TIDMASH
RNS Number : 3476T
Ashley House PLC
14 November 2019
Ashley House plc
("Ashley House" or the "Company")
Change to Accounting Year End
Trading Update
Unaudited Interim Report Twelve months ended 30 April 2019
Ashley House plc, the health, housing and community property
partner announces that it has changed its accounting year-end from
30 June to 31 October with immediate effect.
The Company announced on 16 January 2019 that it was changing
its year-end to 30 June to better align its reporting period with
the half year of its then joint venture, Morgan Ashley Care
Developments LLP ("Morgan Ashley"). It was therefore due to report
on the fourteen months to 30 June 2019. On 21 October 2019, the
Company announced that it had sold its entire interest in Morgan
Ashley to its joint venture partner Morgan Sindall Investments
Limited.
Changing the Company's year-end to 31 October allows the full
accounts for the 18 month period to 31 October 2019 to include the
Company's complete share of the performance of Morgan Ashley up to
the date of its sale, together with the impact of the sale itself.
The directors believe that this will provide greater clarity for
shareholders and other users of the Company's accounts as the
finances relating to both the operations of and sale of interest in
Morgan Ashley will be contained within the same set of financial
statements and remove the requirement to spread this information
across separate financial accounting periods. The Company has
accordingly commenced the new financial year on 1 November 2019,
refocusing its activities on health, affordable housing and on its
modular construction business.
The decision to change the year-end has been approved by
Companies House and the Department of Business, Energy and
Industrial Strategy. As a consequence of this, the Company is today
publishing its unaudited Interim Report for the twelve month period
to 30 April 2019. The report and accounts for the 18 month period
from 1 May 2018 to 31 October 2019 will be released by the end of
March 2020.
Trading update
The Company also announces a trading update for the period up to
31 October 2019.
The Company provided a trading update on 9 May, 25 June, 5 July,
1 August and 2 September 2019. On 21 October 2019, the Company
completed the sale of its 50 per cent interest in Morgan Ashley, to
its then joint venture partner Morgan Sindall Investments Limited
("Transaction"). The total consideration for the Transaction was
GBP2,000,000 payable in cash, GBP500,000 of which is deferred and
expected to be received in instalments over the next twelve months,
including GBP200,000 which is dependent on monies being generated
from a particular scheme. The proceeds of the Transaction have been
deployed within key areas of focus and used to support the Group's
working capital requirements. Net debt at 31 October 2019 was
GBP1.5m, reduced from GBP1.8m at the end of April 2019. The terms
of the Transaction restrict Ashley House from working in the
elderly care housing sector for a period of three years. The
Company is therefore focussing its efforts on both driving
opportunities in the affordable housing market and on returning to
its core strength of developing schemes in the health and wellbeing
sector.
The affordable housing market is considerable and affords the
Company opportunities to work in conjunction with its majority
owned modular business, F1 Modular. The health and wellbeing sector
is where Ashley House commenced its activities in 1991 and where
the Company has an unparalleled track record and has retained
significant expertise. Furthermore, as part of the Transaction, the
Company acquired a pipeline of health and wellbeing developments
across established health partnerships within which Morgan Sindall
Investments is already working. The Company views this as an
opportunity to work closely with the NHS and partners (very much
the origins of the Ashley House business) to deliver much needed
innovative health, wellbeing and primary care facilities.
F1 Modular continues to grow and in the summer of 2019 achieved
the industry standard BOPAS (Build-offsite Property Assurance
Scheme) accreditation at the first attempt. The Company has
recently delivered two school classroom developments for the
Department of Education and is currently completing a 40 apartment
extra care facility in Aberdare, South Wales, a social housing
scheme in Corby and the Ashley House disabled living scheme in
Peterborough. More information can be found on F1 Modular's
website, www.f1modular.co.uk. A hotel is expected to commence in
the factory prior to the end of the calendar year.
The Company is currently undertaking a review of its skills and
resources across all levels and areas of the Business, whilst
reducing overheads in order to ensure that it is best placed to
refocus the business and exploit the various opportunities
presented to it. Twelve staff members transferred to Morgan Sindall
Investments under TUPE regulations and the central management
function of the Company is being restructured to be appropriate
going forward, resulting in cost savings.
Interim results for the twelve months ended 30 April 2019
The Company also announces its interim results for the unaudited
twelve month period to 30 April 2019 with the comparatives being
the audited twelve months to 30 April 2018.
Financial highlights
-- Revenue of GBP11.9m (2017/18: GBP18.5m) the reduction
reflecting that revenues earned in Morgan Ashley did not contribute
to Group revenues as the joint venture profits and losses were
reported only within share of results of joint ventures.
