TIDMHMLH
RNS Number : 9088X
HML Holdings PLC
30 November 2017
HML HOLDINGS Plc
("HML")
HALF YEAR RESULTS
HML Holdings Plc (AIM: HMLH), the property management services
group, today announces its interim results for the six months to 30
September 2017.
Highlights for the six-month period:
-- Revenue up 25% to GBP12.7 million (2016: GBP10.2 million)
-- 10% increase in profit from operations before interest,
amortisation, share based payment charges and taxation to
GBP1,008,000 (2016: GBP920,000)
-- Continued integration of new acquisitions
-- Adjusted earnings per share 1.9p (2016: 2.1p). Adjusted
earnings are calculated before interest, amortisation and share
based payment charges.
Commenting on the results, Robert Plumb, Chief Executive Office
of HML Holdings Plc said:
"We are pleased to report a 25% growth in revenue for the period
and the on-going successful integration of our recent acquisitions.
While we have incurred additional one-off costs during the
reorganisation of the offices associated with acquisitions and have
made further investment in building capacity for further growth, we
are also pleased to report both a 10% growth in half-year earnings
before interest, amortisation, share based payment charges and
taxation and substantial growth in our new business pipeline."
For further information:
HML Holdings Plc Tel: 020 8439 8529
Robert Plumb, Chief Executive Officer
James Howgego, Chief Financial Officer
Tavistock Communications Limited Tel: 020 7920 3150
Jeremy Carey
James Verstringhe
FinnCap Tel: 020 7220 0500
Jonny Franklin-Adams/Giles Rolls - Corporate Finance
Mia Gardner - Corporate Broking
HML HOLDINGS PLC
STRATEGIC REPORT
Six months ended 30 September 2017
REVIEW OF BUSINESS
We are pleased to report a 25% increase in revenue to GBP12.7m
over the equivalent period last year and a 10% increase in earnings
before interest, share-based payments, amortisation and tax to
GBP1.0m (2016: GBP0.9m). As we continue to invest in the business,
additional one-off costs primarily relating to the integration of
acquisitions and associated investments in infrastructure have
impacted operating costs during the first half, which is reflected
in the reduced earnings per share for the period of 1.9p (2016:
2.1p).
Insurance brokerage revenue rose by 16% as the process of
assimilating clients from our acquisitions gathered pace during the
first half of the year. Professional fees increased 45% with a
significant additional contribution from our new Central London
operation; Faraday Property Management Limited which was acquired
on 1 April 2017. Legal and professional fees arising from
pre-contract enquiries and the administration of property sales and
alterations were proportionately lower than last year as the volume
of transactions, particularly in Central London reduced in line
with market sentiment. Although there have been only modest
improvements in revenues arising from health and safety inspections
and concierge staff management, we have invested further in
improving the capacity of both departments and anticipate greater
contributions in the second half of the year.
Market sentiment surrounding the demand for new building
development remains positive, although delivery and completion
remains frustratingly slow. HML has record levels of confirmed
instructions with a pipeline of over 17,000 units. We anticipate
the rate at which this pipeline becomes operational will improve
with the government's stated preparedness to support the home
building industry.
Apart from the ongoing development of our property management
systems, we have made further improvement to our information
technology infrastructure, both in terms of greater cyber security
and digitised transaction processing and filing systems. We have
also made a significant investment in the creation of a back office
in new offices in West Croydon, which has impacted costs in the
short term but provides us with the opportunity for standardising
and streamlining many of our support functions in a lower cost
environment.
I have commented in several industry reports on the growing
divide of service and regulatory compliance between the managing
agents that choose to comply with the professional standards of the
Royal Institution of Chartered Surveyors and the Association of
Residential Managing Agents and those that operate entirely
independently of their strictures. There is no doubt that the
freedom offered to unregulated players has not only created an
unfair competitive advantage for them but has fuelled the
perception of impropriety for a property management service that is
frequently misunderstood. We are therefore extremely pleased to
hear the Secretary of State for Communities and Local Government's
announcement that the activities of lettings and managing agents
will be regulated.
