TIDMASH
RNS Number : 4011B
Ashley House PLC
06 October 2015
Ashley House plc (the 'Company' or 'Group'), the health and
community care property partner
Preliminary results
Ashley House plc, the health and community care property partner
today announces its preliminary results for the year ended 30 April
2015.
Operating highlights:
Ø Significant resource invested in driving Extra Care
business
o Funding and Partnering Agreement now in place with a new
strategic partner to develop out existing pipeline and drive new
projects
o First Extra Care scheme in Grimsby delivered
o Pipeline of 19 schemes, on site (2) or appointed (17) with
GBP149m of revenue anticipated to be recognised
Ø Health market continuing to evolve
o Pipeline of 13 schemes, on site (2) or appointed (11) with
GBP32m of revenue anticipated to be recognised
o Three Health schemes to go to site this year
o Significant (non-cash) write down of the LIFT investment of
GBP7,555,000 (2014: GBP1,722,000)
Financial highlights:
Ø Revenue flat and results in line with expectations
o Revenues in line with prior year at GBP8,384,000 (2014:
GBP8,337,000)
o Gross loss of GBP216,000 (2014 gross profit: GBP560,000)
o EBITDA before exceptionals and impairment showing a loss of
GBP3,374,000 (2014: GBP2,597,000) in line with expectations
o Loss before tax GBP11,886,000 (2014: GBP4,707,000)
Ø Continuing management of overheads and debt
o Administrative expenses flat at GBP3,357,000 (2014:
GBP3,360,000)
o Cash generated from operations of GBP529,000 (2014:
GBP1,281,000)
o Net debt increased to GBP2,027,000 at 30 April 2015 and
GBP3,059,000 at 2 October 2015 (30 April 2014: GBP1,551,000)
Enquires:
Ashley House plc 01628 600 340
Antony Walters, Chief Executive
Jonathan Holmes, Commercial Director
WH Ireland Ltd 0207 220 1666
(Nominated Adviser and broker to Ashley House plc)
Adrian Hadden
Mark Leonard
Statement of directors' responsibilities
The responsibility statement below has been prepared in
connection with the Company's Annual Report and Accounts for the
year to 30 April 2015. Certain parts thereof are not included
within this preliminary announcement.
Responsibility statement
We confirm that to the best of our knowledge:
-- the financial statements, prepared in accordance with the
relevant financial reporting framework, give a true and fair view
of the assets, liabilities, financial position and profit or loss
of the Company and the undertakings included in the consolidation
taken as a whole; and
-- the management report, which is incorporated into the
directors' report, includes a fair review of the development and
performance of the business and the position of the Company and the
undertakings in the consolidation taken as a whole, together with a
description of the principal risks and uncertainties that they
face.
This responsibility statement was approved by the Board of
Directors on 6 October 2015 and signed on its behalf by:
Antony Walters
Chief Executive
Chairman's statement
The past twelve months have been both challenging and exciting
as we have continued to invest significant resource in driving our
efforts in the Extra Care business, building the platforms for
growth and longer term revenue streams. Whilst I am disappointed to
report another trading loss for the year to 30 April 2015 it is the
Board's view that our considerable efforts to rebuild the business
are poised to return the Company to profitability this year.
Funding
I am delighted that the Company has recently announced that it
has chosen to sign a Funding and Partnering Agreement with Funding
Affordable Homes ('FAH') and its property advisor SHA Housing
Limited. FAH is a newly established investment company set up to
serve investors who hold the same strong social and financial
objectives as ourselves. The fit with our business is compelling.
FAH has a mission to support the affordable homes sector. We have
agreed to work together on the development and delivery of
affordable Extra Care housing for older people. The schemes will be
forward funded by FAH during construction and through to completion
allowing us to develop the business without the difficulty of
needing to grow external debt. This arrangement will give us a much
needed boost to our current pipeline delivery.
During the last year we held discussions with many potential
funding partners. We adopted a strategy of seeking lenders and
funders closely aligned with our business model and social values.
Many of these discussions were extremely positive and resulted in
real interest in funding the projects we produce. I would like
particularly to thank M&G Investment Management Limited with
whom we had signed a Heads of Terms and who we would hope to work
with in the future.
Results
As previously signaled, whilst significant value has been
created in our Extra Care pipeline this year, the Company has been
unable to recognise this within its results until such time as
funding for the pipeline has been confirmed. As such the results
for the year to 30 April 2015 were an EBITDA loss of GBP3,374,000
(2014: loss of GBP2,597,000). Revenue was in line with the prior
year at GBP8,384,000 (2014: GBP8,337,000). However even with the
additional investment in Extra Care it is positive to note only a
limited increase in net debt to GBP2,027,000 (2014:
GBP1,551,000).
