Anshei Hair in the First Quarter: Project Financing Is Moving Faster Than Sales and Cash
Anshei Hair opened 2026 with higher revenue and gross profit, but signed only 4 apartment sale agreements in the quarter and used NIS 56.6 million in operating cash flow. Permits, project financing, and the Menrav transaction move the backlog forward, but they still do not prove that projects are releasing cash fast enough.
The first quarter of Anshei Hair reinforces the reading that was already visible after 2025, but adds a new layer of pressure: the company is moving ahead on permits, project financing, and project-level partnerships, while sales and cash still lag the planning progress. Revenue rose to NIS 45.6 million and gross profit rose to NIS 6.5 million, but the quarter itself included only 4 sale agreements totaling about NIS 15 million, compared with 6 agreements and about NIS 29 million in the comparable quarter. Operating cash flow was negative NIS 56.6 million, and cash fell from NIS 51.8 million at the end of 2025 to NIS 15.4 million at the end of March. This quarter does not break the business story, because the company received permits for Yehuda Gur, Epstein, and Mane, signed financing agreements for Mane and Epstein, and brought Menrav in as a partner in La Guardia. Still, these moves buy time, reduce part of the burden, and raise execution probability, but they do not replace binding sales, collections, and surplus releases. The 2026 proof point remains simpler than the large backlog: will the new permits and financing facilities start reducing cash consumption, or will they mainly expand the funding layer before projects release value to shareholders?
Company Setup
Anshei Hair is a relatively small urban-renewal developer, with most of its activity concentrated in Tel Aviv. At the end of March, it was involved in about 52 projects in Tel Aviv-Yafo, one project in Givatayim, and one project in Bat Yam, totaling about 5,288 housing units, of which 3,129 units are intended for sale or have already been sold. This is not an income-producing real estate company with recurring NOI. It is a project company: value is created when signatures, planning, and permits advance into construction, sales, project financing, and surplus cash releases.
That model explains why negative cash flow is not unusual by itself. In development, and especially in urban renewal, the years before delivery consume credit, guarantees, tenant costs, planning expenses, and financing. The abnormal point here is the pace. After the prior annual analysis, the question was not whether the backlog exists, but how quickly it moves from permitting into sales and cash. The first quarter still gives only a partial answer.
The market layer also matters. The shares trade at a market value of about NIS 165 million, and short interest is almost nonexistent, with short float around 0.01%. Near-term interpretation therefore depends less on technical pressure in the stock and more on execution news: permits, financing, binding sales, collections, or a partnership deal that changes how much funding the company has to carry alone.
Profit Improved, But Sales and Cash Did Not Follow
The accounting headline looks better than 2025. Revenue rose by about 29.8%, gross profit rose by about 41%, and the operating loss narrowed to only NIS 260 thousand. But the net loss widened to NIS 4.2 million, mainly because finance expenses rose to NIS 5.7 million from NIS 3.2 million in the comparable quarter. That matters for a company whose projects still require financing facilities and bridge credit.
The sales side is sharper. The quarter included only 4 binding sale agreements totaling about NIS 15 million, compared with 6 agreements and about NIS 29 million in the comparable quarter. After the end of March, the company signed one additional agreement of about NIS 3 million and received 3 non-binding registration requests totaling about NIS 58 million. Those requests are relevant, but they are not sale agreements. For a company trying to move new projects into execution, the difference between initial buyer interest and a binding contract is the difference between a backlog story and actual project funding.
| Quarterly Metric | Q1 2025 | Q1 2026 | Interpretation |
|---|---|---|---|
| Revenue | NIS 35.1 million | NIS 45.6 million | Revenue recognition already benefits from projects sold and advanced in prior periods |
| Gross profit | NIS 4.6 million | NIS 6.5 million | The improvement exists, but remains small compared with finance costs |
| Net loss | NIS 2.8 million | NIS 4.2 million | Operating improvement is not enough to absorb the funding cost |
| Operating cash flow | (NIS 50.2 million) | (NIS 56.6 million) | Project progress still consumes cash |
| Sale agreements | 6 units, about NIS 29 million | 4 units, about NIS 15 million | There is no commercial acceleration yet that justifies a full change in the read |
On an all-in cash flexibility basis, meaning after operating cash flow, investment cash flow, and movements in project and investment accounts, the quarter required about NIS 55.1 million before financing. Financing activities added NIS 18.6 million, mainly from project credit and longer-term loans, so cash declined by NIS 36.4 million. This is not an immediate liquidity warning, because the company reports positive working capital and points to credit facilities, debt issuance capacity, and future backlog that can support surplus-backed borrowing. But it does mean that quarterly gross profit is still far from becoming a standalone cash source.
