26 Jan 2016 07:00
Ashley House plc
Interim Report 2015
Ashley House plc ("Ashley House" or the "Company"), the Extra Care Housing and Health Property partner today announces its interim results for the six months ended 31 October 2015.
Highlights
• Company returns to profit for the six months to 31 October 2015.
• Funding & Partnering Agreement signed with Funding Affordable Homes (FAH) with first two schemes on site and funded.
• Delivery underway of Extra Care pipeline which currently stands at £158m.
• Challenges remain around new Government policy on capping Housing Benefit. Extra Care accommodation is much needed and expected to be exempted. Government announcements are expected in the coming weeks.
• Four schemes currently on site (2014: four).
• Total forward pipeline, on-site or appointed of scheme value yet to be recognised of £186.7m on 32 schemes (January 2015: 31 schemes £175.2m).
Six months ended 31 October 2015
• Revenue significantly increased to £10.6m (2014: £5.6m).
• EBITDA of £0.6m (2014: loss of £1.2m).
• Profit before taxation £0.2m (2014: loss of £1.9m).
• Net debt £2.6m (2014: £2.2m).
• £10.7m of tax losses to be carried forward (2014: £8.2m).
"Risks remain but the Extra Care model is strong and the lack of suitable housing in the UK together with the ageing population means this is a sustainable, growing market. The Board remains confident that the Company will be profitable for the full year subject to the timing risk on the next Extra Care developments which is affected by the awaited confirmation of Government policy."
Christopher Lyons, Chairman
Enquiries:
Ashley House plc 01628 600 340
Antony Walters
Jonathan Holmes
WH Ireland
(Nominated Adviser and broker to Ashley House plc)
Adrian Hadden
Mark Leonard 0207 220 1666
Chairman's Statement
I am pleased to report that Ashley House made a profit in the period to 31 October 2015 as our investment in the new business model starts to generate a return. Ashley House is celebrating twenty five years this year and the period since the end of April 2015 has been as significant as any stage in our history.
In June we opened our first Extra Care development in Grimsby firmly marking the Company's move into this market where we are making immediate improvements to people's lives. This was followed at the end of September by the signing of an agreement with our new Extra Care funding partner, Funding Affordable Homes (FAH). Just before Christmas we announced that we had reached financial close and had drawn down the first part of the funding for our next two Extra Care schemes in Harwich and Walton on the Naze. There are challenges ahead but it has been an important and potentially transformational trading period and we are now looking to push on with the delivery of our pipeline schemes and return the business to sustainable profit and growth.
Our Extra Care schemes are designed to help the elderly and often the most vulnerable in our society. These tenants generally rely on Housing Benefit to fund all of their rental costs. The rent in these developments is invariably higher than in normal social housing as the units are purpose built and carefully designed to allow for the independence of the resident to be coupled with the ability to access both brought in care and communal facilities and activities.
In his Autumn Statement the Chancellor announced that Housing Benefit for social housing tenants would be limited to the Local Housing Allowance rate from April 2018 for new or renewed tenancies taken out from 1 April 2016. Whilst the Department for Work and Pensions has signalled its commitment to supporting vulnerable people, it is still working on how the policy will be implemented and whether Extra Care and similar schemes should remain exempted from such measures.
For our developments in Harwich and Walton on the Naze we were able to work in partnership with both FAH and the leaseholding Registered Provider to complete the deals. Further detail is expected from Government in March 2016 and we will continue to update shareholders appropriately.
Ashley House's Health business continues albeit at a steady pace. We will shortly complete a GP centre in Danbury, Essex and are ready to commence on site with a further two schemes. Our partnership with Integrated Pathology Partnerships is performing well where we have recently completed a pathology laboratory in Basildon and are about to commence on a laboratory refurbishment in Southend whilst jointly pursuing further opportunities.
