TIDMASH
RNS Number : 3325S
Ashley House PLC
02 October 2017
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
2017.
Financial highlights:
Ø Group remained profitable but behind last year
o Revenues reduced by 10% to GBP18,565,000 (2016:
GBP20,737,000)
o Gross profit of GBP3,631,000 (2016: GBP4,793,000)
o Adjusted PBT (profit before tax, depreciation, impairment and
other operating income) of GBP53,000 (2016: GBP1,160,000)
o Profit before tax of GBP67,000 (2016: GBP241,000)
Ø Continuing management of overheads and debt whilst strategic
acquisition completed
o Administrative expenses reduced by 7% to GBP3,008,000 (2016:
GBP3,226,000)
o Cash generated from operations of GBP996,000 (2016:
GBP559,000)
o Net debt increased to GBP2,547,000 (2016: GBP1,987,000) partly
to finance acquisition
Operating highlights:
Ø Housing pipeline continues to build, although delivery still
held up by Government
o Completion of two extra care housing schemes, in Harwich and
Walton-on-the-Naze
o Pipeline of 23 appointed schemes with GBP197.9m of revenue
anticipated to be recognised
o Almost two year delay to extra care housing pipeline as
Government benefit policy on elderly and vulnerable people
continues to be reassessed. The Company however now believes this
may shortly be unlocked
Ø Activity continues in Health market
o Pipeline of 5 schemes, on site (3) or appointed (2) with
GBP14.1m of revenue anticipated to be recognised
o Three health developments currently on site
Ø Strategic capability enhanced through acquisition of off-site
manufacturing business
o Through F1 Modular, the Group now has off-site manufacturing
capability
o The acquisition provides supply chain benefits as well as
access to an extended range of sectors
o Two modular social housing schemes currently on site
o Growing pipeline of schemes across housing, education and
retail
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
Ed Allsopp
James Sinclair-Ford
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 2017. 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 29 September 2017 and signed on its behalf by:
Antony Walters
Chief Executive
Chairman's statement
As expected the Company made a small profit for the year to 30
April 2017. With the continued back drop of a lack of clarity from
Government on their policy on elderly care (the LHA cap issue
mentioned below), the business continues to build its pipeline
whilst a solution is found to unlock the development of these much
needed facilities. Recent developments with funders and Registered
Providers now being prepared to proceed despite the Government's
procrastination, means there is a real expectation that schemes can
start to be built out which will be the catalyst for growth in the
coming months and years.
Results
Profit before tax for the year to 30 April 2017 was GBP67,000
(2016: GBP241,000) whilst adjusted PBT (profit before tax,
depreciation, impairment and other operating income) for the year
to 30 April 2017 was GBP53,000 (2016: GBP1,160,000). Revenue was
slightly behind last year at GBP18,565,000 (2016: GBP20,737,000).
The Company continued to further invest in its pipeline and
completed an acquisition both partly financed by an increase in net
debt to GBP2,547,000 (2016: GBP1,987,000) as detailed in the
Strategic report.
Strategic acquisition of modular capability
A significant corporate development this year was the Company's
increased involvement in F1 Modular Limited (F1M) and the
acquisition by F1M in March this year of the assets of an
experienced offsite manufacturer. F1M is now a 76% subsidiary of
Ashley House plc with the remaining shares held by F1M management.
The business operates from its leased 70,000 square feet factory in
mid Wales. Modern Methods of Construction (MMC) is receiving a
significant amount of positive press in relation to the housing
crisis including the White Paper on Housing published in February
this year. The quality and energy efficiency of the housing and
other developments F1M produces is excellent and it has one of the
few systems that meet 2015 Building Regulations. F1M has a growing
pipeline with places on Local Authority frameworks LHC1 and LHC3
and most recently obtained a place (through Ashley House) on the
new ESFA schools framework. The business works in the private
sector building retail units and housing although it is
increasingly focussing on satisfying demand in the affordable
housing and education sectors. F1M is currently in production with
a pilot scheme of affordable houses in Banbury and social housing
bungalows in Consett, County Durham. Further information is
provided in the Strategic report.
Housing
The last few months has seen the successful completion of two
further extra care housing facilities in Harwich and Walton, both
for Essex County Council and Tendring District Council. These two
developments are leased to Season, a subsidiary of the Registered
Provider One Housing Group. Both schemes were funded by Funding
Affordable Homes and supported by grants from Essex County
Council.
