Diversification and changes to government policy have ‘significantly improved’ the prospects of health and community care property contractor Ashley House.

While trading during the year ending 30 April 2018 was ‘difficult’, according to the group’s financial statement, the company was able to close four major schemes in the latter part of the period after the government reversed a restriction to housing benefit, which had been stalling development projects.

In October 2017, Prime Minister Theresa May announced a local housing allowance cap that had threatened to restrict the amount of housing benefit available for schemes, such as those developed by Ashley House, would not be imposed.

The report: ‘The group was subsequently able to take three extra care schemes to financial close and on to site.

‘This key event for the group has enabled the unblocking of its pipeline of extra care developments. With the threat to rental streams significantly diminished, the improved investability of those schemes has stimulated demand and we have seen an increasing number of real estate investment trusts as well as housing association clients themselves keen to acquire this type of property.’

Trade was also helped by its joint venture with construction and regeneration group Morgan Sindall Investments. Known as Morgan Ashley the venture delivers extra care housing, care homes, and supported living housing for vulnerable people.

Ashley House’s financial report showed that revenue during the reporting period slightly dipped to £18.5m (2017: £18.6m), while costs of sales also fell to £13.7m, from £14.9m in the year before.

Following administrative expenses of £3.4m (2017: £3m) and other cost and gains made during the year, the business was left with a pre-tax profit of £1.8m, up from £67,000.

The group’s purchase of F1 Modular Ltd (F1M) in March 2017 has now been bedded into the group, the report said. Energy efficient modular buildings are created in its 70,000 sq ft factory in Newtown, Powys, with modules used by retailers, schools, housing associations and potentially for a hotel.

Despite F1M making losses during the financial period, the group said orders would contribute to its profits this year.

Antony Walters (pictured), Ashley House chief executive, said in the report: ‘We believe that the business is now well placed to benefit from the growing need for health and social care property, whether built traditionally or in modular form, and therefore look forward with increasing confidence.’