In December we announced that we had novated the non-core operations management element of our LIFT investment, which is a specialised service very different to the rest of our business. This has allowed our LIFT activities to be focussed on development activity, our key corporate strength. We remain committed to our LIFT joint ventures and are working with our partners to explore opportunities to provide further services within this framework.
Results
The Company made a profit of £0.6m at EBITDA level in the first half of 2015/16 (2014/15: loss £1.2m) on a significantly increased revenue of £10.6m (2014/15: £5.6m). This led to a profit before taxation of £0.2m (2014/15: loss of £1.9m) following interest and a small non-cash impairment of the LIFTCo intangible of £0.2m. The Board remains confident that the Company will be profitable for the full year subject to the timing risk on the next Extra Care developments as mentioned above.
Scheme funding
The signing of the Funding and Partnering Agreement with FAH was a key step in the rebuilding of the business. We now have a partner who is keen to acquire and forward fund our large Extra Care developments. FAH is a social impact investment company which enables long-term socially responsible private investment into the affordable housing sector. Last week FAH publicly announced the establishment of its fund and the cornerstone investment of £15m from Big Society Capital, a socially-driven financial institution that works to encourage investment which achieves both social and financial returns by investing in organisations that deliver social projects.
FAH is aiming to invest over £100m in 2016 and £500m during its first three years of operation becoming a significant participant in the sector and introducing new long-term sources of funding.
We are delighted to have found a partner with such a good fit with our objectives. FAH was introduced to us by the Social Stock Exchange (SSX) of which we are proud to be a founder member. Now that the SSX has a segment of its own on the ISDX markets we are applying for dual listing which would both raise our profile and provide a further platform should we wish to raise capital such as bonds to fund projects in the future.
Net debt
The table below shows net debt of £2.6m at 31 October 2015 (2014: £2.2m). The Company's overdraft facility with Lloyds Bank of £0.5m has been renewed until 31 December 2016. The debt at the end of October was all secured on amounts incurred on scheme related expenditure. This is largely land purchased for future schemes which stood at £2.8m (2014: £3.8m) as shown in work in progress at the end of October. The management of our cash resources continues to be an important aspect of the business.
Unaudited | Unaudited | Audited | |||||
31 October 2015 | 31 October 2014 | 30 April 2015 | |||||
£000 | £000 | £000 | |||||
Cash in bank | 514 | 718 | 856 | ||||
Loan on Scarborough land | (797) | (967) | (883) | ||||
Loan | (2,300) | (2,000) | (2,000) | ||||
(2,583) | (2,249) | (2,027) |
Pipeline
Ashley House's pipeline as at January 2016 is shown in the table below. "Scheme value to come" has increased from the last pipeline information published in October 2015 despite the recognition of £9.7m of revenue from the pipeline in the period. The availability of funding from FAH should enable the Extra Care pipeline to grow further and this will be an area of focus in the coming months as our business relationship develops.
Extra Care | Health | TOTAL | ||||
No. of Schemes | Scheme value to come | No. of Schemes | Scheme value to come | No. of Schemes | Scheme value to come | |
On Site | 2 | £8.8m | 2 | £1.5m | 4 | £10.3m |
Appointed |
17 |
£149.2m |
11 |
£27.2m |
28 |
£176.4m |
TOTAL |
19 |
£158.0m |
13 |
£28.7m |
32 |
£186.7m |
Outlook
The focus in the last few months has very much been on securing funding for our Extra Care pipeline and beginning to deliver that pipeline with both objectives being achieved. Risks remain but it is the Board's belief that once the Housing Benefit issue is resolved as expected, the Extra Care model is strong and the lack of suitable housing in the UK together with the ageing population means this is a sustainable, growing market. The business also continues to ensure that adequate finance is in place to invest in the pipeline and deliver sustainable growth and we now have confidence that this will be the case.
The Board is pleased that the business returned to profit in the six months to 31 October 2015 and looks forward to the future with growing confidence.