We announced in July that the Company had received an approach
to acquire its interest in the NHS LIFT Joint Ventures. This has
yet to complete and is unlikely to do so in the structure first
envisaged due to a number of complexities, although discussions
continue using a different structure. However, following these
discussions we have conducted a full impairment review of our LIFT
investment and in the light of very low activity within the NHS
estate arena, the Company has provided a significant (non-cash)
write down in its value to GBP2,223,000 leading to a loss before
taxation of GBP11,886,000 (2014: GBP4,707,000). We do however
remain active participants in this area of business.
Current trading
Our pipeline of schemes continues to grow in both quality and
quantity, dominated by Extra Care schemes. Good progress has been
made during the year with four schemes on site at the year end. In
light of last week's funding announcement both of our flagship
schemes at Harwich and Walton are progressing to plan and are
expected to reach financial close this year, contributing
approximately GBP21m of revenue over the next 24 months as they are
built out.
Our Health business continues to be slow although there are
signs of activity albeit on a much reduced level. We are currently
contracted on a number of schemes, and projects for a GP surgery in
Danbury and a Pathology Laboratory in Basildon are underway
contributing GBP1.4m of revenue during the year to 30 April 2015.
Both the scheme at Danbury and the next three Health schemes
(subject to contract) are forward funded. We are proactively
looking to do more in this area.
We are pleased to advise that during the year we were appointed
as property partner for two organisations with tremendously
valuable services. One of these is HSN Care with whom we are
developing a pipeline of housing designed specifically for
profoundly disabled adults. We are now in advanced stages with
three schemes (one on site) with more to come. The other is a
national charity called Hft which provides services for people with
learning disabilities throughout England. Engagement with these
clients significantly raises our profile in this area.
Board composition
Despite the significant activity carried out during the past
year, we have succeeded in keeping our administrative overheads at
the same level. This has been a real team effort during the year as
we have put in place the appropriate resources to take advantage of
the opportunities presented by the Extra Care market and I must pay
tribute to, and thank all the staff for their effort, energy and
enthusiasm during the year. I have been pleased with the impact of
changes we have made to the Board. We currently have two Executive
Directors with Jonathan Holmes moving from Chief Executive to
Commercial Director last October and Tony Walters to Chief
Executive from Finance Director. This move has freed Jonathan to
concentrate on building the pipeline, and has seen both individuals
develop personally and drive the business forward. This has
resulted, we believe in real focus of our team's skills in key
areas.
During the year we were delighted that John Moy accepted an
invitation to join the Board as a Non-executive Director. John is a
significant investor in Ashley House plc and is very supportive of
the team's efforts greatly adding to the Board's deliberations
during a time of change and uncertainty. Richard Darch stepped down
from the Board during the year due to his increasing executive
commitments with Capita Health Partners.
Extra Care
Since I joined the Board, confidence in our Extra Care business
model has grown internally and more importantly with key
stakeholders including commissioners. When we embarked on this
journey it was an unproven concept with significant obstacles to
overcome. We necessarily adopted a considered approach whilst
deploying significant investment in driving our Extra Care business
as an alternative to our traditional revenue streams.
The recent completion and occupation of our first scheme in
Grimsby which provides purpose-built, accessible accommodation to
more than 60 contented elderly residents, is testament to the
Company's partnership based approach and now provides a showcase
for what the Company can achieve in Extra Care. I was delighted to
attend the formal opening last month and it was a privilege to hear
some of the new residents' stories.
(MORE TO FOLLOW) Dow Jones Newswires
October 06, 2015 07:40 ET (11:40 GMT)
A key element in securing the funding package for these schemes
has been to develop a pipeline of critical mass which continues to
increase in size as Ashley House establishes itself as a leading
development partner in this arena. This can be demonstrated by the
recent win, through competitive tendering with North Yorkshire
County Council, of a place on their Extra Care Housing Framework to
design, fund, build, deliver and asset manage Extra Care
accommodation in various locations in York and North Yorkshire. The
framework will be used by other bodies seeking to commission
services such as ours. This appointment is not guaranteed to bring
us work but is an excellent external indicator of our growing
stature.
It remains our belief that the market for Extra Care Housing is
growing, driven by the housing and health issues associated with an
aging population. This together with our unique offering of end to
end service, and our historical record of delivering public
infrastructure projects combined with our declared and proven
social purpose are the key to winning competitive tenders.
