Interim Results

Ashley House plc

Interim report 2012

Ashley House plc ("Ashley House" or the "Company") the health and community care property partner today announces its interim results for the six months ended 31 October 2012.

Highlights

6 months ended 31 October 2012

"We are pleased that the demand from our new business areas is coming through and remain confident that the future prospects are strong. The Board expects our NHS business to continue to be challenging in the short term, but we cautiously anticipate a recovery in the medium term."

Sir William Wells, Chairman

Financial

• Revenue of £7.2m (2011: £11.3m)

• EBITDA profit of £0.5m (2011: loss £0.2m)

• Loss before taxation £0.5m (2011: loss £19.4m)

• Net assets of £17.9m (2011: £20.7m)

• Net debt £2.2m (2011: £2.0m)

• £7m of tax losses to be carried forward

Operational

• Strategy to increase level and diversity of earnings whilst reducing cost base is bearing fruit

• Revenues from new business areas increasing, representing 41% of total revenue (2011: 20%)

• Four schemes currently on site with others expected to commence shortly (2011: Seven)

• Forward pipeline totalling £274.5m

• As anticipated NHS pipeline down 8% to £97.8m from the amount disclosed in July 2012

• New business pipeline up 10% to £176.7m from the amount disclosed in July 2012

Enquiries:

Ashley House plc 01628 600 340

Jonathan Holmes, Chief Executive

Antony Walters, Finance Director

Citigate Dewe Rogerson 0207 638 9571

Ginny Pulbrook, Executive Director

Jos Bieneman, Manager

Numis Securities (Nominated Adviser and broker to Ashley House) 0207 260 1000

Oliver Cardigan / David Poutney

Chairman's statement

Results

I stated in July that we expected trading in the year to 30 April 2013 to remain tough, although the new strategy to increase the level and range of earnings whilst managing the cost base would lead to growth in the medium term. I am pleased to report that we are on track and the Company has been able to show a profit of £0.5m at EBITDA level in the first half of the year (2011: EBITDA loss £0.2m). This led to a loss after tax of £0.5m (2011: £18.2m) following interest, restructuring costs and the expected non cash impairment of the LIFTCo intangible of £0.5m. Current trading is in line with the Board's expectations subject to the receipt of planning consent within the normal statutory period on two important schemes.

As expected, our core NHS market remains tough although we have seen growth in our new business areas. Revenues from new business, particularly in extra care social housing, represented 41% of total revenue in this period compared to 20% in the corresponding period last year. In total, revenue was down to £7.2m compared to £11.3m for the same period last year. This fall is a natural consequence in the drop off in work in our core NHS business with fewer schemes on site. Our activity in this period comprised more pre construction work on schemes in our new sectors.

Net Debt

The table below shows a net debt position at 31 October 2012 of £2.2m (2011 £2.0m; April 2012 £6.7m). The Company currently holds no scheme related debt on the balance sheet and the Scarborough borrowing is being amortised (following the acquisition of the remaining 50% of the company at the end of April 2012). Whilst existing working capital requirements will be met within our current facilities, cash remains tight and there is little additional scope to finance growth. As a consequence we are working on funding solutions for our schemes to resolve this.

Pipeline

Compared to the last discussed chart in July, our new markets continue to prosper and the pipeline is growing both in this sector and overall. This is in spite of the on-going delays which continue to restrict the NHS derived schemes (PCT funded) which show a modest fall in value. The schemes in "active discussion" are those on which we are currently bidding (short list stage) or where we are in discussions with providers, often exclusively. A significant number of these schemes will come through to the appointed stage. Our pipeline as at December 2012 can be analysed as follows:

As a guide, revenues from on site schemes will be recognised over the next 12 months. Schemes where the Company is in a fee protected position will see revenues recognised over the next 24 months. Where the Company is appointed the time frame is likely to be 12 to 36 months and where we are in active discussions 18 to 48 months.

