TIDMASH
RNS Number : 9524X
Ashley House PLC
16 August 2018
Ashley House plc ("Ashley House", the "Company or "Group"), the
health and community care
property partner and modular contractor
Preliminary results
Ashley House plc today announces its preliminary results for the
year ended 30 April 2018.
Financial highlights:
Ø Significant increase in profits following strategic
developments
o Revenues of GBP18,474,000 (2017: GBP18,565,000)
o Gross profit increased by 31% to GBP4,740,000 (2017:
GBP3,631,000)
o Profit before tax increased to GBP1,752,000 (2017:
GBP67,000)
Ø Improving cash performance
o Cash generated from operations of GBP1,510,000 (2017:
GBP996,000)
o Net debt reduced to GBP1,492,000 (2017: GBP2,547,000)
o Individual related party debt repaid; Invescare loan
reduced
Operating highlights:
Ø Key joint venture signed with Morgan Sindall Investments
o 50:50 venture to deliver extra care housing, care homes and
supported living housing
o Both partners bring significant skills, experience and
existing partnerships to the venture
o First scheme at Ryde, Isle of Wight, already on site
Ø Establishment and growth of in-house modular construction
capability
o Establishment and acceleration of modular capability in the
year
o Supply chain benefits as well as access to an extended range
of sectors
o 40 bed extra care scheme contracted along with a strong
pipeline of schemes across housing, leisure, education and
retail
Ø Pipeline numbers reflect the two business segments, housing
& health and modular
o Housing & health shows 22 schemes with a development value
of GBP206.4m
o Modular pipeline which contains 11 developments with a total
value of GBP18.5m
Enquires:
Ashley House plc 01628 600 340
Antony Walters, Chief Executive
James Hathaway, Finance Director
WH Ireland Ltd 0207 220 1666
(Nominated Adviser and broker to Ashley House plc)
Adrian Hadden
James Sinclair-Ford
Statement of directors' responsibilities
The responsibility statement below has been prepared in
connection with the Group's Annual Report and Financial Statements
for the year to 30 April 2018. 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 15 August 2018 and signed on its behalf by:
Antony Walters
Chief Executive
Chairman's statement
I am pleased to report in my statement this year on two key
strategic events orchestrated by the Group that are making
significant positive change to the business, together with a
reversal by the UK Government on a restriction to housing benefit
that had effectively stalled development in this area and would
have been detrimental to the long term prospects of the whole
sector. Whilst trading during the twelve months under review as
measured by scheme closures has been difficult due to the threat of
Government intervention mentioned above, the Group was able to
close four major schemes in the latter part of the year which
together with the joint venture agreement with Morgan Sindall
Investments, as detailed below, has enabled the Group to provide a
much improved performance for the year to 30 April 2018.
Results
Revenue for the year was in line with the previous period at
GBP18,474,000 (2017: GBP18,565,000) but a more positive sales mix
as well as other contributory factors such as the reversal of an
impairment as detailed in the Strategic report, led to a
significant increase in operating profit resulting in a rise in
profit before tax to GBP1,752,000 (2017: GBP67,000). Following the
completion of the joint venture transaction which created Morgan
Ashley, net debt has been reduced to GBP1,492,000 from GBP3,621,000
as at 31 October 2017 and GBP2,547,000 as at 30 April 2017.
Local Housing Allowance Cap
On 25(th) October 2017 during Prime Minister's Questions,
Theresa May announced that the Local Housing Allowance (LHA) Cap,
that had threatened to restrict the amount of housing benefit
available for schemes such as those developed by the Group, would
not after all be imposed. The Group was subsequently able to take
three extra care schemes to financial close and on to site. On
9(th) August the Government confirmed that it will not change the
current funding model but will instead introduce an oversight
regime to ensure better quality and value for money. This outcome
is very positive for Ashley House, Morgan Ashley and for the sector
as a whole. This key event for the Group has enabled the unblocking
of its pipeline of extra care developments. With the threat to
rental streams significantly diminished, the improved investability
of those schemes has stimulated demand and we have seen an
increasing number of Real Estate Investment Trusts (REITs) as well
as Housing Association clients themselves keen to acquire this type
of property.
This threat of the LHA Cap had been a catalyst for the
diversification strategy recently undertaken by the Group and which
continues today. The following two key strategic events of the last
fifteen months have begun the transformation of the business and
established a broader platform to enable its growth.