Financing and Menrav Reduce Pressure, But Not the Cost of the Interim Period
The positive news sits on the project side. Yehuda Gur 7 received a building permit on January 25, 2026, Epstein 4 received a permit on February 9, 2026, and Mane 4 received a permit after the balance-sheet date on May 18, 2026. Project financing also advanced: Mane received a project credit facility of about NIS 53 million, Sale Law or mortgage-bank guarantees of about NIS 83 million, financial credit of about NIS 16 million, and an equity-completion facility of about NIS 2.3 million. Epstein received a project credit facility of about NIS 70 million, guarantees of about NIS 83 million, financial credit of about NIS 20 million, and an equity-completion facility of about NIS 3 million.
The company therefore advanced exactly the checkpoints that were open at the end of 2025: permits and financing for the intermediate projects. The next layer is still missing. Yehuda Gur, Epstein, and Mane were still presented at the end of March as projects in planning with a 0% financial completion rate, and together they had only 2 signed contracts near the report publication date: one in Epstein and one in Mane. They represent expected revenue of about NIS 199 million and expected gross profit of about NIS 35.3 million, but for now that is mainly potential that still has to move into execution and sales.
The NIS 30 million loan agreement signed on March 31 and drawn after the balance-sheet date eases the short term, but it also clarifies the cost of the interim period. Principal is due in one payment after 24 months, the interest rate is prime plus a spread of 0.7% to 1.7%, and the collateral package includes unlimited guarantees from the controlling shareholders. That owner support is an important flexibility source for a small company, but it also shows that the path from permit to cash still depends on credit and shareholder support capacity.
| Move | What It Improves | What Remains Open |
|---|---|---|
| Permits for Yehuda Gur, Epstein, and Mane | Moves projects from planning toward execution | Binding sales and actual start of construction remain limited |
| Financing agreements for Mane and Epstein | Allocates project credit and guarantee facilities | Use of the facilities depends on conditions and sales pace |
| NIS 30 million loan | Adds liquidity after quarter-end | Principal comes due in 24 months and the debt relies on owner guarantees |
| Menrav transaction in La Guardia | Brings in a partner, staged cash, and reimbursement of part of past investment | The company gives up 49% of the project and remains subject to closing conditions |
The Menrav transaction is a more meaningful asset change than another permit. La Guardia 35-45 is a very large project relative to the company, with 420 housing units, 300 units for sale, expected revenue of about NIS 1.06 billion, and expected gross profit of about NIS 210.3 million. Selling 49% of the rights and obligations for NIS 32 million, plus reimbursement of about NIS 3.5 million for past investment, can reduce balance-sheet load and bring in a substantial execution partner. The other side is the sale of a large share of the upside in the most central project in the backlog, and the receipt of 49% in two Menrav projects on Ibn Gabirol that are themselves subject to tenant approvals and additional conditions. This is a transaction that makes more value accessible in the short term, but it also makes the story less clean: less full exposure to La Guardia, more partnership economics, closing conditions, and joint execution dependence.
What Decides 2026
The first quarter is not as weak as negative operating cash flow of NIS 56.6 million may first appear, but it also does not prove that the gap has closed. The company progressed on the milestones that should open 2026: permits, financing, a loan, and a partner for a large project. Still, the current read is that the company is in a transition year in which the backlog is getting financing infrastructure before it generates cash. Real improvement will require intermediate projects to show binding sales, financing facility usage that replaces more expensive credit, and completion of the Menrav transaction under terms that bring in cash without giving away too much future upside.
The counter-thesis is reasonable: the market may view this quarter as a normal stage for a small developer, where permits and financing arrive before profit recognition and cash flow. Under that reading, the loss and negative cash flow are a temporary cost of moving from planning backlog to execution backlog. But for that read to strengthen, the next reports need to show one simple action: less external funding required for each shekel of project progress. Until then, Anshei Hair is no longer only a backlog and permits story. It is a story about how quickly financing, partnerships, and sales turn into surplus cash that remains in the company.
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