)
Total deferred tax (credit)/expense (154) (132) (206)
Income tax (credit)/expense (154) (148) (195)
11. Loss & earnings per share
In August 2023 the Company effected a 10 for 1 share split. The prior period
share numbers and EPS have been adjusted for this.
Basic
Basic earnings per share is calculated by dividing the (loss)/profit
attributable to owners of the parent by the weighted average number of
Ordinary Shares in issue during the year. The weighted average number of
shares is calculated by reference to the length of time shares are in issue
taking into account the issue date of new shares and any buybacks. The prior
year has been restated to split out continuing and discontinued operations.
Unaudited Audited
Unaudited 31 March 2023 30September
31 March £'000 2023
2024 £'000
£'000
(Loss)/profit from continuing operations - £000 (2,463) (5,544) (12,707)
(Loss)/profit from discontinued operations - £000 (518) (8,971) (13,992)
Total (loss) attributable to owners of the parent (2,981) (14,515) (26,699)
Weighted average number of ordinary shares in issue post share split - no. 142,962,114 139,527,780 140,364,398
Basic earnings per share from continuing operations - pence (1.72) (3.97) (9.06)
Basic earnings per share from discontinued operations - pence (0.36) (6.43) (9.98)
Total basic earnings per share (2.08) (10.40) (19.04)
Diluted
Diluted earnings per share is calculated by adjusting the weighted average
number of Ordinary Shares in issue assuming conversion of all dilutive
potential Ordinary Shares.
Unaudited Audited
Unaudited 31 March 2023 30September
31 March £'000 2023
2024 £'000
£'000
(Loss)/profit from continuing operations - £000 (2,463) (5,544) (12,707)
(Loss)/profit from discontinued operations - £000 (518) (8,971) (13,992)
Total (loss) attributable to owners of the parent (2,981) (14,515) (26,699)
Weighted average number of ordinary shares in issue post share split - no. 142,962,114 139,527,780 140,364,398
Diluted earnings per share from continuing operations - pence (1.72) (3.97) (9.06)
Diluted earnings per share from discontinued operations - pence (0.36) (6.43) (9.98)
Total diluted earnings per share (2.08) (10.04) (19.04)
12. Business Combination
Summary of acquisitions
SVM
On 31 October 2022 AssetCo plc announced the completion of the acquisition of
the entire share capital and 100% voting rights of SVM Asset Management
Holdings Limited ("SVM"). SVM is an active equities fund management Group
based in Edinburgh.
ODAM
On 2 October 2023 the Group completed the acquisition of ODAM. The purchase
was for 100% of the shares and voting rights of the Company. The acquisition
is earnings enhancing for the Group and it is anticipated that further
synergies will be achievable due to further integration of the business in
order to capitalise on the existing operating model of the Group.
Details of the purchase consideration are as follows:
ODAM
£'000
Cash paid 2,464
Shares paid 556
Deferred shares (paid 30 January 2024) 556
Total consideration 3,576
The consideration was satisfied by the delivery of 1,464,129 ordinary shares
of £0.01 each in the capital of the Company satisfied from shares held in
treasury and £2.46m in cash (£1.82m net of cash within the business). A
final 1,464,129 Ordinary Shares of the Company, again satisfied from shares
held in treasury, were delivered on 30 January 2024. The total paid for the
ODAM business was therefore 2,928,258 Ordinary Shares, funded from treasury,
and £2.46m in cash (£1.82m net of cash within the business). Using a share
price of 38p (being the opening price on the date of Completion) this would
represents a fair value paid of £3,576,000.
The fair value of assets and liabilities recognised as a result of the
acquisition are as follows:
ODAM
£'000
Cash 642
Trade and other receivables 211
Plant and equipment 2
Trade payables (76)
Other payables (111)
Total net assets recognised on acquisition 668
Fair value adjustments
Intangible assets: customer relationships 3,600
Deferred tax liability (900)
Net identifiable assets/(liabilities) acquired 2,700
Goodwill 208
Net assets acquired 3,576
Acquired receivables
The fair value of acquired trade and other receivables was £211,000,
primarily made up of accrued income. No loss allowance was recognised on
acquisition.