Morgan Ashley
In December 2017 a 50:50 joint venture was established with
Morgan Sindall Investments Limited (MSIL) to deliver extra care
housing, care homes and supported living housing for some of the
most vulnerable in society. The strengths which the two businesses
bring to the new entity (Morgan Ashley Care Developments LLP,
trading as Morgan Ashley) are compelling.
Ashley House brings its experience, reputation and expertise in
this sector, its strong relationships with Local Authorities, Homes
England, Registered Providers (Housing Associations) and Care
Providers as well as a pipeline of schemes with gross development
value in excess of GBP200m.
MSIL is part of Morgan Sindall Group plc, the construction and
regeneration group, and thus brings complementary qualities and
skills in supported living, long term strategic property
partnerships with Local Authorities and the NHS, and a broad range
of expertise and experience in investing and managing institutional
capital. MSIL also brings its financial strength and the
capabilities of national construction and house building through
its group companies.
The relationship between the two parties has developed well
during its short existence and Morgan Ashley is already extending
MSIL's offer to Local Authority partners which is further extending
its pipeline. With the first scheme already on site the future
prospects are healthy.
Modular construction
This time last year we reported a significant corporate
development having taken place being the Group's increased
involvement in F1 Modular Limited (F1M) and the acquisition by F1M
in March 2017 of the assets of an experienced offsite manufacturer.
F1M is now a 76% owned subsidiary of Ashley House plc with the
remaining shares held by F1M management. We have recently signed an
agreement with the minority shareholders that fixes their
investment at 24% with their buyback agreements, that may have
further extended this percentage, having now been waived.
F1 Modular is a specialist developer of high quality, energy
efficient modular buildings, used for a wide range of products
which are created in its 70,000 square feet factory in Newtown,
Powys. These products range from the single module cabins utilised
by a number of major retailers, school classrooms for the Education
and Skills Funding Agency (ESFA), housing projects for Councils,
extra care apartments for Housing Associations and, in the
pipeline, plans for a hotel for a private leisure company. Whilst
F1M was lossmaking in the year to 30 April 2018, recent orders have
secured its activity for the coming months and the Board fully
expects it to contribute to profits in the year to 30 April 2019
and beyond.
More detail on F1 Modular and Morgan Ashley is contained in the
Strategic report.
Board composition
Last week with great sadness, we advised that, following his
retirement from the Board at the end of June, John Moy passed away
following a battle with cancer. John had provided invaluable
support and advice to the Group over the past three and a half
years and will be greatly missed by everyone at Ashley House.
In March 2018 we were delighted to welcome James Hathaway to the
Board as finance director. Since the promotion of Antony Walters to
chief executive in 2014, James has played an increasing role within
the business and now joins Antony and Jonathan Holmes as an
executive director.
The skills, competencies and the balance of the Board is
regularly under review to ensure it serves Ashley House
appropriately.
Outlook
Ashley House is an experienced developer across the health and
social care sectors. There is no doubt that Government policy in
recent times has hampered development opportunities in these
sectors, however recent changes have enabled the Group to push
forward with its extra care and supported living pipeline, whilst
at the same time it has continued to diversify its product range,
in part through its modular capability, into new sectors including
education and retail.
The outlook for the Group has improved, starting with the
financial performance for the year and further enhanced by schemes
commencing on site, a significant reduction in the Group's net debt
position and a focus on building a broader pipeline of
opportunities which are not so contingent upon Government policy
and funding.
The Board looks forward to working with our new partners at
Morgan Ashley and F1 Modular to take advantage of the recent
strategic developments and changing landscape to grow the business
whilst making a real positive difference to people's lives in the
social development space and the new markets in which the Group's
capabilities are well suited.
Christopher Lyons
Chairman
15 August 2018
Strategic report
Ashley House plc is a social developer and modular contractor
with a core base in the health and community care markets. The
Group works largely with the public sector through commissioners
and providers in the health, social housing and community sectors.
The solutions provided by the Group improve the lives of an
increasingly wide selection of the population ranging from
specialised social housing for some of the most vulnerable in
society to improved health and education facilities for the wider
population.
Principal activity
The principal activity of the Group is the supply of design,
construction management, consultancy, and modular construction
primarily working with providers of housing, health and community
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 9. 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 2018
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.