Christopher Lyons
25 January 2016
Unaudited | Unaudited | Audited | ||
6 months to | 6 months to | Year to | ||
31 October | 31 October | 30 April | ||
2015 | 2014 | 2015 | ||
Note | £000 | £000 | £000 | |
Revenue |
| 10,626 | 5,590 | 8,384 |
Cost of sales |
| (8,343) | (5,190) | (8,600) |
Gross profit / (loss) |
| 2,283 | 400 | (216) |
|
|
|
|
|
Administrative expenses |
| (1,584) | (1,653) | (3,357) |
Share of results of joint ventures & associates |
| (42) | 84 | 199 |
Depreciation & impairment of non-financial assets |
| (185) | (553) | (7,645) |
|
|
|
|
|
Operating profit / (loss) |
| 472 | (1,722) | (11,019) |
Interest receivable |
| - | - | 1 |
Interest payable |
| (234) | (147) | (868) |
Profit / (loss) before taxation |
| 238 | (1,869) | (11,886) |
|
|
|
|
|
Profit / (loss) before taxation |
| 238 | (1,869) | (11,886) |
Depreciation & impairment of non-financial assets |
| 185 | 553 | 7,645 |
Taxation included in share of results of joint ventures & associates |
| (14) | (1) | - |
Interest receivable |
| - | - | (1) |
Interest payable |
| 234 | 147 | 868 |
EBITDA |
| 643 | (1,170) | (3,374) |
|
|
|
|
|
Tax credit / (charge) |
| - | 255 | (16) |
Total comprehensive income / (expense) for the period |
| 238 | (1,614) | (11,902) |
|
|
|
|
|
Basic and diluted earnings / (loss) per share | 3 | 0.41p | (2.77)p | (20.41)p |
Basic and diluted earnings / (loss) per share on adjusted EBITDA* | 3 | 1.10p | (1.57)p | (5.81)p |
* Adjusted EBITDA = EBITDA plus adjustment for exceptional items and tax credit
|
|
|
|
|
|
| Unaudited | Unaudited | Audited |
|
| 31 October | 31 October | 30 April |
|
| 2015 | 2014 | 2015 |
|
| £000 | £000 | £000 |
ASSETS |
|
|
|
|
Non-current assets |
|
|
|
|
Investments in joint ventures and associates |
| 2,087 | 9,369 | 2,300 |
Property, plant and equipment |
| 155 | 158 | 122 |
Deferred tax asset |
| 1,400 | 1,665 | 1,400 |
Other receivables |
| 827 | - | 807 |
|
| 4,469 | 11,192 | 4,629 |
Current assets |
|
|
|
|
Work in progress |
| 2,807 | 3,796 | 4,296 |
Trade and other receivables |
| 5,129 | 6,401 | 3,055 |
Cash and cash equivalents |
| 514 | 718 | 856 |
|
| 8,450 | 10,915 | 8,207 |
Total assets |
| 12,919 | 22,107 | 12,836 |
|
|
|
|
|
LIABILITIES |
|
|
|
|
Current liabilities |
|
|
|
|
Trade and other payables |
| (5,887) | (5,300) | (6,255) |
Bank borrowings and overdrafts |
| (1,537) | (167) | (883) |
Provisions |
| (31) | - | (31) |
|
| (7,455) | (5,467) | (7,169) |
Non-current liabilities |
|
|
|
|
Amounts falling due after more than one year |
| (1,560) | (2,800) | (2,000) |
Long term provisions |
| (109) | - | (117) |
|
| (1,669) | (2,800) | (2,117) |
Total liabilities |
| (9,124) | (8,267) | (9,286) |
|
|
|
|
|
Net assets |
| 3,795 | 13,840 | 3,550 |
|
|
|
|
|
EQUITY |
|
|
|
|
Share capital |
| 583 | 583 | 583 |
Special reserve |
| 3,491 | 10,541 | 3,491 |
Share based payments reserve |
| 29 | 24 | 22 |
Retained earnings |
| (308) | 2,692 | (546) |
Total equity |
| 3,795 | 13,840 | 3,550 |
|
|
|
|
|
|
|
|
| Share | Special | Share-based | Retained | Total |
|
| capital | reserve | payment reserve | earnings | equity |
|
| £000 | £000 | £000 | £000 | £000 |