The Company has continued to extend its housing pipeline
although the delivery of these schemes continues to be delayed by
Government's intention to restrict Housing Benefit to the Local
Housing Allowance ("LHA") rate, which is substantially below the
re-imbursement tenants in extra care housing schemes require. As
stated in last year's report, the Government's announcement
relating to LHA had the unintended consequence of halting new extra
care housing developments. Whilst Government subsequently agreed to
support people needing extra care with 'top-up' funding it is still
not clear what form this will take and without clarity funders,
Local Authorities and Registered Providers have been unable to
contract on schemes.
The ageing population coupled with the housing crisis ensure
that the demand for extra care housing remains very strong. We
believe a Government resolution to the issue of the cap is close
but in the meantime the Company has been working with funders and
Registered Providers to create contractual structures that allow us
to proceed with developments despite the resolution of this issue
remaining unclear. This means that schemes are at last being worked
up to completion and will proceed to site in the coming months.
Health
Despite the continuing difficulties with Government funding in
the health segment, the Company is currently on site with three
health developments, including the Diagnostic and Treatment Centre
in Durham.
Outlook
The challenges the business has faced over the last couple of
years are clear as the resolution to the issue of the LHA cap is
awaited. In that time the Company has continued to build its
housing pipeline and has carefully managed its cost base. The first
half of the current financial year has to date been challenging
with no schemes reaching financial close, but an agreement with new
partners will mean a much improved outlook for the second half and
beyond.The Company has increased its net debt and is working to
extend and widen its financing options to ensure it is able to
continue to invest in its pipeline as new agreements with funders
and Registered Providers are developed and the delivery of the
pipeline is accelerated. Coupled with the new investment in the
modular business, the Company is well placed to benefit from the
demands of the housing market and ageing population which have been
well documented.
Christopher Lyons
Chairman
29 September 2017
Strategic report
Ashley House is a social developer with a rich history of making
significant improvements to the health and social housing needs of
our clients and their patients and residents. Working with
commissioners and providers in the health, social housing and
community sectors our property solutions help some of the most
vulnerable in society with specialised social housing needs and
improved health outcomes.
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.
During the year the Group has added an offsite modular construction
capability through its 76% subsidiary, F1 Modular Limited.
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 2017
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.
In recent years the Company has developed a significant pipeline
of mostly housing schemes that rely on housing benefit for their
rental streams. In the last few months the Company has completed
two such extra care housing schemes in Harwich and Walton on the
Naze. As detailed below the Board is confident that the delivery of
the pipeline is now being unblocked and that will enable increased
profitability to be derived in the coming years. Unless it is clear
that it can be recovered, 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 2017 was
GBP53,000 (2016: GBP1,160,000). The Group's pipeline has grown by
16% and information pertaining to this is shown and discussed
below.
The Company operated in two main sectors in the year, housing
and health:
Housing
During the past few months the two extra care housing schemes on
site at Harwich and Walton on the Naze have completed and are now
open. Both developments were funded by our partner, Funding
Affordable Homes ("FAH") and leased to the Registered Provider One
Housing. The Harwich development consists of two buildings with a
total of 70 one and two bedroomed self-contained apartments spread
over three floors, and also featuring communal facilities including
a residents' lounge, restaurant and private courtyard garden.
Walton on the Naze features 60 self-contained one and two bedroomed
apartments with similar communal facilities. Both schemes enable
local older people with care needs to continue to live
independently with the added security of care and support from One
Housing Group's Season Homes care and support service. These
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 two developments for the
charity HFT, one a block of seven flats for people with learning
disabilities and the other a twelve bed unit for residents with
dementia.
Health
Despite the continuing limited Government funding in primary
care the Company is currently on site with two GP surgeries in
Swansea and Wivenhoe, Essex as well as a diagnostic and treatment
centre located to the North East of Durham. The Swansea project
also includes a family centre provided by the Council and supported
by grant funding from the Welsh Assembly. All three health projects
are funded by our partners Assura. In the year we also completed
the refurbishment of laboratory facilities in Basildon
Hospital.
Pipeline
The effective Government hold since late 2015 on funding extra
care housing developments has restricted our ability to reach
financial close on many of our pipeline schemes. However, we have
continued to grow the pipeline during the year including adding
schemes such as Care Homes that are not dependent on the resolution
of the LHA cap. In addition to the pipeline below there are a
growing number of schemes being worked on in both the Ashley House
and the F1 Modular business.