The key developments in the year were the abandonment of the
implementation of the proposed Local Housing Allowance (LHA) Cap to
housing benefits and the joint venture established with Morgan
Sindall Investments. The modular business acquired by F1 Modular in
2017 has begun to stabilise with much increased activity, including
a 40 apartment extra care housing development currently being built
in the factory.
The Board is confident that the pipeline that has been built up
in recent years can now be unblocked following the change in
Government policy and that the Group's delivery capability has been
enhanced through the creation of Morgan Ashley. This along with the
growing modular business should enable profitability to grow in the
coming years as the pipeline starts to be delivered.
The profit for the year to 30 April 2018 includes the write back
of an impairment previously recorded against the carrying value of
a loan receivable from an associated company. The Group holds 33%
of Partnering Health Limited which provides out of hours and other
medical services. Whilst management had expected to recover the
full value of the loan in due course, the performance of that
company improved during the past year such that is was able to
advance significant repayments ahead of when it had been previously
expected. An amount of GBP512,000 was consequently written back to
debtors during the year.
Key Performance Indicators
The Key Performance Indicators (KPIs) for the Group are Profit
Before Taxation and the forward pipeline of the business. As shown
in the Highlights and Chairman's statement above, Profit Before
Taxation for the year to 30 April 2018 was GBP1,752,000 (2017:
GBP67,000). The Group's pipeline at the current date stands at
GBP206.4m for housing & health and GBP18.5m for modular.
Information pertaining to this is shown and discussed below.
The Group operated in two main sectors in the year, being
housing & health and modular:
Housing & health
The Board was delighted in December 2017 to agree a joint
venture with Morgan Sindall Investments Limited. This new
partnership, Morgan Ashley, is developing housing in the extra
care, care home and supported living sectors. In the months
preceding that agreement the Government finally agreed to relax the
imposition of a cap on housing benefit to Local Housing Allowance
rates. Morgan Ashley has a unique ability to offer its Local
Authorities and Registered Provider clients considerable and robust
resource and expertise to assist them in their response to the
massive challenges they are facing in delivering care and housing
to vulnerable and elderly people across the UK.
In the year to 30 April 2018 Morgan Ashley's first scheme, an
extra care facility at Ryde, Isle of Wight reached financial close
and commenced on site. The Ryde scheme comprises 75 extra care
apartments with communal areas providing much needed accommodation
for older local residents with care needs, together with 27
affordable bungalows. The scheme will be operated by Southern
Housing and owned and financed by Funding Affordable Homes. The
scheme is part funded by a grant from Homes England.
Ashley House has commenced on site with an extra care scheme in
Scarborough. This is a collaboration with one of the UK's largest
Housing Associations, Home Group, Scarborough Borough Council and
North Yorkshire County Council and will provide 63 apartments for
over 55s and those with extra care needs. The scheme will also see
a full range of on site communal facilities including a restaurant
and café. Contracts have also been signed with the care provider
HSN Care for a second care facility, this one located in
Peterborough. The scheme will provide specialist accommodation for
twelve disabled young adults with complex needs. The modular
component of the development is being built by F1 Modular. Both
Scarborough and Peterborough sit outside the Morgan Ashley joint
venture. Despite the continuing limitations on Government funding
in primary care, the Group is pleased to have recently completed
three health schemes. The first a diagnostic treatment centre near
Durham for City Hospitals Sunderland. The scheme allows patients to
be seen for diagnostics and treatment at this facility rather than
in an acute hospital environment, thus reducing cost and waiting
times. The second is a GP surgery development in Wivenhoe, Essex
and the third Wales' first fully integrated family centre and
primary care centre at Mayhill, Swansea. All three schemes were
funded by our partner, the healthcare real estate investment trust,
Assura plc.
Modular
The acquisition by F1 Modular of the assets of an experienced
offsite manufacturer was undertaken for two reasons. First it was
to provide an element of vertical integration in order that some of
the Ashley House pipeline can be delivered using such modern
methods of construction. The second was to further diversify and
lessen the reliance on Government funding structures for the
business. The Group's scheme at Peterborough mentioned above is an
example of the vertical integration in action. Modular works well
where there is uniformity that is to say where a number of the same
modules can be produced.
Our diversification strategy is already delivering schemes, such
as those under the ESFA schools framework. Education is well suited
to modular construction, as the reduced on site time means site
works can be restricted to the school holidays. Not only does this
significantly reduce disruption to children's education, but the
quality of F1M's product is vastly superior to the 'pre-fabricated'
classrooms that some of us remember from our childhoods in the
second half of the 20(th) century.
