TIDMASH
RNS Number : 0077E
Ashley House PLC
13 July 2016
Ashley House plc (the "Company" or "Group"), the Health and
Extra 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
2016.
Financial highlights:
Ø Significant revenue growth and return to profit
o Revenues increased by 147% to GBP20,737,000 (2015:
GBP8,384,000)
o Gross profit of GBP4,793,000 (2015: gross loss GBP216,000)
o Adjusted PBT (profit before tax, depreciation, impairment and
other operating income) of GBP1,160,000 (2015: adjusted loss before
tax of GBP4,241,000)
o Profit before tax GBP241,000 (2015: loss before tax
GBP11,886,000)
Ø Continuing management of overheads and debt
o Administrative expenses reduced by 4% to GBP3,226,000 (2015:
GBP3,357,000)
o Cash generated from operations of GBP559,000 (2015:
GBP529,000)
o Net debt reduced to GBP1,987,000 (2015: GBP2,027,000)
Operating highlights:
Ø Extra Care business is establishing itself
o Completion of first Extra Care scheme in Grimsby
o Signing of Funding and Partnering Agreement with Funding
Affordable Homes ("FAH")
o Two Extra Care developments on site, fully funded by FAH
o Pipeline of 18 schemes, on site (2) or appointed (16) with
GBP162.7m of revenue anticipated to be recognised
o Pipeline temporarily delayed as Government Benefit Policy on
elderly and vulnerable people being reassessed
Ø Activity continues in Health market
o Pipeline of 10 schemes, on site (1) or appointed (9) with
GBP20.6m of revenue anticipated to be recognised
o Three Health developments to go to site this year
o Write down (non-cash) of LIFT investment to a book value of
GBP768,000 (2015: GBP2,223,000)
o Disposal of LIFT Operations Management service
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 2016. 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 Strategic 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 12 July 2016 and signed on its behalf by:
Antony Walters
Chief Executive
Chairman's statement
I am delighted to report a return to profit for the Company for
the twelve months to 30 April 2016, in this our 25(th) year,
reflecting our continuing and focussed efforts in repositioning the
business in recent years. Whilst it has been a positive period for
the Company we continue to be frustrated by change and lack of
clarity in Government policy on elderly care as detailed below.
Despite this the Extra Care segment is now well established within
the business and is contributing positively to the Company's
results. The recent win at the Small Cap Awards where Ashley House
plc was named Social Impact Company of the year, is testament to
the progress we have made and the positive social impact our
schemes are delivering.
Results
Adjusted PBT (profit before tax, depreciation, impairment and
other operating income) for the year to 30 April 2016 was
GBP1,160,000 (2015: adjusted loss before tax of GBP4,241,000)
whilst revenue was almost two and a half times as much as the prior
year at GBP20,737,000 (2015: GBP8,384,000). Additionally we
continued to further invest in our pipeline as well as reducing net
debt slightly to GBP1,987,000 (2015: GBP2,027,000) as detailed in
the Strategic report.
Funding of the Company's pipeline through to completion is key
for our future success. A corollary of our business growth is a
rise in interest payable, and this has resulted in the Board
reconsidering its key profit metric. We have therefore moved away
from EBITDA (Earnings before interest, taxation, depreciation and
impairment) as our primary measure. EBITDA ignores the interest
charges which are now significant, and in future we will utilise
'Adjusted PBT' as the key metric. This still eliminates the
fluctuations from future impairments of the LIFT asset (which has
now been written down to GBP768,000) from the measure which is now,
other than taxation, the only major adjustment.
Extra Care
The completion of our first Extra Care scheme in Grimsby
together with last September's signing of the Funding and
Partnering Agreement with Funding Affordable Homes ("FAH") and its
property advisor SHA Housing Limited, were landmark events for the
Company. FAH is a social impact company which acquires affordable
housing to deliver financial and social returns for both
communities and investors. December saw the business enter into its
first contracts with FAH for the provision of full funding for
design and construction of two Extra Care developments in Essex
where upon completion FAH will become the long term owner. These
two schemes will generate revenues of around GBP21,000,000 by the
end of April 2017, of which only GBP8,880,000 has been recognised
in the year to April 2016.
