TIDMASH
RNS Number : 9450M
Ashley House PLC
26 January 2016
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 GBP158m.
-- 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 GBP186.7m on 32 schemes (January 2015: 31
schemes GBP175.2m).
Six months ended 31 October 2015
-- Revenue significantly increased to GBP10.6m (2014: GBP5.6m).
-- EBITDA of GBP0.6m (2014: loss of GBP1.2m).
-- Profit before taxation GBP0.2m (2014: loss of GBP1.9m).
-- Net debt GBP2.6m (2014: GBP2.2m).
-- GBP10.7m of tax losses to be carried forward (2014: GBP8.2m).
"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 GBP0.6m at EBITDA level in the
first half of 2015/16 (2014/15: loss GBP1.2m) on a significantly
increased revenue of GBP10.6m (2014/15: GBP5.6m). This led to a
profit before taxation of GBP0.2m (2014/15: loss of GBP1.9m)
following interest and a small non-cash impairment of the LIFTCo
intangible of GBP0.2m. 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 GBP15m
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 GBP100m in 2016 and GBP500m 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 GBP2.6m at 31 October 2015
(2014: GBP2.2m). The Company's overdraft facility with Lloyds Bank
of GBP0.5m 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 GBP2.8m (2014: GBP3.8m) 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 31 October 30 April
2015 2014 2015
GBP000 GBP000 GBP000
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
GBP9.7m 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. Scheme No. Scheme No. Scheme
of Schemes value of Schemes value of Schemes value
to come to come to come
------------- ------------ ------------ ------------ ----------- ------------ ------------
On Site 2 GBP8.8m 2 GBP1.5m 4 GBP10.3m
------------- ------------ ------------ ------------ ----------- ------------ ------------
Appointed 17 GBP149.2m 11 GBP27.2m 28 GBP176.4m
------------- ------------ ------------ ------------ ----------- ------------ ------------
TOTAL 19 GBP158.0m 13 GBP28.7m 32 GBP186.7m
------------- ------------ ------------ ------------ ----------- ------------ ------------
Outlook
(MORE TO FOLLOW) Dow Jones Newswires
January 26, 2016 02:00 ET (07:00 GMT)
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
Condensed consolidated interim statement of comprehensive
income
Unaudited Unaudited Audited
6 months 6 months Year to
to to
31 October 31 October 30 April
2015 2014 2015
Note GBP000 GBP000 GBP000
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
Condensed consolidated interim balance sheet
Unaudited Unaudited Audited
31 October 31 October 30 April
2015 2014 2015
GBP000 GBP000 GBP000
------------------------------- ---------- ---------- --------
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
-------------------------------- ---------- ---------- --------
Condensed consolidated interim statement of changes in
equity
Share Special Share-based Retained Total
capital reserve payment reserve earnings equity
GBP000 GBP000 GBP000 GBP000 GBP000
---------------------------- ------- ------- --------------- -------- --------
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
----------------------------- ------- ------- --------------- -------- --------
Condensed consolidated interim cash flow statement
Unaudited Unaudited Audited
6 months 6 months Year to
to to
31 October 31 October 30 April
2015 2014 2015
GBP000 GBP000 GBP000
--------------------------------------- ---------- ---------- --------
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
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