-- Loss before taxation GBP2.9m (2017/18: profit GBP0.8m).
-- Net debt GBP1.8m (2018: GBP1.5m).
Operating highlights
-- Focus in the period was to achieve financial close on Morgan Ashley developments.
-- Financial close was achieved on the Morgan Ashley schemes in
Grimsby and in Freshwater on the Isle of Wight in the twelve months
to 30 April 2019.
-- Ashley House was on site with schemes in Scarborough and
Peterborough at the end of April, together with two Morgan Ashley
schemes on the Isle of Wight and the scheme in Grimsby.
-- Morgan Ashley was sold to Morgan Sindall Investments in
October 2019. The Company is now refocusing its activity to its key
strengths as a developer of health and wellness buildings, as well
as driving opportunities for its majority owned modular business,
F1 Modular.
Christopher Lyons, Chairman, said:
"The delays experienced in closing schemes in Morgan Ashley
along with the commensurate increase in the cash investment
required, placed a significant burden on the Company and despite
exploring other avenues, it ultimately proved unsustainable. This
led to the disposal of the Company's interest in that joint
venture. The Company is now refocusing its interests in health
development and housing and looks to maximise the significant
potential seen in F1 Modular and particularly in the affordable
housing market."
The information contained within this announcement is deemed by
the Company to constitute inside information under the Market Abuse
Regulation (EU) No. 596/2014
Enquiries:
Ashley House plc
Antony Walters
Jonathan Holmes
James Hathaway 01628 600 340
WH Ireland Ltd
(Nominated Adviser and
broker)
Adrian Hadden
James Sinclair-Ford
Darshan Patel 0207 220 1666
Chairman's Statement
In the last few months, the Company experienced an extremely
challenging period precipitated largely by continued delays to
schemes within Morgan Ashley Care Developments LLP ("Morgan
Ashley"), at a time when F1 Modular was using rather than
generating cash. The delays within Morgan Ashley meant that rather
than that business being cash generative for the Group, it required
both joint venture partners to provide further working capital to
enable it to continue to invest in the schemes prior to them
reaching Financial Close. (Note, Financial Close is the key point
in each scheme's development and the point where, under the
Company's accounting policies, the majority of profit is
recognised). The effect was to place a significant and increasing
burden on the Company. This position ultimately proved to be
unsustainable and following a thorough examination of a number of
funding options, including both debt and equity, the disposal of
the Company's share in Morgan Ashley to Morgan Sindall Investments
was agreed and completed.
Results
The interim accounts show the unaudited results for the twelve
month period to 30 April 2019, incorporating the results for the
six month period to 31 October 2018 which were announced on 31
January 2019. In the six month period to 30 April 2019 financial
close was achieved on the Morgan Ashley schemes in Grimsby and
Freshwater, Isle of Wight. The schemes in Burnholme, York and in
Romsey achieved financial close in the following period and will be
included in the results of the eighteen months to 31 October
2019.
The loss before taxation in the six months to 30 April 2019 was
GBP1.2m, on revenue of GBP7.2m giving a total loss for the twelve
month period to that date of GBP2.9m on revenue of GBP11.9m (year
to 30 April 2018 profit GBP0.8m on revenue of GBP18.5m). Note,
revenues earned in Morgan Ashley did not contribute to Group
revenues as the joint venture profits and losses were reported only
within share of results of joint ventures.
Net debt
The table below shows net debt of GBP1.8m at 30 April 2019
(2018: GBP1.5m) which reduced to GBP1.5m at the end of October
2019.
Unaudited Unaudited Audited
31 October 30 April 30 April
2019 2019 2018
GBP000 GBP000 GBP000
Cash in bank (286) (257) 250
Loan on Scarborough
land (35) (137) (338)
Loan - Invescare (1,085) (1,295) (1,295)
Loan F1M (109) (109) (109)
-----------
(1,515) (1,798) (1,492)
----------- ---------- ---------
The loan relating to Scarborough continues to be repaid at the
rate of GBP17,500 per month and will be fully repaid during
December 2019. The Invescare loan balance has reduced since 30
April 2019 and will reduce further over the coming months. The
Company's bank overdraft facility is currently set at GBP950,000
until 31 December 2019 and it is expected to be renewed for a
further twelve months, albeit potentially at a slightly reduced
level.
Annual General Meeting
The notice of the Annual General Meeting, scheduled to be held
in London on Tuesday 10 December 2019, is being posted to
shareholders today and will shortly be available on the Company's
website www.ashleyhouseplc.com.
