15p target price..13 Feb 2017 08:26
The pipeline of on-site and appointed Extra Care schemes currently stands at £149.5m across 17 schemes (£4.1m on-site, £145.4m appointed), with a further £21.2m in Health across a further 8 schemes. Harwich Extra Care was completed in December 2016, with three further schemes currently being onsite - Walton on the Naze Extra Care and Health schemes in Swansea and Wivenhoe. The award this month of a grant of £11.5m by the Homes and Communities Agency for future Extra Care schemes, with a further allocated £7.5m to Ashley House partner schemes, again illustrates the Group’s presence in the space. Once the LHA cap consultation is completed, we expect demand for Ashley House’s Extra Care schemes to increase over the coming years. Whilst risks remain, trading on a FY 2017E PER of just 3.8x and EV/EBITDA of 2.5x, we believe the shares remain undervalued and maintain our 15p target price.