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AssetCo PLC (ASTO)

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WickedLester
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AssetCo PLC (ASTO)

#73954

Postby WickedLester » August 12th, 2017, 5:01 pm

I have a few shares in this company bought as a sort of binary punt on two eventualities.

I believe there is 100% upside in a best case scenario and 25% downside in the worst case scenario.

The company has a market cap of £38m. In the first half they made a profit of £1.7m so on a modest p/e. The problem is all of their business relates to a short term contract to supply emergency fire services to the Abu Dhabi government. This is one of the punts that I have taken, that is that the contract continues to be rolled over on the same terms meaning they have a long term income.

Tee second punt I have taken is that they win their court case for £40m against their former auditor Grant Thornton which is due to be heard next summer. Grant Thornton have already been fined over their handling of AssetCo's audits in the past so there has to be a fair chance of at least some sort of success for AssetCo in this matter.

So if they keep their contract with the Abu Dhabi government and win their court case they will have £60m in cash plus be making £3.5m a year profit from their fire service.

Now the downside. If they lose their contract and their court case they will still be left with £28m in net current assets including £20m in cash thus limiting the downside.

It looks an attractive risk reward scenarion to me.

Chris Mills is a major shareholder.

Any thoughts anyone?

Lester

WickedLester
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Re: AssetCo PLC (ASTO)

#129027

Postby WickedLester » March 30th, 2018, 3:21 pm

Another stock that didn't generate much interest, are there no small cap investors from the Fool over here?

Anyway they reported the other day, I don't know why it takes a small company with not much in the way of operations 6 months to sort out their results.

https://www.investegate.co.uk/assetco-p ... 00041539J/

So far so good though. Profit was down due to a big increase in the costs of their litigation. This case is due to be decided in June of this year so not long to wait and they still have that Abu Dhabi contract. The price has fallen a bit since I first posted and the market cap is now about £34m against net current assets of £28m. I believe the risk/reward is even more appealing now.

Hopefully i'll know before the end of this year whether this one is going to pay off or not.

WickedLester
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Re: AssetCo PLC (ASTO)

#175967

Postby WickedLester » October 24th, 2018, 12:38 pm

FWIW I sold the last of my small holding In these after they announced that they were going to lose their contract to supply fire services to the Abu Dhabi Government.

I took another look at the current market cap and the risk and reward and decided I wouldn't chance everything on the outcome of their litigation.

They'll probably announce that they won £40m in a couple of weeks.

WickedLester
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Re: AssetCo PLC (ASTO)

#198011

Postby WickedLester » January 31st, 2019, 5:46 pm

It looks like ASTO won their case against Grant Thornton, but were awarded only half the damages they were claiming. Still it looks to me as though they will have net cash of over £40m and net current assets of around £50m if there is no successful appeal by GT, againt a market cap of around £35m.

They may still have some profitable operations going forward too if I understand the last trading statement correctly.

https://www.investegate.co.uk/assetco-p ... 24176755O/

WickedLester
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Re: AssetCo PLC (ASTO)

#234632

Postby WickedLester » July 7th, 2019, 4:54 pm

I bought back into these at about 270p as at that price they are trading at a small premium to net assets, all cash and current assets and they are still awaiting a final decision on their Court case against GT (now the subject of an appeal to be heard later this year) where they are in line to get over £33m including costs if successful.

That makes it look an attractive risk/reward situation to me with perhaps 10-15% downside against up to 100% upside if they are awarded all of the damages and costs on appeal..

https://www.investegate.co.uk/assetco-p ... 15270522R/

https://www.investegate.co.uk/assetco-p ... 00036755A/

Lester


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