Our housing (largely extra care) pipeline now stands at
GBP197.9m across 23 schemes which has increased from GBP162.7m and
18 schemes last year. The health pipeline shows five schemes valued
at GBP14.1m, compared with GBP20.6m across ten schemes last year as
shown in the table below
Housing Health Total
----------- --------------------- --------------------- ---------------------
No. of Scheme No. of Scheme No. of Scheme
schemes value to schemes value to schemes value to
come come come
----------- --------- ---------- --------- ---------- --------- ----------
On site - - 3 GBP8.7m 3 GBP8.7m
----------- --------- ---------- --------- ---------- --------- ----------
Appointed 23 GBP197.9m 2 GBP5.4m 25 GBP203.3m
----------- --------- ---------- --------- ---------- --------- ----------
TOTAL 23 GBP197.9m 5 GBP14.1m 28 GBP212.0m
----------- --------- ---------- --------- ---------- --------- ----------
To be an 'appointed' scheme on our pipeline, where relevant we
will have the following: broad support from commissioners and
occupiers; an identified site; planning consent or positive
engagement with the planning authority; an identified expected end
owner and a reasonable understanding of costs and revenues.
Schemes are typically on site for 6 to 18 months. The current
schemes on site have a weighted average remaining life of
approximately ten months. Where the Company is appointed the time
frame to move to on site is likely to be between 6 and 24 months.
Revenues are only recognised from when schemes are contracted 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, general bank facilities and
borrowings from directors and connected parties. 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 at monthly Board meetings and in between meetings
as required.
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 above. The Group employs experienced professionals
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, and the acquisition of F1
Modular this year has further advanced that policy. Health and
social care are key issues for the UK and property solutions such
as those Ashley House provides 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 Group has longstanding experience in the careful management
of its cash resources. Despite a break even position the Company
generated GBP996,000 (2016: GBP559,000) of cash from operations.
Part of this was used to finance the F1 Modular acquisition but the
continued inability to push on with the housing pipeline meant that
net debt needed to increase. The Board was pleased to see that
administrative overheads fell for the fifth year in a row to
GBP3,008,000 (2016: GBP3,226,000). We continue to work to add more
funding and financing capacity to enable the Company to continue to
build and to deliver its significant pipeline of schemes.
The Lloyds Bank 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 will be used in a forthcoming extra care
housing scheme at which point some of the loan may be repaid.
During the year the debt provided by Rockpool was repaid and
refinanced by a loan provided by Invescare, a related party. This
was later supplemented by a further GBP500,000 loan from Deputy
Chairman Stephen Minion. Net debt at the end of year and the
previous year is shown below:
2017 2016
GBP000 GBP000
Cash in bank 89 23
Scarborough (527) (710)
Loan (1,500) (1,300)
Director's
loan (500) -
Loan F1M (109) -
-----------
Net debt (2,547) (1,987)
-------- -----------
Social impact
Ashley House is proud to be a 'Social Developer'. The Company
strives to ensure that its work provides social value to the
communities which benefit from its developments. Ashley House
remains an active member of the Social Stock Exchange ("SSX") and
maintains its listing on both AIM and the SSX social impact segment
of the NEX Exchange 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.
The acquisition of F1 Modular further strengthened this approach to
social value as the quality and environmental performance of the
modules is exceptional and its use with social housing in
particular provides an additional benefit of tackling fuel poverty.
The Company will issue its fifth annual social impact report in the
next few weeks. Copies will be available at the registered office
and on the website.
Summary
Whilst profitable in the year, the Company has not been able to
advance anywhere near as fast as it would have liked due to the
continuing uncertainty created by the LHA cap. However, new
arrangements with specialist funders and Registered Providers mean
that it is very likely that this will be unlocked in the coming
months. In the meantime it is important that the Company continues
to broaden its financing and funding options working with
specialist funders, debt providers and others. The acquisition of
F1 Modular is a key strategic development for the Company, not only
providing control over part of its supply chain but also presenting
additional access to new areas of development and especially
education as demonstrated by the successful inclusion on two new
frameworks.
The Company is now well diversified across the health and social
care landscape and once the housing pipeline is fully unlocked
there is expectation that the business will grow rapidly. This,
coupled with the new modular business, means we look forward to the
future with increasing confidence.
