Ashley House Share Discussion Threads

[microscope] 15/10/2018 14:43

Thanks for that Norbert.

Hi Dibbs, Absolutely agree with you, oversold, but patience will i hope will be a virtue!It is a short term downtrend but the longer term uptrend appears to still be intact, though wouldn't be too key for me either way.

I am a bit concerned about the wider markets, but this would be one I am happy to hold on to regardless.

[norbert colon] 15/10/2018 14:01

Promising news of up to 300 extra beds in Lincs:http://www.ashleyhouseplc.com/davenport_drive_public_engagement/

[dibs61] 12/10/2018 18:00

Hi microscope, ASH is now totally bombed out, RSI of 13. Totally oversold IMO and I will be adding when I get some more cash. Only caveat is it is in a downtrend on the chart BUT like you I am a long term holder so doesn't matter that much. I just want to get the best price thats all! Agree with you this is a quiet period for them and a good opportunity.

I also have a decent holding in OMIP. Thats very quiet now too. Waiting for those music rights/IP deals which would help perk it up again.

[microscope] 10/10/2018 12:55

I think just a few boredom sellers in an increasingly shaky looking wider market. We could do with some news, sure that would perk things up again, but noticed that in many previous years (not last year for obvious reasons) this has been a quiet time for news for the company. I suppose it's possible there's a seller in the ether but I'm not too bothered as a long term holder. I expect revenues will be weighted to the second half as is often the case here.

Fairly fully invested at the moment but if I do sell a couple of others for any reason, this is my top pick, (along with OMIP incidentally - as I know a few posters here have followed it previously, a very brief heads-up - who have undergone a remarkable transformation in the last couple of months, but because the bookbuild, which more than doubled their size, in terms of finances, overnight, was at a lower price than the shareprice, it has gravitated to what I think is a bargain).

[dibs61] 10/10/2018 10:45

Down 3.77% today 12.75p. Is it just me or is this one of those absurd market anomalies in terms of undervaluation??

[junior21] 13/9/2018 08:54

I did notice that you had a recent site visit (twitter) which I'm hoping was beneficial.

Like many I appreciate your insightful posts here and look forward to seeing what progress can be made both with the JV and on the modular front over the next couple of years.

[norbert colon] 13/9/2018 08:29

Have already taken enough of mgts time this year so I was happy to let them have an uninterrupted AGM! No scheduled news now until the Interims in Jan 2019 but I'm hoping we'll here news of the modular hotel project before then as detailed planning permission is due shortly afterwhich ASH hopefully will be formally awarded the contract. Must be worth low / mid single digit £m for 148 modular hotel rooms.

[junior21] 13/9/2018 08:15

Thanks NC. If anyone was going to attend I thought it would be you!

[norbert colon] 13/9/2018 07:48

Junior. Not that I am aware of.

[junior21] 12/9/2018 20:46

Would be interesting to hear if anyone attended the AGM today?

[yump] 05/9/2018 13:00

Anyone seen any articles / tips ? - would have thought if there were going to be any, now might be enough time since finals...

I'd guess that none of the pundits will stick their neck out and say that a p/e of 5 ish, for a business forecast to deliver 3p+ this year, is a bit bonkers. Exactly which revenues post which numbers is a bit more tricky to work out, given that there must be some more JV schemes that are going to close. On the other hand its difficult to know what the cost of sales is going to be for the modular business and for the JV.

I presume interest payments will drop. If they've finished with the impairments and reversals of them, that will simplify the accounts. The business is refreshingly free of exceptionals, except for the odd bit of restructuring, which is more than I can say for a couple that I've partly sold out of recently.

( o/t Its a pain having to decide whether a constant flow of exceptionals or amortisation of intangibles, (often because of acquisitions) is hiding performance, or whether if its a constant flow, then it may as well be an ongoing cost or or overhead. I never quite trust the treatment as potentially, they could be overstated, subduing profits, only to have a year when they suddenly drop, leading to a bumper profit, bumper bonuses and a lot of pi's caught out because they thought the profits would never appear. In at least 2 cases where I have found out some information, the likely jump in profits was known quite a long way in advance of it being 'public', but what can you do, other than engage someone from Suits)

[yump] 01/9/2018 12:50

Nobody could sell significant volume here yet, even Mrs. Moy, unless it was taken by funds.

I'm not a great fan of guesswork either, but it depends whether it leaves you with a gap to where you'd like to be, or plenty of leeway. I think the latter and the brokers wouldn't be quoting 3+p earnings without having some detail from ASH. I'm not a great fan of brokers' forecasts either, but when there is such a low rating based on those forecasts, it seems a reasonable bet, especially if your own calcs. look half credible.

Difficult to know when to buy or top up, it moves suddenly without warning. I've got enough for the time being. Interims should give a few clues and hopefully there's plenty of time while its not in the headlights.