Balance at 1 May 2015 |
| 583 | 3,491 | 22 | (546) | 3,550 |
|
|
|
|
| ||
Profit for the period |
| - | - | - | 238 | 238 |
|
|
|
|
| ||
Share based payments charge |
| - | - | 7 | - | 7 |
|
|
|
|
| ||
Balance at 31 October 2015 |
| 583 | 3,491 | 29 | (308) | 3,795 |
|
|
|
|
|
|
|
Balance at 1 May 2014 |
| 583 | 12,110 | 13 | 2,737 | 15,443 |
|
|
|
|
|
|
|
Loss for the period |
| - | (1,569) | - | (45) | (1,614) |
|
|
|
|
|
|
|
Share based payments charge |
| - | - | 11 | - | 11 |
|
|
|
|
|
|
|
Balance at 31 October 2014 |
| 583 | 10,541 | 24 | 2,692 | 13,840 |
|
|
|
|
|
|
|
Balance at 1 May 2014 |
| 583 | 12,110 | 13 | 2,737 | 15,443 |
|
|
|
|
|
|
|
Loss for the year |
| - | (8,619) | - | (3,283) | (11,902) |
|
|
|
|
|
|
|
Share based payments charge |
| - | - | 9 | - | 9 |
|
|
|
|
|
|
|
At 30 April 2015 |
| 583 | 3,491 | 22 | (546) | 3,550 |
|
|
|
|
| Unaudited | Unaudited | Audited |
| 6 months to | 6 months to | Year to |
| 31 October | 31 October | 30 April |
| 2015 | 2014 | 2015 |
| £000 | £000 | £000 |
Operating activities |
|
|
|
Profit /(loss) before taxation | 238 | (1,869) | (11,886) |
Adjustments for: |
|
|
|
Share based payments charge | 7 | 11 | 9 |
Depreciation, amortisation and impairment of non-financial assets | 185 | 553 | 7,645 |
Share of results of joint ventures and associates | 42 | (84) | (199) |
Dividends received from joint ventures and associates | 34 | 200 | 334 |
Purchase of shares in associate issued under rights issue | (17) | - | - |
Interest received | - | - | (1) |
Interest paid | 234 | 147 | 868 |
Operating cash flows before movements in working capital | 723 | (1,042) | (3,230) |
|
|
|
|
Decrease / (increase) in work in progress | 1,489 | (1,015) | (1,515) |
(Increase) / decrease in trade and other receivables | (2,094) | 427 | 2,966 |
(Decrease) / increase in trade and other payables | (368) | 1,205 | 2,160 |
(Decrease) / increase in provision | (8) | - | 148 |
Cash from operations | (258) | (425) | 529 |
|
|
|
|
Income tax paid | - | (10) | (16) |
Interest receivable | - | - | 1 |
Interest paid | (234) | (147) | (868) |
Net cash used by operating activities | (492) | (582) | (354) |
|
|
|
|
Investing activities |
|
|
|
Purchase of property, plant and equipment | (64) | (116) | (122) |
Net cash used by investing activities | (64) | (116) | (122) |
|
|
|
|
Financing activities |
|
|
|
Proceeds from borrowings | 300 | 1,400 | 1,400 |
Repayment of borrowings | (86) | (82) | (166) |
Net cash generated from financing activities | 214 | 1,318 | 1,234 |
|
|
|
|
Net (decrease) / increase in cash and cash equivalents | (342) | 620 | 758 |
|
|
|
|
Cash and cash equivalents at beginning of period | 856 | 98 | 98 |
|
|
|
|
Cash and cash equivalents at end of period | 514 | 718 | 856 |
Notes to the condensed consolidated interim financial statements
1 Nature of operations
The principal activity of the Group is the supply of design, construction management, consultancy and asset management services, primarily working with providers of healthcare and social care on infrastructure developments from project inception to completion of construction and beyond.