On behalf of the Board
Antony Walters Jonathan Holmes
Chief Executive Commercial Director
Consolidated statement of comprehensive income
for the year ended 30 April 2017
2017 2016
Note GBP000 GBP000
-------------------------------------------- ----- --------- ---------
Revenue 18,565 20,737
Cost of sales (14,934) (15,944)
-------------------------------------------- ----- --------- ---------
Gross profit 3,631 4,793
-------------------------------------------- ----- --------- ---------
Administrative expenses (3,008) (3,226)
Depreciation (59) (59)
Reversal of impairment / (impairment
charge) 73 (1,455)
Share of results of joint ventures 185 97
Other operating income - 581
Operating expenses (2,809) (4,062)
-------------------------------------------- ----- --------- ---------
Operating profit 822 731
Interest receivable - 1
Interest payable (755) (491)
Profit before taxation 67 241
-------------------------------------------- ----- --------- ---------
Profit before taxation 67 241
Other operating income - (581)
Depreciation 59 59
(Reversal of impairment) / impairment
charge (73) 1,455
Depreciation, amortisation and taxation
included in share of results of joint
ventures - (14)
Adjusted profit before taxation 53 1,160
-------------------------------------------- ----- --------- ---------
Tax credit - 6
-------------------------------------------- ----- --------- ---------
Profit after tax for the year attributable
to equity holders of the parent 67 247
Other comprehensive income - -
-------------------------------------------- ----- --------- ---------
Total comprehensive income for the
year 67 247
-------------------------------------------- ----- --------- ---------
Attributable to:
Equity shareholders on the parent company 55 247
Non-controlling interests 12 -
-------------------------------------------- ----- --------- ---------
Basic and diluted profit per share 2 0.11p 0.42p
-------------------------------------------- ----- --------- ---------
Basic profit per share on Adjusted
PBT* 2 0.09p 1.99p
-------------------------------------------- ----- --------- ---------
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 2017
2017 2016
GBP000 GBP000
--------------------------------- ------- -------
Non-current assets
Property, plant and equipment 226 129
Investments in joint ventures 1,137 785
Deferred tax asset 1,400 1,400
Goodwill 415 -
Other receivables 387 760
3,565 3,074
--------------------------------- ------- -------
Current assets
Inventories and work in progress 2,953 2,807
Trade and other receivables 5,231 5,616
Cash and cash equivalents 89 23
---------------------------------- ------- -------
8,273 8,446
--------------------------------- ------- -------
Total assets 11,838 11,520
---------------------------------- ------- -------
Current liabilities
Trade and other payables (5,296) (5,450)
Bank borrowings and overdrafts (2,300) (1,483)
Provisions (79) (56)
---------------------------------- ------- -------
(7,675) (6,989)
--------------------------------- ------- -------
Net current assets 598 1,457
---------------------------------- ------- -------
Non-current liabilities
Bank borrowings and overdrafts (336) (527)
Long term provisions (137) (171)
---------------------------------- ------- -------
Total liabilities (8,148) (7,687)
---------------------------------- ------- -------
Net assets 3,690 3,833
---------------------------------- ------- -------
Equity
Share capital 594 588
Share premium 82 43
Share-based payment reserve 31 10
Special reserve 3,113 3,248
Non-controlling interest (4) -
Retained earnings (126) (56)
---------------------------------- ------- -------
Total equity 3,690 3,833
---------------------------------- ------- -------
Consolidated statement of changes in equity
for the year ended 30 April 2017
Share-based Non-
Share Share payment Special controlling Retained
capital premium reserve reserve interest earnings Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
At 1 May 2016 588 43 10 3,248 - (56) 3,833
Total comprehensive income
for the year - - - (135) 12 190 67
Non-controlling interest
adjustment arising on
acquisition of F1 Modular
Limited - - - - (14) - (14)
Non-controlling interest
adjustment arising on
increase in shareholding
in F1 Modular Limited - - - - (2) - (2)
Charge to equity arising
on increase in shareholding
in F1 Modular Limited - - - - - (260) (260)
Transactions with owners
Issue of shares to Ashley
House Share Incentive
Plan 6 39 - - - - 45
New share option scheme
charge - - 21 - - - 21
At 30 April 2017 594 82 31 3,113 (4) (126) 3,690
----------------------------- -------- -------- ----------- -------- ------------ --------- -------
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
---------------------------- -------- -------- ----------- -------- --------- -------
Consolidated statement of cash flows
for the year ended 30 April 2017
2017 2016
GBP000 GBP000
--------------------------------------------- ------- -------
Operating activities
Profit for the year before taxation 67 241
Adjustments for:
Share-based payment charge/(credit) 21 (12)
Depreciation 59 59
(Reversal of impairment) / impairment
charge (73) 1,455
Share of results of joint ventures (185) (97)
Dividends received from joint ventures 185 174
Interest received - (1)
Interest paid 755 491
Operating cash flows before movements