If it starts growing reliably in the care market I'm sure it will have its day.

[greedfear] 30/8/2018 16:17

I'm out. Don't like all the guess work. Besides that I believe there is a risk that mrs. Moy will sell and it's an illiquid share. So I'm going to watch from the sideline. BOL holders.

[yump] 30/8/2018 11:09

This is a very simplistic view of the financials, but it will do for me to get an idea of the basic business operating profit: (I'll pass on all the impairment/reversals etc)...

Brokers have put in £19mln revenue for this year.
There's £18mln in the JV for the Ryde scheme, but not quite clear yet whether the 491K in the accounts is all from that or not. There was 185K from joint ventures last year and a couple of other years, which of course was before the Morgan Sindall JV existed.

So I'd guess there's more profit to come from Ryde. In the accounts, it appears that full revenue is not fully booked on financial close and there is mention of stage and balloon payments later.

If revenue in the JV has similar levels of cost as in the past, then could just treat half of it as if it was in ASH.

Taking cost of sales has been around 77%, although it jumps about a bit...
Assuming admin. expenses are around £3.5mln (been this level for a few years now)...
Assuming £19mln of revenue from ASH
£20mln of revenue from JV (which I think is being very conservative - almost assuming no scheme announcements !)

That's like ASH having £30mln of revenue:

Revenue: £30mln
Cost of sales: £23.1mln
Admin expenses: £3.5mln
Operating profit: £3.4mln

That's about as far as I've got, but its a big jump in operating profit.
Add in a couple of JV schemes starting this year and it doesn't seem a big ask at all to get some significant growth.

[jpuff] 24/8/2018 10:43

Ive just added too.

[ileeman] 24/8/2018 10:40

Added on the pullback, seems a great price post results.

[yump] 23/8/2018 09:57

Isn't the easiest way to look at this, by just assuming the net profit from the JV might be similar to that from ASH revenue, however it arrives at ASH and however management charges or seconding are costed.

So if the total Housing and Health schemes for this year reach say £40mln (£10mln pure ASH + £40mln JV), then that's the same as £30mln pure ASH and happy days ?

Plus modular, which they say will be profitable this year - but safer to assume that's quite small I think. I'm assuming they mean profitable, taking employee costs etc. into account. So the Health & Housing can be viewed as having similar overheads/costs as in the past, when revenues were higher.

JV scheme announcements are going to give a big clue and if the pipeline starts to move, the JV is a much better situation than ASH suddenly having to find resources for a much higher level of activity - which is why they set up the JV.

If I have time I'll look back and see how ASH's costs have varied when their revenue has changed. That's probably as good as we can get to see where total revenue needs to be. (ASH+JV).

[toadhall1] 23/8/2018 09:46

Looking back at the F1M acquisition I note that once it becomes profitable Ashley will pay £240k of contingent consideration, but only once F1M has repaid a £210k loan.

[toadhall1] 23/8/2018 09:44

Not any more. It was announced in the last RNS that the minority shareholders no longer have that option.

[toadhall1] 23/8/2018 09:43

I like the potential of F1M but its performance needs to improve in 2019. For the JV, we need to see the improved regulatory certainty lead to a much increased throughput of deals on site to make up for the 50% share of profits.

[podgyted] 23/8/2018 09:39

Isn't there something in the acquisition agreement of Modular that if profits rebound the original owners are given a stake back?

[toadhall1] 23/8/2018 09:23

Good points being made. Especially about revenues being lumpy by nature of business, even more so this year vs last vs coming year due to regulatory rules, F1 Modular, JV fee. Another point making extrapolation of profits tricky is that staff from Ashley have been seconded to the JV which means while Ashley pays their wages etc, this will be offset by management recharges from the JV. Meaning JV profits do not represent 50% of gross profits but more like 50% of net profit , ignoring tax etc. So in theory we should see admin costs in Ashley's PBT reduce in 2019. Of course, admin expenses have increased yoy mainly because of the acquisition by F1 Modular of its former modular construction partner in March 2017, hence average staff numbers increased from 42 in 2017 to 85.

[topvest] 22/8/2018 20:24

I suppose the flip side that I had missed is that Modular could be about £10m, so will replace the "lost revenue" to the JV. Not sure on the gross margin and profitability of that element though as it was loss making last year. I think that makes the target revenue easier to achieve, but not sure about gross margins. You can't extrapolate gross margin from FY18 as FY19 is very different and didn't get a £4m windfall. I would suggest that gross margin will be much lower, but supplemented by the JV profit line which could be a £1m or so ballpark numbers.

[microscope] 22/8/2018 20:12

The business will always be subject to timing issues re-closure of schemes, on annual numbers. Always has been, always will be.The numbers are merely a snapshot on a particular date. If a scheme closes the day after year end, in the grand scheme of running the business, it actually matters not a jot. Simply means the following 12 months are off to a flier. All imho.