HML has made a significant investment in ensuring that we comply
with the codes of conduct of all our regulatory bodies and we
believe that this investment will yield a significant advantage
when all managing agents are obliged to comply with what we
anticipate will be specific regulatory requirements.
Robert Plumb
Chief Executive Officer
29 November 2017
HML HOLDINGS PLC
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Six months ended 30 September 2017
Unaudited Unaudited
6 months 6 months Audited
to to Year ended
30 September 30 September 31 March
2017 2016 2017
Continuing operations Notes GBP'000 GBP'000 GBP'000
------------------------------ --------- --------------- --------------- -------------
Revenue 12,717 10,176 20,910
------------------------------ --------- --------------- --------------- -------------
Direct operating expenses (11,113) (8,664) (17,796)
Central operating overheads (596) (592) (1,278)
Share based payment
charge (15) (13) (27)
Amortisation of intangible
assets (280) (228) (467)
Total central operating
overheads (891) (833) (1,772)
Operating expenses (12,004) (9,497) (19,568)
------------------------------ --------- --------------- --------------- -------------
Profit from operations 713 679 1,342
Finance costs (30) (22) (39)
Profit before taxation 4 683 657 1,303
Income tax charge (130) (118) (261)
------------------------------ --------- --------------- --------------- -------------
Profit for the period
attributable to equity
holders of the parent 553 539 1,042
Other comprehensive
income - - -
------------------------------ --------- --------------- --------------- -------------
Total comprehensive
income for the period
attributable to equity
holders of the parent 553 539 1,042
------------------------------ --------- --------------- --------------- -------------
Earnings per share
Basic 5 1.2p 1.4p 2.6p
Diluted 5 1.2p 1.4p 2.5p
------------------------------ --------- --------------- --------------- -------------
Adjusted earnings per
share
Basic 5 1.9p 2.1p 3.9p
Diluted 5 1.9p 2.0p 3.8p
------------------------------ --------- --------------- --------------- -------------
HML HOLDINGS PLC
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
COMPANY NUMBER: 5728008
30 September 2017
Unaudited Unaudited Audited
30 September 30 September 31 March
2017 2016 2017
GBP'000 GBP'000 GBP'000
-------------------------------- --------------- --------------- -----------
ASSETS
Non Current Assets
Goodwill 10,474 7,562 8,894
Other intangible assets 8,144 5,744 6,604
Property, plant and
equipment 858 714 701
19,476 14,020 16,199
-------------------------------- --------------- --------------- -----------
Current Assets
Trade and other receivables 3,249 2,399 5,619
Cash at bank - 76 -
3,249 2,475 5,619
-------------------------------- --------------- --------------- -----------
TOTAL ASSETS 22,725 16,495 21,818
--------------------------------- --------------- --------------- -----------
LIABILITIES
Current Liabilities
Trade and other payables 5,821 3,558 5,076
Bank overdraft and borrowings 739 150 1,119
Current tax liabilities 344 276 296
--------------------------------- --------------- --------------- -----------
6,904 3,984 6,491
-------------------------------- --------------- --------------- -----------
Non-Current Liabilities
Bank borrowing 1,471 1,350 1,679
Deferred tax 753 632 753
Non-current tax liabilities 130 118 -
--------------------------------- --------------- --------------- -----------
2,354 2,100 2,432
-------------------------------- --------------- --------------- -----------
NET ASSETS 13,467 10,411 12,895
--------------------------------- --------------- --------------- -----------
EQUITY
Share capital 681 587 671
Share premium 2,433 382 2,251
Other reserves (90) (84) (70)
Merger reserve (15) (15) (15)
Retained earnings 10,458 9,541 10,058
--------------------------------- --------------- --------------- -----------
TOTAL EQUITY 13,467 10,411 12,895
--------------------------------- --------------- --------------- -----------
HML HOLDINGS PLC