The Extra Care pipeline is now providing a positive contribution
to the Company's results. In my report with the interim results in
January, I noted that the Chancellor had announced in the Autumn
Statement that Housing Benefit for tenants would be limited to the
Local Housing Allowance ("LHA") rate from April 2018 for new or
renewed tenancies taken out from 1 April 2016. This announcement
created the unintended consequence of depressing expected returns
on new social housing developments funded with third party finance
resulting in delays to new build projects whilst funders and Local
Authorities seek clarity. It is now clear that the Government
believes that the LHA rental cap does not work for Sheltered and
Supported Housing and is seeking a resolution to this issue.
Extensive industry consultations are in progress and a positive
solution is currently expected this autumn. Naturally, this has
caused delays in pushing forward some of the Extra Care pipeline
and may impact on our half year results. Despite this LHA cap
issue, the case for Extra Care is strong and we continue to
demonstrate the wider economic case to local councils. The
resolution of the cap, or the agreement of capital based models
that we are currently exploring, is expected to unlock our Extra
Care pipeline and enable the business to grow significantly.
Health
After a number of fallow years, we are now beginning to see some
limited activity return in this segment. Medical and health
professionals agree that there has been significant underinvestment
in primary care in recent years. Whilst activity has been low this
year, it has been profitable as the Company positions itself for an
upturn in the market.
Outlook
The Company is delighted to be celebrating 25 years since its
incorporation. Clearly the resolution of the LHA cap is a key issue
for the business, although the Company continues to work with Local
Authorities, Registered Providers and our specialist funder FAH to
find alternative and innovative ways of working together
irrespective of how this issue is resolved. Our ability to meet our
market expectations for the year to 30 April 2016 despite the LHA
cap issue is very encouraging, although it is important that this
is resolved soon to enable us to maximise the value from our Extra
Care pipeline and beyond.
Auditors
During the year the Board appointed Grant Thornton as the
Company's auditors. I would like to thank Deloitte for their work
over the past few years and welcome Grant Thornton.
Christopher Lyons
Chairman
12 July 2016
Strategic report
Formed 25 years ago, Ashley House is a social developer. Working
with commissioners and providers in the Health, Extra Care and
Community sectors we provide property solutions to help improve
outcomes for users of public sector services and those with
specialised social housing needs.
Principal activity
The principal activity of the Group is the supply of design,
construction management and consultancy, 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 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 2016
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.
We are delighted that the investment in previous periods in
building up our scheme pipeline has resulted in the Company
returning to profit this year. The business maintains a strong
pipeline and the ability to deliver the schemes will determine the
profitability of the Company in future periods. No income is
recognised on schemes until financial close and all expenditure
(other than land) is expensed immediately.
Key Performance Indicators
The Key Performance Indicators (KPIs) for the Company are
Adjusted Profit before Taxation (PBT) and the forward pipeline of
the business. As shown in the Highlights and Chairman's statement
above, Adjusted PBT (profit before tax, depreciation, impairment
and other operating income) for the year to 30 April 2016 was
GBP1,160,000 (2015: adjusted loss before tax of GBP4,241,000). The
Group's pipeline information is shown and discussed below.
Extra Care
The two Extra Care schemes on site, both funded by our new
funder for Extra Care, Funding Affordable Homes ("FAH") and leased
to the Registered Provider One Housing, are progressing well. The
first scheme in Harwich is on schedule to be completed by the end
of 2016 and consists of two buildings. The main building will
provide 58 stylish self-contained apartments spread over three
floors, and will also feature communal facilities including a
residents' lounge, restaurant and private courtyard garden. All of
the apartments will be available for affordable rent. The second
building will provide twelve self-contained apartments specifically
for adults with learning difficulties. The second scheme is in
Walton on the Naze and is due for completion in Spring 2017. This
independent living complex will feature 60 self-contained one and
two bed apartments which again will be available at affordable
rent. Both schemes will enable local older people with a care need
to continue to live independently with the added security of care
and support from One Housing Group's Season Homes. Both
developments were supported by a combined GBP4.1 million of grant
funding from Essex County Council through its Independent Living
programme. In the year we also completed a first scheme for HSN
Care for profoundly disabled adults and are proud to continue to
work with the charity Hft on schemes for people with learning
difficulties.
