Ashley House Share Discussion Threads

[yump] 21/8/2019 14:44

microscope

Not having a go at the header - just an aside quip really.

Info. in there is really useful - anyone can track back and see the history and I don't think it was unjustified at all.

I was equally enthusiastic !
Hopefully the title will apply in a year's time.

[dave4545] 21/8/2019 12:54

Looking for signs of life online but nothing doing.

150k at 4.49p earlier but despite some buys it's now 150k at 4.47p so a bit of a overhang to clear.

[microscope] 21/8/2019 12:17

Fingers crossed for you Dibbs. They don't do placings but have used loans from 'friendly' sources instead. The recent resignation was to do with 'good practice' in that area. Those with longer memories will remember Mrs Moy's loans, of course with the sad passing of her husband I guess that situation is not so comfortable.

The issue for me is that although very obviously the cheaper you buy the shares for the more you get, the risk of default remains the same until these contracts are signed. As others have said I would have expected MS to step in if they were really about to succumb.

I agree that if they make it through the next few months unscathed though that market cap this low cannot possibly last. The market is pricing it to go bust, and if/when that threat is withdrawn the share price should recover strongly. It's just whether to take the risk of losing 100% for potentially excellent returns next year. i'm sure we're all thinking similarly!

Yump in fairness the thread was written just after the government withdrew the Cap threat and the pipeline was 'released'. These were exciting developments and then of course came the MS sign-up which gave further strength to the argument.

I don't think it's atall fair therefore to have a pop at the thread header that was written on the back of the government change, years ago now. Hindsight is a wonderful thing, but I would argue the thread was fully justified at the time and the market seemed to agree!

[dibs61] 21/8/2019 09:01

Back in this.morning. A bit of a punt but valued at just £2.75m now which seems a bit undervalued to me given the pipeline.

My main concern on the short term funding has been allayed. I’ve researched and ASH have no history of placings, at least over the past few years. I am guessing that rather than take (permanent) dilution they will extract short term lending in form of a loan or overdraft from the bank.

Technically this is rock bottom with RSI of just 8!

I expect a bounce once the funding uncertainty is lifted and the schemes close.

[dave4545] 20/8/2019 22:06

Is there a bottom here or can it actually keep falling.

Looks like somebody with a bit of size gave up today to take it to new lows

[yump] 20/8/2019 21:54

Or perhaps the share price got too optimistic, given that they hadn't actually posted any profits when it was 10p+ !

[yump] 20/8/2019 16:20

Oh I missed that.

'Exciting developments' some way off then. It looks as if both ASH and MS misjudged the market in terms of the delays. Perhaps after such a long time with so many obstacles in the way the relief of having a major one removed got them too optimistic.

Hopefully the buses will arrive in sufficient volume to change the business properly at some point in the next year or so.

[cockerhoop] 20/8/2019 14:28

Yump,Regards F1M, That's not current, management subsequently reined back on profitability for the division. I expect it to be loss making for the last year after some project slippage. No major projects secured for the current year AFAIA.

[yump] 20/8/2019 12:24

Re: F1 Modular and its costs - from finals last year:

"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."

Its the main scheme delays that are the current burden and problem with cashflow.

[brad44] 18/8/2019 22:21

Nobody here? Jofra rules!!

[yump] 16/8/2019 17:15

Thanks that's a very interesting article.

There are mentions of various potential delays. I'd like to know what ASH's are.

[norbert colon] 15/8/2019 15:12

Interesting reading on the extra care sector in the UK:https://www.housingtoday.co.uk/in-focus/your-essential-guide-to-extra-care-housing/5100814.article

[norbert colon] 14/8/2019 12:56

In response to Persuader100's post:

I agree that the likes of Places for People are more progressive than other organisations and that's why ASH like working with them. Both Romsey (Hants) and the 2 x Leicester schemes are with Places for People yet these projects are still delayed in closing showing that despite the efforts of some parties, others such as the Council (in these cases Hants / Leicester) and/or the funder or lawyers hold the process up.

Like you have stated, I was hoping this would be unlocked by Morgan Sindell applying some muscle and/or using their network to help grease the wheels. Given recent newsflow, clearly there has not been any evidence of this.

The last 'legacy' ASH scheme was Scarborough and that's pretty much wrapped up now. All the schemes noted in recent RNS are Morgan Ashley schemes i'm afraid.

I agree there is demand for Extra Care schemes across the UK and ASH have decent pipeline and a good end market. The challenge is getting them closed in sufficient quantum to cover costs. F1 Modular is a big cost centre that the ASH business has only recently had to manage.

My concern is that I can't see any catalyst for schemes getting closed more quickly and unless F1 secures an ongoing decent volume of projects (whether Extra Care or private sector) this is going to continually weight down on them.

Getting contracts signed on the hotel project in Yorkshire will be very good news for F1 during FY19/20 but even that's been delayed and its private sector!

Awaiting news on their cash position and funding so for now I remain firmly out.