Pipeline
The business is now segmented into housing & health and
modular. Housing & health incorporates the Morgan Ashley
activity as well as the health schemes to be developed by Ashley
House. It also includes the Scarborough and Peterborough housing
schemes which are outside the Morgan Ashley venture, but similar
future schemes will be provided by Morgan Ashley.
Revenue earned by Morgan Ashley is not consolidated into Ashley
House group revenue. Instead, the Group's share (50%) of the net
profit of Morgan Ashley is included in Share of Income from Joint
Ventures and Associates in the Group's Consolidated Income
Statement. As such, the pipeline schedule should only provide the
reader with a sense of the scale and estimated development value of
the Group's pipeline and not as an indication of future Group
revenues.
No revenue is recognised on schemes until financial close unless
it would be recovered were a scheme to be cancelled, with all
expenditure (other than land) expensed immediately.
The table below seeks to provide an estimate of the gross
development value of the schemes, noting for the reasons stated
above in accounting for the joint venture, much of this will not
feed into the Group's revenue line. Our housing & health
(largely extra care) pipeline now stands at GBP206.4m across 22
schemes (2017: GBP212.0m from 28 schemes). Currently four schemes
are in the factory with a total development value of GBP8.6m. There
are a further seven identified schemes at advanced stages although
not formally appointed, with a total development value of
GBP9.9m.
Housing & health Modular
Number of Development Number of Development value
schemes value schemes
---------- ------------ ----------
On site / in factory 3 GBP22.7m 4 GBP8.6m
---------- ------------ ---------- ------------------
Appointed / advanced 19 GBP183.7m 7 GBP9.9m
---------- ------------ ---------- ------------------
TOTAL 22 GBP206.4m 11 GBP18.5m
---------- ------------ ---------- ------------------
To be an 'appointed' scheme on our housing & health
pipeline, where relevant the Group 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. Where the
Group is appointed the time frame to move to on site is likely to
be between 6 and 24 months. 'Development value' represents the
likely investment or sale value of the scheme less any scheme
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 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 to the executive directors daily. The Board discusses
liquidity and cash flow projections at monthly Board meetings and
otherwise as required.
Operating risk
The Group's business model is based upon the advancement of its
pipeline of schemes to financial close and then onto site. In the
majority of cases it is only when a scheme reaches financial close
that any income is received. Whilst bringing schemes to financial
close is a principal strength of the Group, the time taken to
progress schemes to financial close due to their complexity and the
need for a number of parties to agree extensive legal
documentation, presents operating risk. The Group seeks to mitigate
this risk through its diversification policy, taking a partnering
approach with key stakeholders and prioritising and advancing its
large pipeline as appropriate.
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 demonstrated by the effects of
the previously proposed LHA Cap outlined above. The Group employs
experienced professionals at Board and senior level as well as
seeking knowledge and advice from external advisers and partners 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
as demonstrated by the recent diversification policy including the
acquisition of F1 Modular and the Morgan Ashley joint venture.
Health and social care are key issues for the UK and property
solutions such as those Ashley House provides are much needed for
our ageing 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. As
the Morgan Ashley joint venture is a 50% partnership, the results
will not be consolidated and therefore the scheme value will not
show as revenue of the Group, but the Group's share of profits from
Morgan Ashley will be included as share of profits from joint
ventures and associates within the income statement. Revenue and
profit recognition for Morgan Ashley follow the normal Ashley House
accounting policies.
Cash management
The net debt position of the Group is much improved from
previous years. In the year, the Group generated GBP1,510,000 cash
from operations (2017: GBP996,000). The cash inflows have been
partly used to reduce net debt by GBP1,055,000 with the related
party loan repaid in full and the loan from Invescare reduced. The
loan at Scarborough is being amortised at GBP17,500 per month. Net
debt at the end of year and the previous year is shown below:
2018 2017
GBP000 GBP000
Cash in bank 250 89
Scarborough (338) (527)
Invescare loan (1,295) (1,500)
Related party
loan - (500)
Loan F1M (109) (109)
--------
Net debt (1,492) (2,547)
-------- --------
Social impact
Ashley House is proud to be a 'Social Developer'. Whilst
unashamedly a profit making public company, Ashley House also
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 Impact Investment Network (Social
Stock Exchange (SSX)) and maintains its listing on both AIM and the
SSX social impact segment of the NEX Exchange Growth Market. Ashley
House provides an annual social impact report, copies of which are
available at the registered office and on the website.