Outlook
The Company has weathered a very difficult trading period. The
delays in scheme closures were a significant issue for the Company
leading to the sale of its interest in Morgan Ashley. The resultant
reduction in head count and in overheads is enabling the Company to
refocus the business. Whilst this process will take some time the
Board wishes to thank the Company's shareholders and staff for
their continued patience and will ensure they remain updated as the
revised strategy is finalised and implemented.
Christopher Lyons
14 November 2019
Condensed consolidated interim statement of comprehensive
income
Unaudited Audited
12 months to Year to
30 April 30 April
2019 2018
Restated
Note GBP000 GBP000
Revenue 11,923 18,474
Cost of sales (10,329) (14,703)
-------------------------------------- ---- ------------ --------
Gross profit 1,594 3,771
Administrative expenses (4,083) (3,411)
Depreciation (96) (101)
Profit on disposal of property, plant
& equipment 2 11
Reversal of impairment - 512
Share of results of joint ventures (153) 513
Operating (loss)/profit (2,736) 1,295
Interest payable (210) (490)
-------------------------------------- ---- ------------ --------
(Loss)/profit before taxation (2,946) 805
-------------------------------------- ---- ------------ --------
Tax credit - -
-------------------------------------- ---- ------------ --------
Total comprehensive (expense)/income
for the period (2,946) 805
-------------------------------------- ---- ------------ --------
Basic and diluted (loss)/earnings per
share 3 (4.90)p 1.35p
-------------------------------------- ---- ------------ --------
Condensed consolidated interim balance sheet
Unaudited Audited
30 April 30 April
2019 2018
Restated
GBP000 GBP000
--------------------------------- --------- --------
Non-current assets
Property, plant and equipment 151 139
Investments in joint ventures 1,646 1,952
Deferred tax asset 1,400 1,400
Goodwill 415 415
3,612 3,906
--------------------------------- --------- --------
Current assets
Inventories and work in progress 2,077 1,877
Trade and other receivables 5,564 6,364
Cash and cash equivalents 21 250
---------------------------------- --------- --------
7,662 8,491
--------------------------------- --------- --------
Total assets 11,274 12,397
---------------------------------- --------- --------
Current liabilities
Trade and other payables (6,643) (4,888)
Bank borrowings and overdrafts (1,819) (1,742)
Provisions (48) (48)
(8,510) (6,678)
--------------------------------- --------- --------
Net current assets (848) 1,813
Non-current liabilities
Finance lease payable (65) (91)
Long term provisions (56) (108)
Total liabilities (8,631) (6,877)
---------------------------------- --------- --------
Net assets 2,643 5,520
---------------------------------- --------- --------
Equity
Share capital 604 598
Share premium 172 116
Share-based payments reserve 56 49
Special reserve 1,184 3,113
Non-controlling interest (535) (294)
Retained earnings 1,162 1,938
---------------------------------- --------- --------
Total equity 2,643 5,520
---------------------------------- --------- --------
Condensed consolidated interim statement of changes in
equity
Share Share Share-based Special Non-controlling Retained Total
capital Premium payment reserve Interest earnings equity
reserve
GBP000 GBP'000 GBP000 GBP000 GBP000 GBP000 GBP000
------------------------------------ ------- ------- ----------- ------- --------------- -------- -------
Balance at 1 May 2018 (restated) 598 116 49 3,113 (294) 1,938 5,520
Total comprehensive expense for
the period - - - (1,929) (241) (776) (2,946)
Transaction with owners
Issue of shares to Ashley House
Share Incentive Plan 6 56 - - - - 62
Share-based payments charge - - 7 - - - 7
Balance at 30 April 2019 604 172 56 1,184 (535) 1,162 2,643
------------------------------------ ------- ------- ----------- ------- --------------- -------- -------
Balance at 1 May 2017 (restated) 594 82 31 3,113 (4) 843 4,659
Total comprehensive income for
the year - - - - (290) 1,095 805
Transaction with owners
Issue of shares to Ashley House
Share Incentive Plan 4 34 - - - - 38
Share-based payments charge - - 18 - - - 18
Balance at 30 April 2018 (restated) 598 116 49 3,113 (294) 1,938 5,520
------------------------------------ ------- ------- ----------- ------- --------------- -------- -------
Condensed consolidated interim statement of cash flows
Unaudited Audited
12 months to Year to
30 April 30 April
2019 2018
GBP000 GBP000
--------------------------------------------------- ------------ --------
Operating activities
(Loss)/profit before taxation (2,946) 805
Adjustments for:
Share-based payments charge 7 18
Depreciation 96 101
Profit on disposal of fixed assets (2) (11)
Reversal of impairment - (512)
Share of results of joint ventures 153 (513)
Dividends received from joint ventures 153 698
Interest paid 210 490
Operating cash flows before movements in
working capital (2,329) 1,076
(Increase)/decrease in work in progress (200) 2,045
Decrease/(increase) in trade and other receivables 800 (1,234)