[knowing] 13/8/2019 13:50

Well when the No94 arrives the price will act accordingly.

[microscope] 13/8/2019 13:28

Thanks for that persuader100. Yes I'm sure some people will see your view as on the cynical side re-lawyers etc, but it does pay to come from that angle sometimes! Your first post in 15 years I see, so obviously you felt strongly!!

I too think that if they can navigate this awkward period then the outlook will become extremely positive, but there could be argued, I think, a case to say that until they do it's a binary bet.

Were they not to make it through, then I guess it's possible to lose the lot. More realistically, i still think MS would be the white knight in those circumstances, but acknowledge for now they need to fill the 'funding gap' from somewhere, as the lawyers' bills won't magically disappear.

[yump] 13/8/2019 12:03

Yes, thanks for that. Very interesting to hear an informed point of view. I've got used to pipeline 'issues' with various investments and I suppose the only thing to do is to work out whether the delayed projects are at some point going to overlap and provide a stable or increasing profit. Delays are a pain, but if there's an increasing pipeline and the projects are actually going ahead, then as long as they don't actually take longer to progress once closed (so payments are more spread out), then at some point the overlap of projects will work out quite nicely.

ie. the lead time to closing becomes irrelevant once enough projects are on the go and they are rolling over

[dave4545] 13/8/2019 10:51

Excellent post persuader100

[persuader100] 13/8/2019 10:10

I have been watching this thread with interest. I used to work in Private Finance Initiative ( PFI ) sector on private sector bids for the NHS / Primary Care Trusts as they were then, Department for Education, Local Authorities. Most of these clients were completely opposed to the concept of PFI and they were obstructive to say the least. Their lawyers were all on uncapped fees which meant that they would just go on and on and on dragging out the process. Some schemes took 3 years to close. Ashley House's clients are organisations like One Housing Group, Places for People etc and certain acute residential care providers. These organisation are different in that they do actually want to deliver schemes. The delays are financial / legals may lie directly with these client organisations or possibly with the Local Authorities who frequently take out significant allocations within these Extra Care schemes for their own housing obligations. One critical aspect of these projects is getting clients on the hook early, that it become difficult to wiggle about and delay further down the line after ASH have already spent lots of money and resource on land purchases and design and developments cost etc. I suspect that the partnership with Morgan Ashley will tighten up that crucial area significantly. I also suspect that the 3 projects in question are likely pre-Morgan Ashley and are legacy projects from ASH. hence the issues. There are no doubt a significant amount of projects in the Financial Close pipeline coming through that are Morgan Ashley projects. It a bit like the 94 Bus. You have a delay and then, all bunched up, they arrive at the same time as Mogan Ashley projects catch up with the old ASH projects. if ASH can get through this difficult period, your patience could be handsomely rewarded. I'm sitting tight

[yump] 10/8/2019 15:10

It is somewhat mind-boggling and possibly a scandal that in an area where there is pent up demand and a need to make sure many folk have a decent quality of life ASAP, that delays are still rife.

I can only think that it is an area where nobody really wants to take responsibility or risk, including national and local government who should be enabling these projects as much as possible. Unfortunately there has always been a big gap between what any government says it supports and what it actually does support.

[microscope] 10/8/2019 14:55

In fairness Norbert, anyone that followed us in from years ago saw the price rise to about 16p (about 8p when I started the thread) and had ample time to get out at a healthy profit.

From the Morgan Sindall half year report this week (to June 30th):

'...Progress with reaching financial close on a number of schemes in Morgan Ashley, its extra care joint venture with Ashley House plc, however, was slower than expected and slipped into the second half of the year and beyond.'

A tad worrying as the report was to June 30th that they said '...and beyond' so looks like some schemes may not close this calendar year.

Can only hope that doesn't involve any of the three which Ashley House expect to close within a month or two.

PS: Well spotted knowing, 'schoolboy howler' there! ;)

[knowing] 09/8/2019 12:15

So you haven't made any money on KIE then LOL

[buywell2] 09/8/2019 08:53

The moral here as it has been on many other threads

AVOID the construction sector.

[yump] 02/8/2019 18:42

What bothers me is that they would be much bigger beneficiaries without ms unless it was the case that £60mln of ongoing schemes was simply too much for ash to handle or worse, they had to get £x mln from somewhere just to stay afloat and ms was the best source.

Hopefully it will just be the case that the jv reduces the working capital load on ash and they will be proved right and the projects will add up to become unmanageable without the jv.

If I recall though, we were told that the jv wa going to enable better more efficient pipeline conversion

[dave4545] 02/8/2019 10:56

It's not exactly a good market either to issue this news. Price is friendless now and somebody has dropped 200k at 5.25p

This time last year it was getting chased to over 16p

I'm sure there is a low going to be touched soon then a bounce but sentiment is so low nobody atm is buying the big dip

[yump] 02/8/2019 09:37

If this is going to be the rate of progress it begs the question of whether ash needed to go into a Jv with ms at all in order to manage the projects.