Health
Despite the limited Government funding in Primary Care, the
Company's Health segment performed well. We completed one GP
surgery in the year and two pathology laboratory schemes for our
partners Integrated Pathology Partnerships ("iPP"). We have also
signed contracts and gained planning permission and funding for a
major new diagnostic and treatment centre to the North East of
Durham. This is a creative building delivered via an innovative
contract structure and is a fine example of the combination of
knowledge experience and flexibility we bring to the NHS in these
difficult times.
Pipeline
The challenge of a large pipeline is not only to deliver it but
also to maintain it by bringing in new schemes. Our tender success
rate is good with our efficient offer supported by strong social
values, a key determinate in public tendering. We are pleased that
the pipeline has continued to grow notwithstanding almost GBP21m of
turnover having been realised and therefore removed from the
pipeline. We have sought to take a cautious view on pipeline
schemes removing a number where we remain appointed but can see no
obvious route to gaining NHS funding. Through a new joint venture
with a modular contractor we are discussing a 60 bed Extra Care
development and other housing schemes. Modern methods of
construction, including modular, are something we are exploring as
a way of increasing the speed and efficiency of the build programme
as well as improving the environmental impact and performance of
our developments which are of significant value to our clients.
Our Extra Care pipeline now stands at GBP162.7m across 18
schemes which has increased in value from GBP148.5m and 19
respectively in October of last year. The Health pipeline shows 10
schemes valued at GBP20.6m, compared with GBP31.9m across 13
schemes in October of last year as shown in the table below
Extra Care Health Total
No. of schemes Scheme value to No. of schemes Scheme value to No. of schemes Scheme value to
come come come
--------------- ---------------- --------------- ----------------- --------------- -----------------
On site 2 GBP12.2m 1 GBP0.1m 3 GBP12.3m
--------------- ---------------- --------------- ----------------- --------------- -----------------
Appointed 16 GBP150.5m 9 GBP20.5m 27 GBP171.0m
--------------- ---------------- --------------- ----------------- --------------- -----------------
TOTAL 18 GBP162.7m 10 GBP20.6m 30 GBP183.3m
--------------- ---------------- --------------- ----------------- --------------- -----------------
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 six 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.
Principal risks and uncertainties
The Group is exposed to a variety of risks which result from
both its operating and investing activities. The Board, through its
Audit & Risk Committee 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 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.
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 by the Director of Finance to the Chief Executive and
Commercial Director daily. The Board discusses liquidity and cash
flow projections monthly.
Political risk
Most of the Group's activities are ultimately funded by the
public sector and the Group is therefore exposed to risk of changes
to Government and to its policy as currently demonstrated by the
LHA cap outlined in the Chairman's statement. The Group employs
experience at Board and senior level as well as seeking knowledge
and advice from external advisers to enable it to remain aware and
to influence the outcome of the potential risks and to enable
lobbying to help mitigate them. The Group also strives to ensure it
maintains several distinct revenue streams in order to reduce the
impact on the Group's business as a whole arising from an adverse
change in any one Government policy. Other than the general
uncertainty and impact on Government resources and speed of
decision making, the result of the EU referendum is expected to
have a limited impact on the Group as our activities have minimal
exposure to clients or suppliers outside of the UK. Health and
social care are key issues for the UK and property solutions such
as those we provide are much needed for our aging population and
the housing shortage.
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 agreements signed with FAH mentioned above which gave us the
ability to forward fund our developments at Harwich and Walton
provided important cash income into the business. The Group prides
itself on the careful management of its cash resources, which this
year has enabled it to make a small reduction in its net debt to
GBP1,987,000 (2015: GBP2,027,000) as shown in the table below,
whilst the Group generated GBP559,000 (2015: GBP529,000) of cash
from operations. Elsewhere administrative overheads fell for the
fourth year in a row to GBP3,226,000 (2015: GBP3,357,000).
The borrowing on the land at Scarborough is held on a six year
loan, which is reducing at the rate of GBP17,500 per month,
although the land is expected to be used in a forthcoming Extra
Care scheme when the loan will be repaid. The continued focus on
cash management has to date enabled the Company to rebuild the
business without seeking further equity from shareholders. Net debt
at the end of year and the previous year is shown below:
2016 2015
GBP000 GBP000
Cash in bank 23 856
Scarborough (710) (883)
Loan (1,300) (2,000)
-----------
Net debt (1,987) (2,027)
----------- -----------
Employee share incentive scheme
In March 2016 the Company established a tax efficient employee
share scheme to improve employee engagement and staff retention. In
the last few years we have necessarily reduced headcount and staff
have faced uncertain times including two major redundancy
programmes. The future, whilst still challenging, is positive and
staff buy-in to what we are doing is crucial for future success.