Increase/(decrease) in trade and other payables 1,729 (317)
Decrease in provision (52) (60)
--------------------------------------------------- ------------ --------
Cash (used by)/generated from operations (52) 1,510
Interest paid (210) (490)
--------------------------------------------------- ------------ --------
Net cash (used by)/ generated from operating
activities (262) 1,020
Investing activities
Purchase of property, plant and equipment (108) (145)
Proceeds from disposal of property, plant
and equipment 2 142
Net cash used by investing activities (106) (3)
Financing activities
Issue of ordinary shares 62 38
Proceeds from borrowings - 200
Repayment of borrowings (201) (1,094)
--------------------------------------------------- ------------ --------
Net cash used by financing activities (139) (856)
Net (decrease)/increase in cash and cash
equivalents (507) 161
Cash and cash equivalents at beginning of
period 250 89
--------------------------------------------------- ------------ --------
Cash and cash equivalents at end of period (257) 250
--------------------------------------------------- ------------ --------
Notes to the condensed consolidated interim financial
statements
1 Nature of operations
The principal activity of the Group during the period was 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.
Ashley House's condensed consolidated interim financial
statements (the interim financial statements) are presented in
pounds sterling (GBP), which is also the functional currency of the
parent company. These interim financial statements were approved
for issue by the Board of directors on 13 November 2019.
The financial information set out in these interim financial
statements does not constitute statutory accounts as defined in
Section 434 of the Companies Act 2006. The Group's statutory
financial statements for the year ended 30 April 2018 have been
filed with the Registrar of Companies. The auditor's report on
those financial statements was unqualified and did not contain a
statement under Section 498(2) of the Companies Act 2006.
2 Basis of preparation
These unaudited interim financial statements are for the twelve
months ended 30 April 2019. They have been prepared following the
recognition and measurement principles of IFRS. They do not include
all of the information required for full annual financial statement
and should be read in conjunction with the consolidated financial
statements of the Group for the year ended 30 April 2018.
These interim financial statements have been prepared on the
going concern basis, under the historical cost convention, except
for the revaluation of certain financial instruments which are
carried at fair value.
These interim financial statements are the first financial
statements to have been prepared by the Company in accordance with
IFRS15 Revenue from Contracts with Customers. The comparative
information presented for the year to 30 April 2018 has been
restated to be compliant with the requirements of IFRS15.
In the comparative period to 30 April 2018 profit before tax is
GBP947,000 lower and net assets are GBP22,000 higher than
previously reported. Full details of the impact of the adoption of
IFRS15 will be provided in the Annual Report and Accounts for the
18 months to 31 October 2019.
In all other respects these interim financial statements have
been prepared in accordance with the accounting policies adopted in
the last annual financial statements for the year to 30 April
2018.
3 Earnings per share
The calculation of the basic earnings per share is based on the
(loss)/profit attributable to ordinary shareholders divided by the
weighted average number of shares in issue during the period.
Weighted
average Per share
Loss number amount
12 months to 30 April 2019 GBP000 of shares Pence
--------------------------------- ------- ---------- ---------
Basic and diluted loss per share (2,946) 60,118,299 (4.90)p
--------------------------------- ------- ---------- ---------
Weighted
average Per share
Profit number amount
Year to 30 April 2018 (restated) GBP000 of shares Pence
------------------------------------- ------ ---------- ---------
Basic and diluted earnings per share 805 59,696,089 1.35p
------------------------------------- ------ ---------- ---------
Company information
Company registration number
02563627
Registered office
Unit 1, Barnes Wallis Court
Wellington Road
Cressex Business Park
High Wycombe
HP12 3PS
Directors
C P Lyons Non-executive Chairman
A J Walters Chief Executive
J Holmes Commercial Director
J A J Hathaway Finance Director
A J Willetts Non-executive director
Secretary
J A J Hathaway
Nominated Adviser and Broker
W H Ireland Limited
24 Martin Lane
London EC4R 0DR
Bankers
Lloyds Banking Group
High Street
Slough
Berkshire SL1 1DH
Solicitors
Addleshaw Goddard LLP
One St Peter's Square
Manchester M2 3DE
Auditor
Grant Thornton UK LLP
3140 Rowan Place
John Smith Drive
Oxford Business Park South
Oxford OX4 2WB
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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