Summary
The lifting of the threat of the LHA Cap, the diversification
through F1 Modular and the joint venture with Morgan Sindall have
all significantly improved the prospects of the Group as it looks
to grow over the coming years. The improved profit performance,
reduction in debt and significant pipeline of schemes to be
developed provide a solid basis for future growth. The Board is
indebted to its shareholders, staff and other stakeholders for
their patience over the past few years. We believe that the
business is now well placed to benefit from the growing need for
health and social care property, whether built traditionally or in
modular form, and therefore look forward with increasing
confidence.
On behalf of the Board
Antony Walters Jonathan Holmes
Chief Executive Commercial Director
15 August 2018
Consolidated statement of comprehensive income
for the year ended 30 April 2018
2018 2017
Note GBP000 GBP000
------------------------------------------------------ ----- --------- ---------
Revenue 18,474 18,565
Cost of sales (13,734) (14,934)
------------------------------------------------------ ----- --------- ---------
Gross profit 4,740 3,631
------------------------------------------------------ ----- --------- ---------
Administrative expenses (3,411) (3,008)
Depreciation (101) (59)
Profit on disposal of property, plant & equipment 11 -
Reversal of impairment 512 73
Share of results of joint ventures 491 185
Operating expenses (2,498) (2,809)
------------------------------------------------------ ----- --------- ---------
Operating profit 2,242 822
Interest receivable - -
Interest payable (490) (755)
Profit before taxation 1,752 67
------------------------------------------------------ ----- --------- ---------
Tax charge - -
------------------------------------------------------ ----- --------- ---------
Profit after tax for the year attributable to equity
holders of the parent 1,752 67
Other comprehensive income - -
------------------------------------------------------ ----- --------- ---------
Total comprehensive income for the year 1,752 67
------------------------------------------------------ ----- --------- ---------
Attributable to:
Equity shareholders of the parent company 2,042 55
Non-controlling interests (290) 12
------------------------------------------------------ ----- --------- ---------
Basic and diluted profit per share 2 2.93p 0.11p
------------------------------------------------------ ----- --------- ---------
All of the activities of the Group are classed as
continuing.
Consolidated balance sheet
at 30 April 2018
2018 2017
GBP000 GBP000
--------------------------------- ------- -------
Non-current assets
Property, plant and equipment 139 226
Investments in joint ventures 1,930 1,137
Deferred tax asset 1,400 1,400
Goodwill 415 415
Other receivables - 387
3,884 3,565
--------------------------------- ------- -------
Current assets
Inventories and work in progress 1,877 2,953
Trade and other receivables 6,364 5,231
Cash and cash equivalents 250 89
---------------------------------- ------- -------
8,491 8,273
--------------------------------- ------- -------
Total assets 12,375 11,838
---------------------------------- ------- -------
Current liabilities
Trade and other payables (4,888) (5,296)
Bank borrowings and overdrafts (1,742) (2,300)
Provisions (48) (79)
---------------------------------- ------- -------
(6,678) (7,675)
--------------------------------- ------- -------
Net current assets 1,813 598
---------------------------------- ------- -------
Non-current liabilities
Bank borrowings and overdrafts - (336)
Finance lease payable (91) -
Long term provisions (108) (137)
---------------------------------- ------- -------
Total liabilities (6,877) (8,148)
---------------------------------- ------- -------
Net assets 5,498 3,690
---------------------------------- ------- -------
Equity
Share capital 598 594
Share premium 116 82
Share-based payment reserve 49 31
Special reserve 3,113 3,113
Non-controlling interest (294) (4)
Retained earnings 1,916 (126)
---------------------------------- ------- -------
Total equity 5,498 3,690
---------------------------------- ------- -------
Consolidated statement of changes in equity
for the year ended 30 April 2018
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 2017 594 82 31 3,113 (4) (126) 3,690
Total comprehensive income for
the year - - - - (290) 2,042 1,752
Transactions with owners
Issue of shares to Ashley House
Share Incentive Plan 4 34 - - - - 38
New share option scheme charge - - 18 - - - 18
At 30 April 2018 598 116 49 3,113 (294) 1,916 5,498
-------------------------------- -------- -------- ----------- -------- ------------ --------- -------
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
------------------------------------- -------- -------- ----------- -------- ------------ --------- -------
Consolidated statement of cash flows
for the year ended 30 April 2018
2018 2017
GBP000 GBP000
--------------------------------------------------------- ------- -------
Operating activities
Profit for the year before taxation 1,752 67
Adjustments for:
Share-based payment charge 18 21
Depreciation 101 59
Profit on disposal of property, plant & equipment (11) -