Under the scheme, employees can invest up to GBP150 per month under
salary sacrifice. For every share he or she buys each employee
receives two "Matching shares" free of charge. The Matching shares
are available to the staff after three years assuming they remain
with the Company. We are delighted that more than 50% of staff have
signed up to the scheme across all levels and all functions in the
business. This take up is strong and reflects the commitment of the
staff to the Company.
Investments in joint ventures
The Company holds investments in seven LIFT Companies, a public
private partnership in the health sector. In December the Company
completed the novation of the rights under the operational
management service agreements with all seven LIFT Companies to MAMG
Limited, a major provider in this area. The Company retains its
shareholding in the LIFT Joint Ventures together with its rights as
development partner. As the LIFT investments have an exclusivity
period, which at the year end stood at 8.5 years, and as there is
currently limited work coming from LIFT, the directors considered a
further impairment was necessary. This non-cash impairment has
reduced the carrying value of the LIFT investment at the year end
to GBP768,000 (2015: GBP2,223,000).
Social impact
Ashley House remains very proud of the social value its work
creates, believing that positive social impact can be delivered
hand in hand with financial return. Ashley House is a founder
member of the Social Stock Exchange ("SSX") which seeks to connect
socially minded investors with companies socially accredited for
the work they undertake. During the year the Company's shares were
admitted to trading on the SSX social impact segment of the ISDX
Growth Market, the world's first regulated exchange dedicated to
businesses and investors seeking to achieve a positive social and
environmental impact through their activities. This dual listing
operates alongside our existing listing on AIM. We welcome
shareholders who have joined us this year through this exchange and
trust that Ashley House is now more visible to investors seeking
shares in companies with strong social values.
Ashley House was delighted to be named as Social Impact Company
of the year at the Small Cap Awards last month. This award
underlines the direct positive effect the Company's activities have
on the most vulnerable in society. The Small Cap awards seek to
recognise outstanding achievement in the quoted UK Small Cap market
(ie Companies with market capitalisation of less than GBP150m).
Examples of improvements to people's health and lives that have
directly resulted from the Company's activities will be provided in
this year's annual report and social impact report.
Summary
We are delighted to have returned to profit in this our 25(th)
year. The focus on our core business of developing Health, Extra
Care and Community properties and the reductions in corporate
overheads in recent years have positioned the business to take
advantage of its strong pipeline. We are now well diversified
across the health and social care landscape. Once the LHA rent cap
issue is resolved, as the industry expects, the improvements in
living standards, health outcomes and contribution to solving the
housing crisis that our Extra Care developments provide should
enable that area of the business to grow rapidly. This, coupled
with an increasing Health and Community development business, means
we look forward to the future with increasing confidence.
On behalf of the Board
Antony Walters Jonathan Holmes
Chief Executive Commercial Director
12 July 2016
Consolidated statement of comprehensive income
for the year ended 30 April 2016
2016 2015
Note GBP000 GBP000
------------------------------------------- ----- --------- ---------
Revenue 20,737 8,384
Cost of sales (15,944) (8,600)
------------------------------------------- ----- --------- ---------
Gross profit/(loss) 4,793 (216)
------------------------------------------- ----- --------- ---------
Administrative expenses (3,226) (3,357)
Depreciation and impairment (1,514) (7,645)
Share of results of joint ventures 97 199
Other operating income 581 -
Operating expenses (4,062) (10,803)
------------------------------------------- ----- --------- ---------
Operating profit/(loss) 731 (11,019)
Interest receivable 1 1
Interest payable (491) (868)
Profit/(loss) before taxation 241 (11,886)
------------------------------------------- ----- --------- ---------
Profit/(loss) before taxation 241 (11,886)
Other operating income (581) -
Depreciation and impairment 1,514 7,645
Depreciation, amortisation and taxation
included in share of results of joint
ventures (14) -
Adjusted profit/(loss) before taxation 1,160 (4,241)
----- ---------
Tax credit/(charge) 6 (16)
------------------------------------------- ----- --------- ---------
Profit/(loss) after tax for the year
attributable to equity holders of the
parent 247 (11,902)
Other comprehensive income - -
------------------------------------------- ----- --------- ---------
Total comprehensive income/(loss) for
the year 247 (11,902)
------------------------------------------- ----- --------- ---------
Basic and diluted profit/(loss) per
share 2 0.42p (20.41)p
------------------------------------------- ----- --------- ---------
Basic profit/(loss) per share on Adjusted
PBT* 2 1.99p (7.27)p
------------------------------------------- ----- --------- ---------
All of the activities of the Group are classed as
continuing.