In the immediate future, it is likely that our revenue streams
will be variable, but more predictable as the emphasis swings
towards the construction phase of pipeline delivery. As the scheme
volumes increase this will have a smoothing effect on this
volatility. Construction project delivery is a core competence of
the business along with the management of cash resources. During
the year we have necessarily adopted a prudent and cautious
approach to the development of appointed schemes and winning bids.
We will continue this approach, and in the light of announcements
on scheme funding above, the Board concludes that at the time of
signing of these financial statements, it is appropriate to do so
on a going concern basis.
Outlook
The Board does not underestimate the challenges that lie ahead,
however the general direction of travel is positive and very
encouraging as we gear ourselves to deliver the pipeline schemes to
financial close and ultimate delivery against the backdrop of our
funding announcements. I must emphasise that we remain in the early
stages but there is a renewed air of confidence that we can deliver
sustained growth for the business.
Finally, I am acutely aware that our share price and the value
of the Company has languished in recent times. I along with my
fellow Board members together with the Ashley House team wish to
record our thanks to you, the shareholders. Many of you are long
term investors who have given us much needed support in uncertain
times. Your forbearance, loyalty and tolerance are very much
appreciated.
Christopher Lyons
Chairman
6 October 2015
Strategic Report
Principal activity
The principal activity of the Group is the supply of design,
construction management, consultancy and asset management services,
primarily working with providers of health and social care on
infrastructure developments from project inception to completion of
construction and beyond.
Business review
The consolidated statement of comprehensive income for the year
is set out on page 8. A review of developments affecting the Group
during the year and of its prospects for the future appears in the
Chairman's statement on pages 3 and 4 and in this Strategic Report.
The Group is required by the Companies Act 2006 to set out a fair
review of the business of the Group during the financial year ended
30 April 2015 and the position of the Group at the end of the year
along with principal risks and uncertainties facing the Group. This
information is included within the Chairman's statement and in this
Strategic Report.
Whilst the results for the year to 30 April and recent periods
have been hugely disappointing, the numbers do not reflect the
considerable investment both in time and effort and in financially
building up the pipeline particularly in Extra Care. No income is
recognised on schemes until financial close and all expenditure
(other than land) is expensed immediately.
The two key objectives for this year have been to continue to
grow the Extra Care pipeline and to establish an appropriate
funding model to deliver it. Strong progress has been made on both.
The announcement of our Funding and Partnering Agreement with
Funding Affordable Homes ('FAH') a newly established investment
company for the affordable homes sector, and its property advisor
SHA Housing Limited, is therefore key, not just to cashflow and the
ability to accelerate the pipeline by investing in further schemes,
but to establishing a relationship with a like-minded partner. As a
result of this the Board expects a return to profit in the next
accounting period.
Subject to final due diligence and contract on each individual
scheme, FAH will forward fund our schemes at Harwich and Walton and
the pipeline of similar larger Extra Care schemes beyond. This
partnership will provide us with the financial ability to develop
out the existing pipeline and drive new projects.
Schemes
The continuing growth of our Extra Care pipeline with the
ability now to deliver it, should provide the basis for real growth
in the Company. At the end of June we were delighted that our first
Extra Care scheme in Grimsby reached practical completion. This is
a development of 60 flats providing much needed purpose-built
accommodation for some of the most vulnerable older people in the
country. Tenancies have been oversubscribed from day one. A case
study showcasing this development will be shown in the annual
report.
Our Health schemes continue albeit at a much lower rate than
prior to 2011 due to the lack of investment in Government funding
for their rentals. The Company is currently on site on a GP surgery
for 12,000 patients in Danbury, and a third pathology laboratory
for Integrated Pathology Partnerships in Basildon. During the year
an extension and refurbishment to GP premises in Hillingdon was
completed. The outlook for Health is considered to be improving
with some small signs of recovery in the market, but not as quickly
as we or indeed many GPs and other health professionals would like.
Nonetheless, we remain committed to the sector and will work to
support our many clients.
Pipeline
The growth in the Company's pipeline continues to be dominated
by Extra Care, which has increased significantly to GBP148.5m from
GBP106.8m this time last year. The Health pipeline stands at
GBP31.9m across 13 schemes. The table below shows the current
pipeline along with the same information reported with the interim
and annual accounts for the last two years. This demonstrates the
significant rise in Extra Care along with a fairly flat progression
for Health following the NHS reorganisation.
.