in working capital 829 2,310
(Increase)/decrease in work in progress (146) 1,489
Decrease/(increase) in trade and other
receivables 478 (2,514)
Decrease in trade and other payables (154) (805)
(Decrease)/increase in provisions (11) 79
Cash generated from operations 996 559
Income tax received - 6
Interest received - 1
Interest paid (755) (491)
---------------------------------------------- ------- -------
Net cash generated from operating activities 241 75
---------------------------------------------- ------- -------
Investing activities
Purchase of shares in subsidiary (2016:
purchase of shares in joint venture) (262) (17)
Acquisition of trade and assets in Swift
Manufacturing Solutions (415) -
Cash acquired (12) -
Purchase of property, plant and equipment (157) (66)
Net cash used by investing activities (846) (83)
---------------------------------------------- ------- -------
Financing activities
Issue of ordinary shares 45 48
Proceeds from borrowings 2,000 600
Repayment of borrowings (1,374) (1,473)
Net cash generated from/(used by) financing
activities 671 (825)
---------------------------------------------- ------- -------
Net increase/(decrease) in cash and cash
equivalents 66 (833)
Cash and cash equivalents at the beginning
of the year 23 856
---------------------------------------------- ------- -------
Cash and cash equivalents at the end
of the year 89 23
---------------------------------------------- ------- -------
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 the financial statements for the year ended 30 April 2017, 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 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, borrowings from Lloyds Banking Group and other debt
providers, and borrowings from directors and connected parties.
The current economic conditions create uncertainty particularly
over:
a) the level of new schemes required by the Company's social housing clients;
b) the ability of the Company to progress its pipeline of extra
care schemes due to the LHA rent cap, as described in the
Chairman's statement and the Strategic report;
c) the level of new schemes required by the NHS and the level of
funding available for those schemes;
c) the contribution earned to cover the cost base; and
d) the availability of corporate finance within the sector.
The Group's ability to progress its significant pipeline of
extra care housing schemes has been stymied since 2015 due to the
LHA rent cap. As the Government has still not provided a final
resolution to the issue, during the post balance sheet period the
Group has developed relationships with specialist funders and
Registered Providers who are able to acquire extra care housing
schemes on a forward-funding basis, ahead of the finalisation of a
Government solution to the LHA rent cap. The Board expects these
relationships to enable a number of the Group's extra care housing
schemes to progress to contract in the second half of the year to
30 April 2018. In the first half of the year, the Group has
continued to generate cash both from schemes on site and from
increased net debt. The unlocking of the extra care housing
pipeline will enable the business to commence the delivery of these
schemes and to further in new opportunities for the Group.
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. Where possible the Group seeks to minimise its risk in this
respect by agreeing progress payments during the design process 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
constraints of available finance on a project by project basis.
The Group has a proven record of managing its working capital
carefully in order to ensure the Group continues to have adequate
resources to both bring the schemes in its pipeline to contract and
then delivery, and to generate new pipeline schemes. 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 attributable to ordinary shareholders divided by the
weighted average number of shares in issue during the year.
2017 2016
---------------------------------------- ----------------------------------------
Weighted Weighted
Adjusted average Per share Adjusted average Per share
PBT* Profit number amount PBT* Profit number amount
GBP000 GBP000 of shares pence GBP000 GBP000 of shares pence
------------------ -------- ------- ---------- --------- -------- ------- ---------- ---------
Basic and diluted
profit per
share 67 59,102,203 0.11p 247 58,355,706 0.42p
------------------ -------- ------- ---------- --------- -------- ------- ---------- ---------
Profit per
share based
on adjusted
PBT* 53 59,102,203 0.09p 1,160 58,355,706 1.99p
------------------ -------- ------- ---------- --------- -------- ------- ---------- ---------
* Adjusted PBT = Profit before taxation, depreciation,
impairment and other operating income.
No dividend was paid in the year ended 30 April 2017 (2016:
GBPnil).
3 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 2017 or
2016, but is derived from those accounts. Statutory accounts for
2016 have been delivered to the Registrar of Companies and those
for 2017 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 29 September 2017.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR BDBDGXDGBGRB
(END) Dow Jones Newswires
October 02, 2017 02:00 ET (06:00 GMT)
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