Reversal of impairment (512) (73)
Share of results of joint ventures (491) (185)
Dividends received from joint ventures 698 185
Interest received - -
Interest paid 490 755
Operating cash flows before movements in working capital 2,045 829
Decrease/(increase) in work in progress 1,076 (146)
(Increase)/decrease in trade and other receivables (1,234) 478
Decrease in trade and other payables (317) (154)
Decrease in provisions (60) (11)
Cash generated from operations 1,510 996
Interest paid (490) (755)
---------------------------------------------------------- ------- -------
Net cash generated from operating activities 1,020 241
---------------------------------------------------------- ------- -------
Investing activities
Proceeds from disposal of property, plant & equipment 142 -
Purchase of property, plant and equipment (145) (157)
Purchase of shares in subsidiary - (262)
Acquisition of trade and assets in Swift Manufacturing
Solutions - (415)
Cash acquired - (12)
Net cash used by investing activities (3) (846)
---------------------------------------------------------- ------- -------
Financing activities
Issue of ordinary shares 38 45
Proceeds from borrowings 200 2,000
Repayment of borrowings (1,094) (1,374)
Net cash (used by)/generated from financing activities (856) 671
---------------------------------------------------------- ------- -------
Net increase in cash and cash equivalents 161 66
Cash and cash equivalents at the beginning of the
year 89 23
---------------------------------------------------------- ------- -------
Cash and cash equivalents at the end of the year 250 89
---------------------------------------------------------- ------- -------
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 2018, being
based on the Group's financial statements which are prepared in
accordance with International Financial Reporting Standards as
adopted for use in the EU.
The Group's business activities, together with the factors
likely to affect its future development, performance and position
are set out in the Strategic report on pages 5 to 8, 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. In the recent past, the Company has utilised personal
loans from directors of the Company or their spouses, all of which
were repaid during the year to 30 April 2018. These facilities are
set out in Note 15 to the financial statements.
The current economic conditions create uncertainty particularly
over:
-- the level of new schemes required by the Company's social
housing clients and the level of Government funding available for
those schemes;
-- the level of new schemes required by the NHS and the level of
Government funding available for those schemes;
-- the contribution earned to cover the cost base; and
-- the availability of corporate finance within the sector.
The Group's ability to progress the significant pipeline of
extra care housing schemes has been restricted since 2015 due to
the proposed introduction of the LHA Cap. As detailed in the
Chairman's statement and Strategic report, the Government has now
confirmed that it will not change the current funding model but
will instead introduce an oversight regime to ensure better quality
and value for money. This outcome is very positive for the Group as
it improves financial viability and thus attractiveness to
investors.
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
the initial payments received at financial close. Such payments are
normally significant, occurring at the end of the design process
when a scheme reaches contract, by which point the Group has
incurred and paid the majority of the professional fees associated
with the scheme. 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. Once a scheme starts on site, its cash flows become
more regularised, usually with a positive net monthly cash flow and
often a balloon payment receivable at or shortly after practical
completion.
The Group has consistently demonstrated its ability to
participate in projects within constraints of available finance on
a project by project basis, and has a proven record of managing its
borrowings carefully in order to ensure that it continues to have
the working capital 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.
2018 2017
------------------------------
Weighted Weighted
average Per share average Per share
Profit number amount Profit number amount
GBP000 of shares pence GBP000 of shares pence
------------------------- ------- ---------- --------- ------- ---------- ---------
Basic and diluted profit
per share 1,752 59,696,089 2.93p 67 59,102,203 0.11p
------------------------- ------- ---------- --------- ------- ---------- ---------
No dividend was paid in the year ended 30 April 2018 (2017:
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 2018 or
2017, but is derived from those accounts. Statutory accounts for
2017 have been delivered to the Registrar of Companies and those
for 2018 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 15 August 2018.
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
FR BELLFVVFLBBF
(END) Dow Jones Newswires
August 16, 2018 02:01 ET (06:01 GMT)
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