October 2015 January 2015 September 2014 December 2013 June 2013
----------- -------------------- -------------------- -------------------- -------------------- -------------------
No. Scheme No. Scheme No. Scheme No. Scheme No. Scheme
of value of value of value of value of value
Schemes to come Schemes to come Schemes to come Schemes to come Schemes to come
----------- -------- ---------- -------- ---------- -------- ---------- -------- ---------- -------- ---------
EXTRA
CARE
----------- -------- ---------- -------- ---------- -------- ---------- -------- ---------- -------- ---------
On-site 2 GBP12.4m 2 GBP13.9m 1 GBP4.7m 1 GBP5.3m 1 GBP5.5m
----------- -------- ---------- -------- ---------- -------- ---------- -------- ---------- -------- ---------
Appointed 17 GBP136.1m 16 GBP119.7m 15 GBP102.1m 11 GBP57.4m 7 GBP37.3m
----------- -------- ---------- -------- ---------- -------- ---------- -------- ---------- -------- ---------
Total
EC 19 GBP148.5m 18 GBP133.6m 16 GBP106.8m 12 GBP62.7m 8 GBP42.8m
----------- -------- ---------- -------- ---------- -------- ---------- -------- ---------- -------- ---------
HEALTH
----------- -------- ---------- -------- ---------- -------- ---------- -------- ---------- -------- ---------
On-site 2 GBP5.1m 2 GBP6.0m 1 GBP0.5m 3 GBP1.7m 3 GBP4.5m
----------- -------- ---------- -------- ---------- -------- ---------- -------- ---------- -------- ---------
Appointed 11 GBP26.8m 11 GBP35.6m 16 GBP48.4m 16 GBP38.9m 15 GBP38.0m
----------- -------- ---------- -------- ---------- -------- ---------- -------- ---------- -------- ---------
Total
Health 13 GBP31.9m 13 GBP41.6m 17 GBP48.9m 19 GBP40.6m 18 GBP42.5m
----------- -------- ---------- -------- ---------- -------- ---------- -------- ---------- -------- ---------
TOTAL 32 GBP180.4m 31 GBP175.2m 33 GBP155.7m 31 GBP103.3m 26 GBP85.3m
----------- -------- ---------- -------- ---------- -------- ---------- -------- ---------- -------- ---------
As a guide, revenues from on-site schemes will continue to flow
for up to 18 months. The current schemes on site have a weighted
average life of approximately 12 months. Where the Company is
appointed the time frame to move to on-site is likely to be between
6 and 36 months. Revenues are only recognised from on-site schemes
and on appointed schemes to the extent that the Company would
recover its fees in the circumstances of the scheme not
progressing. 'Scheme value to come' represents the likely
investment value of the scheme less any revenue already
recognised.
Financial risk management objectives and policies
(MORE TO FOLLOW) Dow Jones Newswires
October 06, 2015 07:40 ET (11:40 GMT)
The Group is exposed to a variety of financial risks which
result from both its operating and investing activities. The Board
is responsible for co-ordinating the Group's risk management and
focuses on actively securing the Group's short to medium-term cash
flows. The Group does not actively engage in the trading of
financial assets and has no financial derivatives. The most
significant financial risks to which the Group is exposed are
described below.
Credit risk
The Group's principal financial assets are cash, trade
receivables and amounts recoverable on contracts. The amount of
trade receivables presented in the balance sheet is net of any
allowance for doubtful trade receivables, as estimated by the
directors. Amounts recoverable on contracts are presented net of
provisions deemed necessary by the directors. The Group's largest
customer in the year is set out in Note 1 to the financial
statements. The Group employs a strict credit vetting policy based
on track record payment history and externally available credit
data.
Interest rate risk
The Group finances its operations principally through retained
earnings, project-specific borrowings and general bank borrowings,
as set out in Note 15 to the financial statements. The interest
rates applicable to these borrowings, where variable in nature,
expose the Group to interest rate risk. The Group seeks to minimise
such risk by entering into fixed interest rate arrangements where
it is financially viable to do so. The Group does not undertake
interest rate hedging on its general borrowings and only considers
undertaking interest rate hedging for project-specific term loans.
The Group operates a policy of seeking to optimise deposit interest
earned, paying due regard to credit risk and ensuring the business
has sufficient available cash to operate effectively.
Liquidity risk
The Group seeks to manage risks to ensure sufficient liquidity
is available to meet foreseeable needs by investing cash assets
safely and profitably. The nature of the Group's business is such
that it is exposed to risks associated with cash flow timings,
particularly the receipt of design and development fees. The
liquidity of the Group is monitored by senior management and
reported to the Chief Executive and Commercial Director daily.
Revenue recognition
The Group's revenue recognition policy set out in the principal
accounting policies is central to the way the Group values the work
it has carried out in each financial year. Amounts recoverable on
contracts relate to projects that are ongoing as at the period end.
Management's expectation is that these amounts will be invoiced net
of any provision within the next financial year, at which point the
Group expects to collect the balances in full.
