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Ashley House on recovery path as extra care needs soar

A joint development with Morgan Sindall Investments in December has taken it deeper into extra care and supported-living
Nurse
Extra care market is getting larger and larger

Government policy in areas such as healthcare and social housing has not made life easy for AIM and Nex-listed social developer Ashley House PLC (LON:ASH).

Originally a specialist in GP surgeries, an unintended consequence of 2012’s health reforms was this market all but disappeared.

WATCH: Ashley House says there is a growing need for care property

A switch into affordable/care housing followed, but this was similarly threatened by a proposed cap on housing benefit on occupants of this sort of accommodation.

The government bowed to widespread pressure and withdrew its proposal last October and since then things have started to look a lot brighter all around for Ashley House.

The acquisition of a modular building maker via F1 Modular Limited, has diversified the Company and given a potential growth leg to the business.

A joint development with Morgan Sindall Investments in December meanwhile has given it an even firmer firm foothold in the extra care and supported-living market.

Long-term care and how to look after people who need it is a huge problem.

Extra care joint venture

Morgan Ashley, the name of the joint venture, is a special vehicle set up specifically to deliver extra care housing.

Morgan Sindall brings long-term strategic property partnerships with Local Authorities, financial strength and construction capabilities, we bring our industry knowledge, technical know-how and pipeline,” Antony Walters, Ashley House’s chief executive, told Proactive.

“Together, we believe that we can make significant inroads into the current shortage of this type of housing.

“Morgan Sindall’s contracting and funding capabilities will really help us push on with the strategy,” he adds.

Housing for the elderly, those with care needs and for people with physical disabilities is the remit.

Ashley House designs accommodation for people who can live independently but still need a carer of some sort throughout the day.

"For example, in an extra care scheme, while every occupant has their own carefully designed well-appointed apartment, the buildings have access for wheelchairs and buggies, have assisted bathroom suites and access rooms for carers and district nurses use in supporting residents more cost-effectively."

If that sounds an expensive option, it is considerably cheaper than full time 24/7 care within a nursing home, while it also produces much better health outcomes as people living independently have a much better quality of life, says Walters.

Housing benefit

Typically, Ashley House works with a registered provider or housing association with the rentals funded through housing benefit from the government – hence the concern over the possible benefit cap.

A local council will arrange with the Housing Association to nominate people for the developments.

F1M, the modular business, dovetails neatly with the care business in some areas but has also taken Ashley House into school classrooms and even a hotel.

F1M has even provided modular retail units for Costa and Greggs.

The modular business is scalable with build time and quality - the key selling points.

“These are modern, steel-framed units with structurally insulated panelled walls which can be fully guaranteed and mortgageable.”

Located in Newtown, Wales, the plan here is to get this business up to capacity, says Walters.

Ashley House takes on the development of a project from concept to opening, working closely with the contractor and the end-investor, be it a housing association or specialist real estate investment trust.

More optimistic outlook

Results have reflected some of the recent social care policy difficulties, with revenues lower last year and the company posting a loss of £1.89mln in the half year to October.

A trading update in May, though, struck a much more optimistic tone.

Four social housing schemes reached financial close with a total gross development value of £36m.

Morgan Ashley also closed its first scheme, 75 extra care apartments in Ryde, on the Isle of Wight, with a scheme in Yorkshire next to complete.

F1 Modular signed a contract for a 40-apartment extra care facility in Aberdare and a positive profit contribution is expected from the business in 2019.

Overall, the full year result will show a considerable improvement since the half year, the statement said. Net debt also fell to £1.5mln from £3.6mln.

Investors have started to recognise the improvement with the shares rising, but Walters is confident there is more to come.

At 12p, Ashley House is valued at just over £7.2mln but with a massive social housing shortage, the aging population and now the backing of Morgan Sindall, he might well be right.

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