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Half Year Results 2019 26th November 2019

HML HOLDINGS Plc

(“HML” or the “Group”)

 

HALF YEAR RESULTS

 

 

Highlights for the six-month period:

 

·      Revenue up 14% to £15.5m (2018: £13.6m)

·      Adjusted operating profit has reduced by 5% to £1.07m (2018: £1.12m)*

·      Cash generated from operations was £1.39m (2018: £1.56m)

·      Adjusted earnings per share fell to 2.1p (2018: 2.2p)**

·      Units under management increased to 82,000 (2018: 76,000)

 

*before interest, share based payment charges, amortisation and tax (see note 4)

**before interest, share based payment charges, amortisation and tax (see note 5)

 

Commenting on the results, Robert Plumb, Chief Executive Officer of HML Holdings Plc said:

 

“We are pleased to report continuous growth for the group in challenging market conditions. Our ability to buy and successfully integrate acquisitions is improving, and while we are yet to see the full benefits flow through, we are confident that our strategy will deliver significant value to shareholders in the long-term.”

 

 

For further information:

 

www.hmlgroup.com

 

HML Holdings Plc                                                                               Tel: 020 8439 8529

Robert Plumb, Chief Executive Officer

James Howgego, Chief Financial Officer

Alec Guthrie, Chief Operating Officer

 

Tavistock Communications Limited                                                     Tel: 020 7920 3150

Jeremy Carey

James Verstringhe

 

FinnCap                                                                                               Tel: 020 7220 0500

Ed Frisby/Giles Rolls – Corporate Finance

Camille Gochez/Tim Harper – ECM

 

REVIEW OF BUSINESS

Reductions in a number of revenue lines that are more susceptible in this slower economic environment have however contributed to a £0.05m fall in earnings before interest, share based payments, amortisation and tax which are £1.07m for the six-month period (2018: £1.12m). While we have seen strong growth in some of our more resilient revenue lines, such as insurance which is up 15% on last year, others including pre-contract enquiries and surveying have not increased in line with the growth in our business generally.

 

HML has also experienced, as others in high employee cost sectors such as property services, a proportionately high increase in salary costs. This is contrary to the downward pressure typically associated with economic turndowns.  We have found that salary expectations in sectors with a comparatively high level of employment, like our own, have increased relative to the inflationary levels achievable in the fees for our services.

Robert Plumb                                                                                                 

Chief Executive Officer                                                                                               

25 November 2019

 

 

 

HML HOLDINGS PLC

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

Six months ended 30 September 2019

Continuing operations

 

 

Notes

Unaudited

6 months to

30 September

2019

£’000

Unaudited

6 months to

30 September

2018

£’000

Audited

Year ended

31 March

2019

£’000

Revenue

15,492

13,557

28,110

Direct operating expenses

(13,743)

(11,788)

(24,332)

Central operating overheads

(681)

(649)

(1,365)

Share based payment charge

(25)

(18)

(37)

Amortisation of intangible assets

(355)

(320)

(640)

Total central operating overheads

(1,061)

(987)

(2,042)

Operating expenses

(14,804)

(12,775)

(26,374)

Profit from operations

688

782

1,736

Finance costs

(54)

(26)

(50)

Profit before taxation

4

634

756

1,686

Income tax charge        

(120)

(140)

(305)

Profit for the period attributable to equity holders of the parent

514

616

1,381

Other comprehensive income

Total comprehensive income for the period attributable to equity holders of the parent

514

616

1,381

Earnings per share

Basic

5

1.1p

1.4p

3.0p

Diluted

5

1.1p

1.3p

3.0p

Adjusted earnings per share

Basic

5

2.1p

2.2p

4.6p

Diluted

5

2.0p

2.1p

4.6p



HML HOLDINGS PLC

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

COMPANY NUMBER: 5728008

30 September 2019

 

 

 

 

 

 

Unaudited

30 September

2019

£’000

Unaudited

30 September

2018

£’000

Audited

31 March

2019

£’000

ASSETS

Non-Current Assets

Goodwill

12,330

10,510

11,384

Other intangible assets

8,279

7,748

8,373

Property, plant and equipment

6,437

1,060

1,030

27,046

19,318

20,787

Current Assets

Trade and other receivables

3,010

3,225

3,804

Cash at bank

516

235

3,010

3,741

4,039

TOTAL ASSETS

30,056

23,059

24,826

LIABILITIES

Current Liabilities

Trade and other payables

5,498

5,198

6,602

Bank overdraft and borrowings

1,092

529

529

Lease liabilities

1,239

Current tax liabilities

381

341

357

8,210

6,068

7,488

Non-Current Liabilities

Bank borrowing

414

943

1,268

Deferred tax

1,267

1,124

679

Lease liabilities

4,108

Non-current tax liabilities

120

140

5,909

2,207

1,947

TOTAL LIABILITIES

14,119

8,275

9,435

NET ASSETS

15,937

14,784

15,391

 

EQUITY

Share capital

688

686

687

Share premium

2,504

2,485

2,498

Other reserves

(87)

(88)

(87)

Merger reserve

(15)