Cash management
The forward funding of the first Grimsby Extra Care scheme
brought a significant cash receipt which along with careful
management of expenditure has seen our increase in net debt limited
to GBP476,000. Overheads were flat with administrative expenses
totaling GBP3,357,000 (2014: GBP3,360,000). The Group generated
GBP529,000 (2014: GBP1,281,000) cash from operations and increased
net debt to GBP2,027,000 (2014: GBP1,551,000) as shown in the table
below. Since the year end the loan on the land at Scarborough has
further reduced and the overdraft facility with Lloyds Bank has
been extended to the end of December 2015. A further facility of up
to GBP1,500,000 granted with a private organisation has been agreed
with the expectation that the first drawdown of circa GBP500,000
will be made shortly. We are grateful to our lenders particularly
Rockpool Investments, whose flexibility has allowed us to generate
the pipeline of schemes which will now be delivered. Their support,
along with our focus on cash management, has enabled us to do this
without having to call on shareholders for further equity.
Unaudited
30/04/2014 30/04/2015 02/10/2015
GBP000 GBP000 GBP000
Cash in bank 98 856 (262)
Scarborough (1,049) (883) (797)
Loan (600) (2,000) (2,000)
------------
Net debt (1,551) (2,027) (3,059)
----------- ----------- ------------
Investments in joint ventures
On 24 July it was announced that we had received a proposal to
acquire our interest in our NHS LIFT Joint Ventures. Due to the
legal complexity of the asset, a deal has yet to be completed and
is unlikely to be in the form initially proposed, although talks
continue around an alternative structure. The review of the LIFT
investment was undertaken with these discussions in mind and as
previously advised the Company has provided a significant
(non-cash) write down in its value. At the year end the exclusivity
periods had an average of 9.5 years remaining. There has been
relatively little new work coming from LIFT in the year and the
directors considered that the value had therefore been impaired by
a further GBP7,555,000 (2014: GBP1,722,000). This non-cash
impairment has reduced the carrying value of the LIFT investment at
the year end to GBP2,223,000 (2014: GBP9,778,000).
Social impact
Ashley House is proud of the social value its work creates. The
improvements to people's health and lives that directly result from
the Company's activities was demonstrated by the opening of the
Extra Care scheme in Albion Street, Grimsby. Applications for the
accommodation were oversubscribed. We are working with the Clinical
Commissioning Group in North East Lincolnshire to track and measure
the wider health and economic benefits from the scheme. However,
the changes one of our schemes can enable can be ably identified in
individuals' stories such as the man in his 60s who has moved in
after spending eleven years in a state run nursing home. More
detail will be provided in the annual report.
The Company continues to be an active member of the Social Stock
Exchange ('SSX'). The SSX connects social impact businesses such as
Ashley House with investors looking to generate social or
environmental change as well as financial return from their
investment. The Company strongly believes that social impact and
financial prosperity can and should go hand in hand. Membership of
the SSX also demonstrates our social credibility through third
party accreditation which is key when entering into partnerships
with local government clients. The Company was delighted to be
nominated as Social Impact Company of the year for the second year
running at the Small Cap Awards which seek to recognise outstanding
achievement in the quoted UK Small-Cap market. The Company will
shortly publish its third annual social impact report, which is
independently verified. This will be accessible on the Company's
website in due course. We met our new funding partner, FAH through
the Social Stock Exchange and believe there can be no greater
example of how its mission of matching capital and businesses, both
committed to delivering financial and social returns, has been
achieved.
Summary
Whilst the reported performance of the business in the last few
years has been very disappointing, strong value is being created in
Extra Care and the financing of these schemes will enable the
pipeline to start to flow. The Board continues to be of the strong
belief that delivering Extra Care is the correct strategy for the
business supplemented by our traditional work in the Health market.
As the delivery of our pipeline accelerates, this value will start
to be realised in the results of the Company.