Management contracts
The initial recognition of the management contract held by Ocean Dial was
calculated based on a Multi-period Excess Earnings Method ("MEEM"), estimating
a useful life of 12 years for the contract. Management developed a cash flow
forecast based on expectations from the year of acquisition making use of
historical analysis and management experience in the industry. Revenue growth
was estimated on a conservative basis of 2% per Annum offset by a biennial AuM
redemption of incrementally larger severity over the years (increasing from
2.5% to 30% redemptions by 2035) representing the shareholders biennial
continuation vote; based on management experience, historical analysis of
previous voting results and increased probability of redemptions over time. An
assumed weighted average cost of capital of 19% was applied, a premium
relative to the wider Group's business reflecting the size and equity risk
premium associated with the Ocean Dial Business. A deferred tax liability has
been recognised in respect of this asset.
Intangible assets in relation to non-contracted relationships
If customer relationships are to be recognised IFRS 3 requires that they must
stem from contractual or legal rights or are capable of being separable.
Despite being an important driver of value, customer relationships with end
investors and intermediaries are neither contractual nor separable and so no
value has been ascribed to these relationships.
In addition, it should be noted that other non-contractual assets which reside
within Goodwill include inherited value of the incumbent workforce and future
strategic value including the potential to manage additional funds utilising
the acquired capabilities.
Revenue and profit contribution
The business was accounted for from the date of acquisition (2(nd) October
2023). This is the first working day of the financial year of the Group and
consequently the revenue and operating results of the Group would have been
unaffected by accounting for the acquisition from 1(st) October 2023. Revenue
for the 6 months ended 31 March 2024 was £945,000 and contributing £441,000
to the profit before tax of the Group.
Purchase consideration - cash outflow
Outflow of cash to acquire subsidiaries, net of cash acquired
2023
£'000
Cash consideration 2,464
Less: balances acquired (642)
Net (inflow)/outflow of cash - investing activities 1,822
Acquisition-related costs
Directly attributable acquisition related costs for ODAM were £25,000
including those not directly attributable to the issue of shares. Incidental
costs are included in administrative expenses in the statement of profit or
loss.
13. Reconcilliation of losses and profits before tax to net cash
inflow from operations
Unaudited Audited
Unaudited Restated 30September
31 March 31 March 2023 2023
2024 £'000 £'000
£'000
(Loss)/profit for the year before taxation (2,617) (5,692) (12,902)
Share-based payments - -
-- in respect of LTIP - - -
Cash effect of LTIP - - -
Share of (loss) / profits of associate - (266) 352
Interest received from associate - (1,076) (2,213)
Increase in investments (4,794) (7) -
Reduction in fair value of investments 4 - -
Gain on disposal of fair value investments - -
Impairment of investments - -
Proceeds of asset held for resale - -
Bargain purchase - - -
Depreciation 14 14 28
Amortisation of intangible assets 320 386 665
Amortisation of right-of-use assets 486 431 860
Finance costs 67 136 510
Movement in foreign exchange - - (76)
Finance income (62) (2) (74)
Provision against doubtful debt - 1,718 1,467
Dividends from investment held at fair value - -
Decrease in receivables 832 612 3,841
(Decrease)/increase in payables (5,870) (3,382) (3,659)
Cash (outflow)/inflow from continuing operations (11,620) (7,128) (11,201)
14. Post Balance Sheet Events
Sale of Interest in River and Mercantile Infrastructure LLP ("RMI")
On 6 October 2023 the Group announced it had reached an agreement in principle
to transfer its interest in RMI to the partners of RMI, which would then
continue to operate outside the Group. Subsequent dialogue with the partners
of RMI and investors in the fund advised by RMI identified a different route
forward whereby the fund continued to be appropriately advised by a third
party and the partners of RMI established a business outside the AssetCo
Group. The transaction to effect this completed on 21 May 2024 with the result
that AssetCo and River Group have now exited the Infrastructure business and
RMI has effectively ceased operations.
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