NHS Core Business

The re-organisation of the NHS is nearing completion but ahead of the abolition of the PCTs in March 2013, is still not finished. However, there has been some further clarity in the last few weeks which we cautiously believe will help both ourselves and our partners, in both the public and private sectors, re-invigorate our LIFT and Health business. We are considering ways of enhancing this opportunity and will report further in due course.

New Business Sectors

The Company has made substantial progress in extra care housing. Our offer, which reduces costs being paid by Local Authorities and improves lives by keeping people out of residential and institutional care settings, is proving of great interest. We anticipate further significant contract wins in the coming year.

Outlook

The Board expects our NHS business to continue to be challenging in the short term, but we cautiously anticipate a recovery in the medium term. We are pleased that the demand from our new business areas is coming through and are confident that the future prospects are strong.

Sir William Wells

ChairmanAshley House plc

17 December 2012

* See note 2

** Adjusted EBITDA = EBITDA plus adjustment for exceptional items and income tax credit

* See note 2

* See note 2

Notes to the condensed consolidated interim financial statements

1 Nature of operations

The principal activity of the Group is the supply of design, construction management, consultancy and asset management services, primarily working with providers of healthcare and social care on infrastructure developments from project inception to completion of construction and beyond.

The address of registered office is in the Company information below.

Ashley House's condensed consolidated interim financial statements (the interim financial statements) are presented in pounds sterling (£), which is also the functional currency of the parent company. These interim financial statements were approved for issue by the Board of directors on 17 December 2012.

The financial information set out in these interim financial statements does not constitute statutory accounts as defined in Section 434 of the Companies Act 2006. The Group's statutory financial statements for the year ended 30 April 2012 have been filed with the Registrar of Companies. The auditor's report on those financial statements was unqualified and did not contain a statement under Section 498(2) of the Companies Act 2006.

2 Basis of preparation

These interim financial statements are for the six months ended 31 October 2012. They have been prepared following the recognition and measurement principles of IFRS. They do not include all of the information required for full annual financial statement and should be read in conjunction with the consolidated financial statements of the Group for the year ended 30 April 2012.

These interim financial statements have been prepared on the going concern basis, under the historical cost convention, except for the revaluation of certain financial instruments which are carried at fair value.

These interim financial statements have been prepared in accordance with the accounting policies adopted in the last annual financial statements for the year to 30 April 2012.

In the year ended 30 April 2012 the Group revised its accounting policy in respect of joint ventures and associates. The Group now accounts for investments in joint ventures and associates under the equity accounting method where previously the proportional consolidation method was used. This revision was made in anticipation of adopting IFRS11 Joint Arrangements in the current period, under which the proportional consolidation method is not permitted. Full details of the effects of this revision are included within the Group's Annual Report and Financial Statements for the year ended 30 April 2012.

As a result of this accounting policy revision, the comparative financial statements and related disclosures for the period ended 31 October 2011 have been restated in these interim financial statements. Due to the revised treatment of dividend distributions made by joint ventures and associated companies prescribed by the equity accounting method this restatement has increased the retained earnings for the period to 31 October 2011 and the net assets at that date by £422,000 from the amounts reported in the interim financial statements for the period to 31 October 2011.

3 Earnings per share

The calculation of the basic earnings per share is based on the (loss)/profit attributable to ordinary shareholders divided by the weighted average number of shares in issue during the period.

* Adjusted EBITDA = EBITDA plus adjustment for exceptional items and income tax credit.

4 Dividends

No dividend was paid or proposed in the 6 months to 31 October 2012 (Year to 30 April 2012: £nil)

5 Investments in joint ventures and associates

LIFTCo intangibles

The Group holds interests in seven NHS Local Improvement Finance Trust companies ("LIFTCo"). The exclusivity periods of these arrangements which underpin the value of the business have a further 12 years to run on average.

Impairment

The carrying value of the LIFTCo investment was reviewed at 31 October 2012, and an impairment of £500,000 was recorded. A full impairment review of the LIFTCo investment will be performed before 30 April 2013.

The carrying value of the Group's investment in Best Practice (South of England) Limited was also reviewed at 31 October 2012. As a result of this review the carrying value was written down to £nil, resulting in an impairment charge of £4,000.