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Six months ended 30 September 2017
Share Share Other Merger Retained Total
capital premium reserve reserve earnings equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 1 April
2016 583 344 (86) (15) 9,118 9,944
--------------------- ----- ----- ------ ------ ------- -------
Total comprehensive
income for the
period - - - - 539 539
Share based payment
charge - - - - 13 13
Share capital
issued 4 38 - - - 42
Dividend - - - - (129) (129)
Shares sold by
EBT - - 2 - - 2
Balance at 30
September 2016 587 382 (84) (15) 9,541 10,411
------------------ ----- ----- ------ ------ ------- --------
Total comprehensive
income for the
period - - - - 503 503
Share based payment
charge - - - - 14 14
Share capital
issued 84 1,869 - - - 1,953
Shares sold by
EBT - - 14 - - 14
Balance at 31
March 2017 671 2,251 (70) (15) 10,058 12,895
---------------- ----- ------- ------ ------ -------- --------
Total comprehensive
income for the
period - - - - 553 553
Share based payment
charge - - - - 15 15
Share capital
issued 10 182 - - - 192
Dividend - - - - (168) (168)
Shares purchased
by EBT - - (20) - - (20)
Balance at 30
September 2017 681 2,433 (90) (15) 10,458 13,467
------------------ ----- ------- ------ ------ -------- --------
HML HOLDINGS PLC
CONSOLIDATED STATEMENT OF CASH FLOWS
Six months ended 30 September 2017
Unaudited Unaudited Audited
6 months to 6 months to Year ended
30 September 30 September 31 March
Notes 2017 2016 2017
GBP'000 GBP'000 GBP'000
---------------------------------------------------- --------- --------------- --------------- -------------
Operating activities
Cash generated from operations 6 1,037 913 1,878
Income taxes refunded/(paid) 48 12 (229)
Interest paid (30) (22) (39)
Net cash from operating activities 1,055 903 1,610
---------------------------------------------------- --------- --------------- --------------- -------------
Investing activities
Purchases of property, plant and equipment (313) (157) (306)
Shares (purchased)/sold by EBT (20) - 16
Purchase of software (119) (110) (220)
Acquisition of businesses (2,237) (1,006) (2,390)
Payment of deferred/contingent consideration (92) (72) (230)
Transfer from/(to) solicitor re: acquisition 2,122 - (2,122)
---------------------------------------------------- --------- --------------- --------------- -------------
Net cash used in investing activities (659) (1,347) (5,252)
---------------------------------------------------- --------- --------------- --------------- -------------
Financing activities
Drawdown of loans - 925 1,725
Repayment of loans (150) - (150)
Net movement in overdraft (438) (447) 201
Shares issued 192 42 1,995
Dividend payment - - (129)
Net cash from financing activities (396) 520 3,642
---------------------------------------------------- --------- --------------- --------------- -------------
Increase in cash and cash equivalents - 76 -
Cash and cash equivalents at beginning of period - - -
---------------------------------------------------- --------- --------------- --------------- -------------
Cash and cash equivalents at end of period - 76 -
==================================================== ========= =============== =============== =============
HML HOLDINGS PLC
NOTES TO THE ACCOUNTS
1. General Information
The interim unaudited financial information was approved by the
board on 29 November 2017.
The results for the year ended 31 March 2017 have been audited
whilst the results for the six months ended 30 September 2016 and
30 September 2017 are unaudited. The financial information
contained in this interim report does not constitute statutory
accounts for the year ended 31 March 2017. The statutory accounts
for that year, which were prepared under International Financial
Reporting Standards ('IFRS'), have been delivered to the Registrar
of Companies. The auditor's opinion on those accounts was
unqualified, did not draw attention to any matters by way of
emphasis and did not contain a statement under section 498 (2) or
498 (3) of the Companies Act 2006.