* Adjusted PBT = Profit before taxation, depreciation,
impairment and other operating income.
Consolidated balance sheet
at 30 April 2016
2016 2015
GBP000 GBP000
------------------------------- ------- -------
Non-current assets
Property, plant and equipment 129 122
Investments in joint ventures 785 2,300
Deferred tax asset 1,400 1,400
Other receivables 760 807
3,074 4,629
------------------------------- ------- -------
Current assets
Work in progress 2,807 4,296
Trade and other receivables 5,616 3,055
Cash and cash equivalents 23 856
-------------------------------- ------- -------
8,446 8,207
------------------------------- ------- -------
Total assets 11,520 12,836
-------------------------------- ------- -------
Current liabilities
Trade and other payables (5,450) (6,255)
Bank borrowings and overdrafts (1,483) (883)
Provisions (56) (31)
-------------------------------- ------- -------
(6,989) (7,169)
------------------------------- ------- -------
Net current assets 1,457 1,038
-------------------------------- ------- -------
Non-current liabilities
Bank borrowings and overdrafts (527) (2,000)
Long term provisions (171) (117)
-------------------------------- ------- -------
Total liabilities (7,687) (9,286)
-------------------------------- ------- -------
Net assets 3,833 3,550
-------------------------------- ------- -------
Equity
Share capital 588 583
Share premium 43 -
Share-based payment reserve 10 22
Special reserve 3,248 3,491
Retained earnings (56) (546)
-------------------------------- ------- -------
Total equity 3,833 3,550
-------------------------------- ------- -------
Consolidated statement of changes in equity
for the year ended 30 April 2016
Share-based
Share Share payment Special Retained
capital premium reserve reserve earnings Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
At 1 May 2015 583 - 22 3,491 (546) 3,550
Total comprehensive income
for the year - - - (243) 490 247
Transactions with owners
Issue of shares to Ashley
House Share Incentive
Plan 5 43 - - - 48
Cancellation of previous
share option scheme - - (22) - - (22)
New share option scheme
charge - - 10 - - 10
At 30 April 2016 588 43 10 3,248 (56) 3,833
---------------------------- -------- -------- ----------- -------- --------- -------
Share-based
Share payment Special Retained
capital reserve reserve earnings Total
GBP000 GBP000 GBP000 GBP000 GBP000
At 1 May 2014 583 13 12,110 2,737 15,443
Total comprehensive loss
for the year - - (8,619) (3,283) (11,902)
Transactions with owners
Share-based payment charge - 9 - - 9
At 30 April 2015 583 22 3,491 (546) 3,550
---------------------------- -------- ----------- -------- --------- --------
Consolidated statement of cash flows
for the year ended 30 April 2016
2016 2015
GBP000 GBP000
-------------------------------------------- ------- --------
Operating activities
Profit/(loss) for the year before taxation 241 (11,886)
Adjustments for:
Share-based payment (credit)/charge (12) 9
Depreciation and impairment 1,514 7,645
Share of results of joint ventures (97) (199)
Dividends received from joint ventures 174 334
Interest received (1) (1)
Interest paid 491 868
Operating cash flows before movements
in working capital 2,310 (3,230)
Decrease/(increase) in work in progress 1,489 (1,515)
(Increase)/decrease in trade and other
receivables (2,514) 2,966
(Decrease)/increase in trade and other
payables (805) 2,160
Increase in provisions 79 148
Cash generated from operations 559 529
Income tax received/(paid) 6 (16)
Interest received 1 1
Interest paid (491) (868)
--------------------------------------------- ------- --------
Net cash generated from/(used by) operating
activities 75 (354)
--------------------------------------------- ------- --------
Investing activities
Purchase of shares in joint venture (17) -
Purchase of property, plant and equipment (66) (122)
Net cash used by investing activities (83) (122)
--------------------------------------------- ------- --------
Financing activities
Issue of ordinary shares 48 -
Proceeds from borrowings 600 1,400
Repayment of borrowings (1,473) (166)
Net cash (used by)/generated from financing
activities (825) 1,234
--------------------------------------------- ------- --------
Net (decrease)/increase in cash and cash
equivalents (833) 758
Cash and cash equivalents at the beginning
of the year 856 98
--------------------------------------------- ------- --------
Cash and cash equivalents at the end
of the year 23 856
--------------------------------------------- ------- --------
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 2016, 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 as above, which also describes
the financial position of the Group, 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.
