Ashley House Share Discussion Threads

[yump] 22/8/2018 18:55

Well the brokers have got £19mln for ASH from somewhere for this year and it can't be from the JV, so must be a combination of existing 'pure' ASH schemes that have not fully been recognised, plus revenue from Modular which is 100% ASH.

I can't imagine that ASH have let the broker's put that in if its way out.

Like any company based on contracts, of course its not in the bag, but can only go on what appears to be the case and I think an equivalent of £30mln (old ASH style) is easily reachable. ie. £19mln ASH + half profits from £20mln in the JV.

Of course I expect the JV to be announcing some significant schemes.

The modular development value left from schemes already underway is £8.6mln according the accounts. So maybe not a big ask to get to £19mln in total.

I think the potential reward in one year far outweighs the risk. Just suppose one JV scheme for £20mln gets underway. Add that to part of the £18mln Ryde scheme and there could easily be £40mln-50mln in the JV. If the profit from that is anywhere near the profit from the 'old' ASH revenue...

Of course the key thing is what sort of profit drops out of the JV, but I think there is a clue in the £4mln that MS paid for the 50/50 stake in the pipeline.

[topvest] 22/8/2018 18:24

Hmmm...they only did £14.5m revenue in the last year when you back out the £4m sale of the subsidiary. A chunk of that revenue was on the business that they sold, so will be in the JV line and will not be included in revenue from now on. On reflection, whilst the finances have definitely improved, it’s very difficult to comment on what’s going on in terms of current trade and it’s obvious that it’s not in the bag, so to speak, so there is continued execution and delay risk. Meeting last year’s revenue numbers when you are starting at about -£10m like for like is demanding.

[ileeman] 22/8/2018 10:27

Backtesting, 14.4p to buy.

[yump] 21/8/2018 15:52

imo it might take a while for any new investors to digest what has happened here, forecasts, outlook etc. Its not exactly a hyped up tech. However, for anyone holding after buying last year and knowing what has been happening, this level looks quite good for adding.

[ileeman] 21/8/2018 11:35

This is how I see it from a TA point of view.

Breakout, backtest of previous resistance. 20p-25p target.


free stock charts from uk.advfn.com

[yump] 21/8/2018 11:11

Someone mentioned the possibility that some of the Moy holding might get sold. I imagine that now it wouldn't be difficult to move some of that onto institutions/funds, given the improved prospects - which look like they run well into the future, with the market growing - some catching up to do in just building enough.

There's been such a long period in the doldrums that presumably a lot of shares are now tightly held, so maybe impossible to build any significant stake for a fund, unless larger shareholders are prepared to part with some.

[rp19] 20/8/2018 12:46

WHI 2019 forecasts are Rev £19.4m; PBT £2.0m; EPS 3.3p.

[yump] 20/8/2018 12:05

I think forecasts are unchanged, although I don't have direct access to WHI. That means just over 3p as far as I can see on various sites.

Presumably the almost 550k interest payment will reduce this year. That's quite a big proportion of profits when they are 1.7mln.

I assume the lowly rating is still factoring in the government related risk, although that has now passed to a large extent. Which leaves the timing risk of not knowing exactly when each scheme will close.

[ileeman] 20/8/2018 11:57

Looks like it wants to backtest the 15p area before heading towards 20p.

[microscope] 20/8/2018 11:47

Yes while I'm happy to leave the niceties of accounting to others, perhaps these two comments from results throw some more light on them.

' 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 '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.'

What I do know is the results are great imho, and if anyone can share a summary of the new WHI Ireland note re prospects that would be appreciated.

[topvest] 19/8/2018 17:44

My guess is that the one-offs are the £4m consideration for the sale of the joint venture, plus the £0.5m impairment reversal less any costs associated with the transaction. Should be separately disclosed, but only the reversal of the impairment is. I suspect the auditors will get them to disclose properly in the Annual Report.

[yump] 19/8/2018 17:22

It would be very useful to know what proportion of the Ryde development value has generated the 491K of the joint venture profit, although I think that might be pushing it a bit in terms of disclosure - competitors etc.