Ashley House's condensed consolidated interim financial statements (the interim financial statements) are presented in pounds sterling (£), which is also the functional currency of the parent company. These interim financial statements were approved for issue by the Board of directors on 25 January 2016.
The financial information set out in these interim financial statements does not constitute statutory accounts as defined in Section 434 of the Companies Act 2006. The Group's statutory financial statements for the year ended 30 April 2015 have been filed with the Registrar of Companies. The auditor's report on those financial statements was unqualified and did not contain a statement under Section 498(2) of the Companies Act 2006.
2 Basis of preparation
These interim financial statements are for the six months ended 31 October 2015. They have been prepared following the recognition and measurement principles of IFRS. They do not include all of the information required for full annual financial statement and should be read in conjunction with the consolidated financial statements of the Group for the year ended 30 April 2015.
These interim financial statements have been prepared on the going concern basis, under the historical cost convention, except for the revaluation of certain financial instruments which are carried at fair value.
These interim financial statements have been prepared in accordance with the accounting policies adopted in the last annual financial statements for the year to 30 April 2015.
Notes to the condensed consolidated interim financial statements (continued)
3 Earnings per share
The calculation of the basic earnings per share is based on the profit / (loss) attributable to ordinary shareholders divided by the weighted average number of shares in issue during the period.
|
|
| Weighted |
|
| Adjusted |
| average | Per share |
| EBITDA* | Profit | number | amount |
6 months to 31 October 2015 | £000 | £000 | of shares | Pence |
Profit after tax | 643 | 238 |
|
|
Profit attributable to ordinary shareholders |
|
|
|
|
Weighted average number of shares |
|
| 58,319,755 |
|
Basic earnings per share |
|
|
| 0.41p |
Basic earnings per share based on adjusted EBITDA* |
|
|
| 1.10p |
|
|
| Weighted |
|
| Adjusted |
| average | Per share |
| EBITDA* | Loss | number | amount |
6 months to 31 October 2014 | £000 | £000 | of shares | Pence |
Loss after tax | (915) | (1,614) |
|
|
Loss attributable to ordinary shareholders |
|
|
|
|
Weighted average number of shares |
|
| 58,319,755 |
|
Basic loss per share |
|
|
| (2.77)p |
Basic loss per share based on adjusted EBITDA* |
|
|
| (1.57)p |
|
|
| Weighted |
|
| Adjusted |
| average | Per share |
| EBITDA* | Loss | number | amount |
Year to 30 April 2015 | £000 | £000 | of shares | Pence |
Loss after tax | (3,390) | (11,902) |
|
|
Loss attributable to ordinary shareholders |
|
|
|
|
Weighted average number of shares |
|
| 58,319,755 |
|
Basic loss per share |
|
|
| (20.41)p |
Basic loss per share based on adjusted EBITDA* |
|
|
| (5.81)p |
* Adjusted EBITDA = EBITDA plus adjustment for exceptional items and tax credit.
Company information
Company registration number
02563627
Registered office
Unit 1, Barnes Wallis Court
Wellington Road
Cressex Business Park
High Wycombe
HP12 3PS
Directors
C P Lyons Non-executive ChairmanS G Minion Non-executive Deputy ChairmanA J Walters Chief ExecutiveJ Holmes Commercial DirectorA J Willetts Non-executive directorJ L Moy Non-executive director
Secretary
S Ronaldson
Nominated Adviser and Broker
W H Ireland Limited
24 Martin Lane
London EC4R 0DR
Bankers
Lloyds Banking Group
High StreetSloughBerkshire SL1 1DH
Solicitors
Squire Patton Boggs (UK) LLP
2 Park LaneLeeds LS3 1ES
Auditor
Deloitte LLP
2 New Street SquareLondon EC4A 3BZ