Copies of the interim report are available from www.hmlgroup.com
or from the Company Secretary at HML Holdings plc, 9-11 The
Quadrant, Richmond, Surrey, TW9 1BP.
2. International Financial Reporting Standards
The consolidated financial information has been prepared using
accounting policies consistent with IFRS as adopted by the European
Union applied in accordance with the provisions of the Companies
Act 2006.
The accounting policies applied are consistent with those of the
audited annual financial statements for the year ended 31 March
2017 and expected to apply for the year ended 31 March 2018.
Whilst the financial figures included in this interim report
have been computed in accordance with IFRS, this interim report
does not contain sufficient information to constitute an interim
financial report as that term is defined in IAS 34.
3. Taxation
Taxation for the six months to 30 September 2017 is based on the
effective rate of taxation of 19% which is estimated to apply for
the year ending 31 March 2018.
4. Profit before interest, Unaudited Unaudited Audited
share based payments 6 months 6 months Year ended
charges, amortisation to to 31 March
and taxation 30 September 30 September 2017
2017 2016 GBP'000
GBP'000 GBP'000
--------------------------------- --------------- --------------- -------------
Operating profit before
interest, share based
payment charges, amortisation
and taxation 1,008 920 1,836
--------------------------------------- --------------- --------------- -------------
Finance costs (30) (22) (39)
--------------------------------------- --------------- --------------- -------------
Operating profit before
share based payment
charges, amortisation
and taxation 978 898 1,797
--------------------------------------- --------------- --------------- -------------
Share based payment
charge (15) (13) (27)
Amortisation of intangible
assets (280) (228) (467)
Profit before taxation 683 657 1,303
--------------------------------------- --------------- --------------- -------------
5. Earnings per share Unaudited Unaudited Audited
6 months 6 months Year ended
to to 31 March
30 September 30 September 2017
2017 2016 GBP'000
GBP'000 GBP'000
--------------------------------- --------------- --------------- -------------
Profit after tax for
the period (GBP'000s)
(used to calculate the
basic and diluted earnings
per share)
Add back: 553 539 1,042
Share based payment
charge 15 13 27
Amortisation of intangible
assets 280 228 467
Finance costs 30 22 39
--------------------------------------- --------------- --------------- -------------
Adjusted profit after
tax for the period (GBP'000s)
(used to calculate the
basic and diluted adjusted
earnings per share) 878 802 1,575
--------------------------------------- --------------- --------------- -------------
Weighted average number
of shares (000s)
For basic earnings per
share 45,135 38,921 40,628
Effect of dilutive potential
ordinary shares:
- share options 1,106 980 1,264
Fully diluted 46,241 39,901 41,892
Earnings per share
Basic 1.2p 1.4p 2.6p
Diluted
Adjusted earnings per
share 1.2p 1.4p 2.5p
Basic 1.9p 2.1p 3.9p
Diluted 1.9p 2.0p 3.8p
--------------------------------------- --------------- --------------- -------------
6. Notes to the cash flow Unaudited Unaudited Audited
statement 6 months 6 months Year ended
Cash generated from to to 31 March
operations 30 September 30 September 2017
2017 2016 GBP'000
GBP'000 GBP'000
----------------------------------- --------------- --------------- -------------
Profit from operations 713 679 1,342
Adjustments for:
Share-based payment
charge 15 13 27
Depreciation of plant
and equipment 156 144 306
Amortisation of intangible
assets 280 228 467
Operating cash flows
before movements in
working capital 1,164 1,064 2,142
Decrease/(increase)
in trade and other receivables 248 106 (992)
(Decrease)/increase
in trade and other payables (375) (257) 728
Cash generated from
operations 1,037 913 1,878
----------------------------------------- --------------- --------------- -------------
This information is provided by RNS
The company news service from the London Stock Exchange
END
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