16th Aug 2018 10:45
LONDON (Alliance News) - Health and social care services provider Ashley House PLC's shares rose Thursday as the company reported a strong profit increase due to the reversal of an impairment, while its outlook is also very positive.
Shares in Ashley House were 16% higher on Thursday morning at 16 pence each.
For the 12 months to April, Ashley House's revenue was broadly flat at GBP18.5 million from GBP18.6 million, but pretax profit jumped to GBP1.8 million from GBP67,000.
This was due mainly to a GBP512,000 impairment reversal, lower cost of sales ahead of the fall in revenue, as well as lower interest payments and a higher share of results from joint ventures.
Ashley House said two strategic events had a "significant" positive effect on the company, as did a reversal by the UK government on a plan to restrict housing benefit which had hindered development in the industry.
The first of these was to establish a 50/50 joint venture with Morgan Sindall Investments Ltd for care housing, care homes, and supported livings.
Secondly, Ashley House increased its involvement with F1 Modular Ltd, in which it now has a 76% stake.
In October, Prime Minister Theresa May said the UK government would not be going ahead with a restriction on housing benefits, which Ashley House said meant it was able to take three schemes to financial close, and the government's decision to then introduce an oversight scheme into the current funding model for care housing was a "very positive" development for the company.
Looking ahead, Ashley House said the change in government policy has benefited it, while the new partnerships have also improved the outlook for the company.
Related Shares:
ASH.L