The Group finances itself from cash resources, project-specific
debt finance and borrowings from Lloyds Banking Group and other
debt providers. 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 2016.
AH Scarborough Health Park Limited, a wholly-owned subsidiary
company, holds a bank loan with Lloyds Banking Group totalling
GBP710,000. 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.
The Group holds a GBP1,300,000 development finance facility with
Novus Lending Limited, a company administered by Rockpool
Investments LLP. The facility is repayable 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' cash flows become regularised after financial close,
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 Group 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
profit/(loss) attributable to ordinary shareholders divided by the
weighted average number of shares in issue during the year.
2016 2015
---------------------------------------- -----------------------------------------
Weighted Weighted
Adjusted average Per share Adjusted average Per share
PBT* Profit number amount PBT* Loss number amount
GBP000 GBP000 of shares pence GBP000 GBP000 of shares pence
------------------ -------- ------- ---------- --------- -------- -------- ---------- ---------
Basic and diluted
profit/(loss)
per share 247 58,355,706 0.42p (11,902) 58,319,755 (20.41)p
------------------ -------- ------- ---------- --------- -------- -------- ---------- ---------
Profit/(loss)
per share based
on adjusted
PBT* 1,160 58,355,706 1.99p (4,241) 58,319,755 (7.27)p
------------------ -------- ------- ---------- --------- -------- -------- ---------- ---------
* Adjusted PBT = Profit before taxation, depreciation,
impairment and other operating income.
No dividend was paid in the year ended 30 April 2016 (2015:
GBPnil).
3 Adoption of Financial Reporting Standard (FRS) 101 - Reduced
Disclosure Framework
A new UK Generally Accepted Accounting Practice (GAAP)
accounting framework introduced by the Financial Reporting Council
(FRC) becomes effective for the financial statements of UK
companies with accounting periods commencing on or after 1 January
2015. Under this new framework, Ashley House plc (the Company) is
required to elect to prepare its parent company financial
statements on one of the bases permitted by the FRC.
The Company proposes to adopt FRS 101 "Reduced Disclosure
Framework" for the preparation of the Company financial statements
for the year ended 30 April 2016 and on an ongoing basis until such
time as the Company notifies shareholders of any change.
There are no changes in accounting policies which have required
a restatement of the loss of the Company for the financial year
ended 30 April 2015, no changes to the Company's statement of
financial position, nor are any notes to the Company's financial
statements no longer required.
The consolidated Group financial statements of the Company will
continue to be prepared in accordance with International Financial
Reporting Standards as adopted by the European Union and are
unaffected by this new accounting framework.
The Company's election to adopt FRS 101 for its Company
financial statements does not require shareholder approval.
However, as stipulated in FRS 101, the Company is required to
notify all shareholders of this election. Any shareholder or
shareholders holding in aggregate 5% or more of the total allotted
shares in the Company may serve an objection to the use of the
disclosure exemptions. Objections must be served in writing and
delivered to the Company Secretary not later than 27 July 2016.
4 Publication of non-statutory accounts
The financial information set out above does not constitute the
Group's statutory accounts for the years ended 30 April 2016 or
2015, but is derived from those accounts. Statutory accounts for
2015 have been delivered to the Registrar of Companies and those
for 2016 will be delivered following the Company's annual general
meeting. The auditors have reported on those accounts; their
reports were unqualified, did not draw attention to any matters by
way of emphasis without qualifying their report and did not contain
statements under Section 498(2) or (3) Companies Act 2006.
The preliminary announcement was approved by the Board of
directors on 12 July 2016.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR LLLLFQDFZBBF
(END) Dow Jones Newswires
July 13, 2016 02:00 ET (06:00 GMT)
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