Antony Walters Jonathan Holmes
Chief Executive Commercial Director
Date: 6 October 2015
Consolidated statement of comprehensive income
for the year ended 30 April 2015
2015 2014
Note GBP000 GBP000
---------------------------------------------------- ----- --------- --------
Revenue 8,384 8,337
Cost of sales (8,600) (7,777)
---------------------------------------------------- ----- --------- --------
Gross (loss)/profit (216) 560
---------------------------------------------------- ----- --------- --------
Administrative expenses (3,357) (3,360)
Share of results of joint ventures 199 188
Depreciation and impairment (7,645) (1,793)
Exceptional items - restructuring - (230)
---------------------------------------------------- ----- --------- --------
Operating expenses (10,803) (5,195)
---------------------------------------------------- ----- --------- --------
Operating loss (11,019) (4,635)
Interest receivable 1 8
Interest payable (868) (80)
Loss before taxation (11,886) (4,707)
---------------------------------------------------- ----- --------- --------
Loss before taxation (11,886) (4,707)
Depreciation and impairment 7,645 1,793
Exceptional items - restructuring - 230
Depreciation, amortisation and taxation included
(MORE TO FOLLOW) Dow Jones Newswires
October 06, 2015 07:40 ET (11:40 GMT)
in share of results of joint ventures - 15
Interest receivable (1) (8)
Interest payable 868 80
EBITDA before exceptionals and impairment (3,374) (2,597)
---------------------------------------------------- ----- --------- --------
Tax (charge)/credit (16) 529
---------------------------------------------------- ----- --------- --------
Loss after tax for the year attributable to equity
holders of the parent (11,902) (4,178)
---------------------------------------------------- ----- --------- --------
Basic and diluted loss per share 2 (20.41)p (7.16)p
---------------------------------------------------- ----- --------- --------
Basic loss per share on adjusted EBITDA* 2 (5.81)p (3.55)p
---------------------------------------------------- ----- --------- --------
All of the activities of the Group are classed as
continuing.
* Adjusted EBITDA = EBITDA before exceptionals and impairment
plus income tax (charge)/credit.
Consolidated balance sheet
at 30 April 2015
2015 2014
Note GBP000 GBP000
------------------------------- ---- ------- -------
Non-current assets
Property, plant and equipment 122 90
Investments in joint ventures 3 2,300 9,990
Deferred tax asset 1,400 1,400
Other receivables 807 -
4,629 11,480
------------------------------- ---- ------- -------
Current assets
Work in progress 4,296 2,781
Trade and other receivables 3,055 6,828
Cash and cash equivalents 856 98
------------------------------- ---- ------- -------
8,207 9,707
------------------------------- ---- ------- -------
Total assets 12,836 21,187
------------------------------- ---- ------- -------
Current liabilities
Trade and other payables (6,255) (4,095)
Bank borrowings and overdrafts 4 (883) (167)
Provisions (31) -
------------------------------- ---- ------- -------
(7,169) (4,262)
------------------------------- ---- ------- -------
Net current assets 1,038 5,445
------------------------------- ---- ------- -------
Non-current liabilities
Bank borrowings and overdrafts 4 (2,000) (1,482)
Long term provisions (117) -
------------------------------- ---- ------- -------
Total liabilities (9,286) (5,744)
------------------------------- ---- ------- -------
Net assets 3,550 15,443
------------------------------- ---- ------- -------
Equity
Share capital 583 583
Share-based payment reserve 22 13
Special reserve 3,491 12,110
Retained earnings (546) 2,737
------------------------------- ---- ------- -------
Total equity 3,550 15,443
------------------------------- ---- ------- -------
Consolidated statement of changes in equity
for the year ended 30 April 2015
Share-based
Share Special payment Retained
capital reserve reserve earnings Total
GBP000 GBP000 GBP000 GBP000 GBP000
--------------------------- -------- -------- ----------- --------- --------
At 1 May 2014 583 12,110 13 2,737 15,443
Loss for the year - (8,619) - (3,283) (11,902)
Share-based payment charge - - 9 - 9
At 30 April 2015 583 3,491 22 (546) 3,550
--------------------------- -------- -------- ----------- --------- --------
Share-based
Share Share Special payment Retained
capital premium reserve reserve earnings Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
------------------------------------- -------- -------- -------- ----------- --------- -------
At 1 May 2013 583 34,996 - - (15,971) 19,608
Cancellation of share premium
Transfer of share premium to special
reserve - (34,996) 34,996 - - -
Transfer of accumulated losses
at 30 April 2013 to special reserve - - (18,986) - 18,986 -
(Loss)/profit for the period to
date of capital restructure - - (1,400) - 60 (1,340)
Loss for the period post date
of capital restructure - - (2,500) - (338) (2,838)
Share-based payment charge - - - 13 - 13
At 30 April 2014 583 - 12,110 13 2,737 15,443
------------------------------------- -------- -------- -------- ----------- --------- -------
Consolidated statement of cash flows
for the year ended 30 April 2015
2015 2014
GBP000 GBP000
--------------------------------------------------------- -------- -------
Operating activities
Loss for the year before taxation (11,886) (4,707)
Adjustments for:
Share-based payment charge 9 13
Depreciation and impairment 7,645 1,793
Share of results of joint ventures (199) (188)
Dividends received from joint ventures 334 205
Interest received (1) (8)
Interest paid 868 80