Be easy to guess at the gearing of dev. value to JV profit then, although I guess the terms for initial and following payments on closure of schemes will vary.

They say modular will contribute to profits this year, so that will be interesting.

I'd just like to be able to work out how cheap it is, as imo it doesn't look a big ask to get to a similar profit figure this year, given the 2 schemes outside the JV. So is it just cheap or cheap as chips...?

[toadhall1] 19/8/2018 16:55

On second thoughts to my earlier post, it's possible the 4MM has been held by the JV off balance sheet. So MS contributes the cash and AH contributed the future pipeline into the JV. I'll drop them an email to clarify.

[toadhall1] 19/8/2018 15:51

Yump, yes would be nice to know the break out of the revenue earned by modular vs health/housing pipeline. I should think we will get that segmental level reporting in the next period but would be nice to know what that looks like for the past year. I see Modular as being a growth business which they acquired for very little. But on my reckoning it lost about £1.2MM in the year based on earnings due to non-controlling interests.

[toadhall1] 19/8/2018 14:11

Really surprised of the point made by topvest, but does look like it is true, so good spot. Does look like the 4MM is included in revenue with no mention of this exceptional item as revenue. There is it mention in the cash flow statement hence the number must be included in operating profits. No subsidiary was sold just access to a future pipeline. I know when other companies make licensing agreements these are accounted for as revenue. This is similar, but no mention of the treatment is so surprising. Will do some more digging. Also a down side of the JV when interpreting the financials is the reduced view of revenue and gross profit. If we approach the company maybe they will seek to provide some management reporting financials for shareholders consistent with their position as a socially responsible developer.

[yump] 19/8/2018 10:15

No, not got access to that, I've cut down on all the notes appearing in my inbox. Any summary would be helpful thanks.

[norbert colon] 18/8/2018 22:41

Yump - assume you have seen the latest WHI note out this week?

[yump] 18/8/2018 22:11

May be just have to wait for some forecasts now. Might try a few estimates on an A4, based on guesses about profit from joint venture + recent financial closure on Scarborough and Peterborough. Not an easy task, as obviously the full revenue doesn't just appear on financial close, so those 2 will contribute to this year + F1 revenue.

4 schemes add up to £36mln, Scarborough is 10, Ryde is 18 - that leaves 8 from others, plus whatever else closes this year.

[riddlerone] 18/8/2018 18:04

Balance sheet tells you everything you need to know

[topvest] 18/8/2018 17:46

Yes, I did probably sell too early. I’m a cautious sort of guy and got fed up with the endless delays. I’ve said congratulations to those that held. Hope this does turn the corner as management have done very well to keep the wheels on without massive dilution.
Just think the results disclosure is misleading and not technically correct. There is no indication of underlying profitability as the results are highly impacted by a material transaction that isn’t disclosed properly, but mixed up with continuing operations. Anyone else got a technical view?

[microscope] 17/8/2018 22:01

If you're questioning their accounting topvest, strongly suggest you contact the company, or their accountants. Shame you may have sold too early?
PS: I'd say that there's a pretty clear clue in the debt reduction figures as to where a large chunk of the cash from MS went!

[topvest] 17/8/2018 21:19

Its the disposal of a subsidiary undertaking and should be separately disclosed as far as I'm concerned. The most important number in the announcement should be what the profit on disposal was, but its not disclosed. The business is no longer fully consolidated, but now accounted for as an investment in a joint venture with JV profits brought in as one line. The JV profits are disclosed, but not the disposal. Odd and a tad misleading, albeit the audited accounts are not yet available! Only had a fairly quick look so apologies if I have missed something, but its not telling me what I'd want to know!

[yump] 17/8/2018 21:12

Not sure what it constitutes, although I've assumed its just produced unexpected profits, with the current year actually being the year decent earnings were forecast. Its not entirely a disposal really. Perhaps its like receiving payment for a 50% share of patent rights, although not sure how that would be treated in accounts. Is that an asset sale ?