Secondary Recommendation

AssetCo - A compelling investment on a PE of 3

March 2011

Investing in shares may lose you all or some of your money. Past performance is no indication of future performance. Some of the shares recommended here may be small company shares, which can be relatively illiquid and hard to trade and this makes such shares more risky than other investments.

The shares responded badly to the curt statement that Assetco faced a short-term cash crisis. It might seem laughable but what has caused this cash squeeze has been some financial mismanagement. Apparently, despite knowing full well that it had a Â£4m VAT bill pending, management continued to buy equipment for its large London Fire Brigade PFI contract. Their misguided view had been that they would have refinanced the PFI contract ahead of the VAT deadline, which would have released Â£8.5m cash but with three banks involved this was always going to be a big ask. As it is, the company has now had the ignominity of a very dilutive equity placing with 160m new shares issued at just 10p to raise Â£16m, almost tripling the number in is ...

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AssetCo (July 2010)

AssetCo (May 2010)

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AssetCo - Abu Dhabi fire contract could be worth Â£1 billion (July 2009)

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AssetCo - New bid opportunities in 2008 (January 2008)

AssetCo - 20-year fire and rescue contracts (May 2007)

With small companies there is an above average degree of risk compared to buying blue chips. Please be aware that we have not assessed the suitability of any of these investments for you. The newsletter simply states a personal view and diarises the editor’s investment decisions. Please speak to your stockbroker or other qualified individual to ascertain whether any of these companies mentioned would form useful additions to your own portfolios. Past performance is no indication of future success.

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