Operating cash flows before movements in working capital (3,230) (2,812)
Increase in work in progress (1,515) (225)
Decrease in trade and other receivables 2,966 6,037
Increase/(decrease) in trade and other payables 2,160 (1,719)
Increase in provisions 148 -
Cash generated from operations 529 1,281
Income tax paid (16) (6)
Interest received 1 8
Interest paid (868) (80)
---------------------------------------------------------- -------- -------
Net cash (used by)/generated from operating activities (354) 1,203
---------------------------------------------------------- -------- -------
Investing activities
Purchase of property, plant and equipment (122) (11)
Net cash used by investing activities (122) (11)
---------------------------------------------------------- -------- -------
Financing activities
Proceeds from borrowings 1,400 600
Repayment of borrowings (166) (1,699)
Net cash generated from/(used by) financing activities 1,234 (1,099)
---------------------------------------------------------- -------- -------
Net increase in cash and cash equivalents 758 93
Cash and cash equivalents at the beginning of the
year 98 5
---------------------------------------------------------- -------- -------
Cash and cash equivalents at the end of the year 856 98
---------------------------------------------------------- -------- -------
Notes to the financial statements
1 Basis of preparation
The financial information set out in this preliminary
announcement does not constitute statutory accounts as defined in
Section 434 of the Companies Act 2006. The preliminary announcement
has been prepared in accordance with applicable standards as stated
in financial statements for the year ended 30 April 2015, being
based on the Group's financial statements which are prepared in
accordance with International Financial Reporting Standards as
adopted for use in the EU.
The Group's business activities, together with the factors
likely to affect its future development, performance and position
are set out in the Strategic report on pages 5 to 7, which also
describes the financial position of the Company, its cash flows,
liquidity position and borrowings. The Strategic report also gives
details of the Group's objectives, policies and processes for
managing its capital; its financial risk management objectives; and
its exposures to credit risk and liquidity risk.
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The Group finances itself from cash resources, project-specific
debt finance and borrowings from Lloyds Banking Group and other
debt providers. As set out in Note 15 to the financial statements,
the Group holds an overdraft and a loan with Lloyds Banking Group,
and a loan with Novus Lending Limited.
Ashley House plc's Lloyds overdraft facility remains at
GBP500,000 in line with the Group's borrowing requirements. This
overdraft, which is repayable on demand, is in place until 31
December 2015.
AH Scarborough Health Park Limited holds a bank loan with Lloyds
Banking Group totalling GBP883,000. The loan is secured by a first
charge over the freehold land and buildings held by that company
and a debenture over the Group's assets, and is being repaid over
the period to February 2019.
On 6 February 2014 the Group agreed a GBP2,000,000 development
finance facility with Novus Lending Limited, a company administered
by Rockpool Investments LLP, with an initial drawdown of GBP600,000
taking place on the same day. Further drawdowns of GBP1,062,500 and
GBP337,500 were made on 23 May 2014 and 8 July 2014 respectively,
and as such the facility is fully drawn. The facility repayable in
two tranches with GBP740,000 being due for repayment on 6 August
2016 and GBP1,260,000 on 23 November 2016 and is secured by a
charge over certain of the Group's assets, and a second charge over
the land owned by AH Scarborough Health Park Limited.
The current economic conditions create uncertainty particularly
over:
a) the level of new schemes required by the Company's social housing clients;
b) the level of new schemes required by the NHS;
c) the contribution earned to cover the cost base; and
d) the availability of finance within the sector.
The Group's forecasts and projections, taking account of
reasonably possible changes in trading performance, demonstrate
that the Group expects to operate within the level of its current
facilities. The nature of the Group's business is such that it is
exposed to risks around the timing of cash inflows, in particular
for design fees. Such payments are normally significant, occurring
at the end of the design process when a scheme reaches financial
close. The Group seeks to minimise its risk in this respect by
agreeing progress payments during the design process where possible
and by delivering design work in line with agreed timetables. Where
the Group acts as principal in construction contracts, the
projects' cashflows become regularised, usually with a positive net
monthly cash flow. The Group has consistently demonstrated its
ability to participate in projects within any constraints of
available finance on a project by project basis.
The directors have a reasonable expectation that the Company has
adequate resources to continue in operational existence for the
foreseeable future. The Group therefore continues to adopt the
going concern basis of accounting in preparing the annual financial
statements.
2 Earnings per ordinary share
The calculation of the basic earnings per share is based on the
loss attributable to ordinary shareholders divided by the weighted
average number of shares in issue during the year.
2015 2014
----------------------------------------- --------------------------------------
Weighted Weighted
Adjusted average Per share Adjusted average Per share
EBITDA Loss number amount EBITDA Loss number amount
GBP000 GBP000 of shares pence GBP000 GBP000 of shares pence
------------------- -------- -------- ---------- --------- ---------- ------- ---------- ---------
Basic and diluted
loss per share (11,902) 58,319,755 (20.41)p (4,178) 58,319,755 (7.16)p
------------------- -------- -------- ---------- --------- ---------- ------- ---------- ---------
Loss per share
based on adjusted
EBITDA* (3,390) 58,319,755 (5.81)p (2,068) 58,319,755 (3.55)p
------------------- -------- -------- ---------- --------- ---------- ------- ---------- ---------
* Adjusted EBITDA = EBITDA before exceptionals and impairment
plus income tax (charge)/credit.
No dividend was paid in the year ended 30 April 2015 (2014:
GBPnil).
3 Joint ventures and associates
The Group has the following joint ventures and associates which
are all incorporated in England and Wales:
Proportion held
----------------------------------------- ---------------
Infracare Group Limited 100% (A shares)
AHBB ELL Holdings Limited 100% (A shares)
AHBB LHIL Holdings Limited 100% (A shares)
IPC Plus Limited 50%
Wilco Plus Limited 50%
Best Practice (South of England) Limited 40%
Portsmouth Health Limited 33%
AHLP Pharmacy Limited 25%
Infracare Group Limited, AHBB ELL Holdings Limited, AHBB LHIL
Holdings Limited
These companies operate in the NHS LIFT (Local Improvement
Finance Trust) arena. The companies are public private partnerships
which provide purpose-built premises for health and local authority
services in England. The companies are jointly held and controlled
with Amber Infrastructure Group (Amber). The Group owns 100% of the
"A" shares in these companies, which gives control of development
activities. Amber owns 100% of the "B" shares which gives control
of investment activities and entitles them to protect existing
income streams from underlying investments and gives them the right
to future investment opportunities from the NHS LIFT pipeline of
projects. These companies do not trade but hold interests in
underlying NHS LIFT companies:
Infracare Group Limited Bristol Infracare LIFT Limited
Oxford Infracare LIFT Limited
Dudley Infracare LIFT Limited
AHBB ELL Holdings Limited East London LIFT Investments Limited
AHBB LHIL Holdings Limited Lift Healthcare Investments Limited
Whilst geographically diverse, the above companies all provide
identical services to their respective NHS bodies and are managed
as one investment by the Group, and therefore form one Cash
Generating Unit. These investments are presented below in aggregate
as LIFTCos.
The Group jointly controls IPC Plus Limited and Wilco Plus
Limited with groups of General Practitioners. These entities are
engaged in providing clinical services in West Sussex and Wiltshire
respectively.
The Group also owns a share in Best Practice (South of England)
Limited which provides a healthspace facility for use by local
healthcare practitioners in Hampshire. The company is owned with
two General Practitioners.
The Group also owns a share in Portsmouth Health Limited which
provides clinical services in Hampshire. The company is owned with
a group of General Practitioners and management.
Impairment
The Group conducted an impairment review of its investments in
joint ventures at 30 April 2015.
The carrying value of the LIFTCo investment was assessed against
the discounted future cash flows expected to be generated by that
asset. The expected future cash flows are taken from the Board's
latest projections which cover the period to 30 April 2018,
extrapolated to cover the remaining life of the arrangement. The
Board has assumed that cash flows remain flat from 2019 onwards.
The expected future cash flows are discounted using the Group's
weighted average cost of capital of 13.9% (2014: 13.8%). The
expected future cash flows consider the following factors:
management's expectations, based on historic experience and current
knowledge of the marketplace; both industry specific and national
expected growth rates; continued political uncertainty in the UK
health sector. As a result of these considerations, the asset has
been impaired by GBP7,555,000. The Board has assessed that, whilst
it anticipates the LIFT arrangements may still have value at the
end of their exclusivity periods, it is prudent to revise the
useful economic life to 9.5 years, the average remaining period of
exclusivity. The recoverable amount of the LIFTCo investment is
held at value in use.
3 Joint ventures and associates (continued)
Investments in joint ventures
2015 2014
GBP000 GBP000
---------------------------------------------------- ------- -------
LIFTCos 2,223 9,778
Other joint ventures 77 212
---------------------------------------------------- ------- -------
2,300 9,990
---------------------------------------------------- ------- -------
Movement in joint ventures in the reporting period:
Balance at 1 May 9,990 11,737
Share of total comprehensive income 199 188
Impairment charge (7,555) (1,722)
Reclassification from debtors - (8)
Dividends received (334) (205)
---------------------------------------------------- ------- -------
Balance at 30 April 2,300 9,990
---------------------------------------------------- ------- -------
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