(15)

(15)

Retained earnings

12,847

11,716

12,308

TOTAL EQUITY

15,937

14,784

15,391

HML HOLDINGS PLC

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

Six months ended 30 September 2019

 

 

Share capital £’000

Share premium £’000

Other reserve £’000

Merger reserve £’000

Retained earnings £’000

Total equity £’000

 

 

Balance at 1 April 2018

682

2,450

(88)

(15)

11,082

14,111

 

Total comprehensive income for the period

616

616

Share based payment charge

18

18

Share capital issued

4

35

39

 

Balance at 30 September 2018

686

2,485

(88)

(15)

11,716

14,784

 

Total comprehensive income for the period

765

765

Share based payment charge

19

19

Share capital issued

1

13

14

Share sold by EBT

1

1

Dividend

(192)

(192)

 

Balance at 31 March 2019

687

2,498

(87)

(15)

12,308

15,391

 

Total comprehensive income for the period

514

514

Share based payment charge

25

25

Share capital issued

1

6

7

 

Balance at 30 September 2019

688

2,504

(87)

(15)

12,847

15,937

 

HML HOLDINGS PLC

CONSOLIDATED STATEMENT OF CASH FLOWS

Six months ended 30 September 2019

 

 

 

 

 

Notes

Unaudited

6 months to

30 September

2019

£’000

Unaudited

6 months to

30 September

2018

£’000

Audited

Year ended

31 March

2019

£’000

Operating activities

Cash generated from operations

6

1,389

1,562

3,606

Income taxes refunded/(paid)

23

(8)

(297)

Interest paid

(19)

(26)

(50)

Net cash from operating activities

1,393

1,528

3,259

Investing activities

Purchase of property, plant and equipment

(235)

(454)

(629)

Acquisition of own shares

1

Purchase of software

(128)

(120)

245

Acquisition of businesses

(1,050)

(6)

(994)

Payment of deferred/contingent consideration

(520)

(476)

(759)

Net cash used in investing activities

(1,933)

(1,056)

(2,626)

Financing activities

Repayment of loans

(265)

(264)

(528)

Net movement in overdraft

563

Shares issued

7

39

53

Dividend payment

(192)

Net cash from/(used in) financing activities

305

(225)

(667)

Increase in cash and cash equivalents

Cash and cash equivalents at beginning of period

(235)

235

247

269

(34)

269

Cash and cash equivalents at end of period

516

235

 

 

           

HML HOLDINGS PLC

NOTES TO THE ACCOUNTS

Six months ended 30 September 2019

 

1.         General Information

 

The interim unaudited financial information was approved by the board on 25 November 2019.

 

The results for the year ended 31 March 2019 have been audited whilst the results for the six months ended 30 September 2018 and 30 September 2019 are unaudited.  The financial information contained in this interim report does not constitute statutory accounts for the year ended 31 March 2019.  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.

 

The accounting policies applied are consistent with those expected to apply for the year ended 31 March 2020. IFRS 16 Leases been applied for the first time in preparing the interim financial information.  Note 7 sets out the key impacts on the Statement of Comprehensive Income and the Statement of Financial Position of the adoption of the new standard. 

 

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 2019 is based on the effective rate of taxation of 19% which is estimated to apply for the year ending 31 March 2020.

 



 

4.

Profit before interest, share based payments charges, amortisation and taxation

 

Unaudited

6 months to

30 September

2019

£’000

Unaudited

6 months to

30 September

2018

£’000

Audited

Year ended

31 March

2019

£’000

Operating profit before interest, share based payment charges, amortisation and taxation

1,068

1,120

2,413

Finance costs

(54)

(26)

(50)

Operating profit before share based payment charges, amortisation and taxation

1,014

1,094

2,363

Share based payment charge

(25)

(18)

(37)

Amortisation of intangible assets

(355)

(320)

(640)

Profit before taxation

634

756

1,686

 

 

5.

Earnings per share

Unaudited

6 months to

30 September 2019

 

Unaudited

6 months to

30 September

2018

 

Audited

Year ended

31 March

2019

 

Profit after tax for the period (£’000s)

(used to calculate the basic and diluted earnings per share)

Add back:

514

 

 

616

 

 

1,381

Share based payment charge

25

18

37

Amortisation of intangible assets

355

320

640

Finance costs

54

26

50

 

Adjusted profit after tax for the period (£’000s) (used to calculate the basic and diluted adjusted earnings per share)

948

980

2,108

Weighted average number of shares (000s)

For basic earnings per share

45,840

45,526

45,630

Effect of dilutive potential ordinary shares:

– share options

474

696

494

Fully diluted

46,314

46,222

46,124

Earnings per share

Basic

1.1p

1.4p

3.0p

Diluted

Adjusted earnings per share

1.1p

1.3p

3.0p

 

Basic

2.1p

2.2p

4.6p

Diluted

2.0p

2.1p

4.6p



6.

Notes to the cash flow statement

Cash generated from operations

Unaudited

6 months to

30 September 2019

£’000

Unaudited

6 months to

30 September

2018

£’000

Audited

Year ended

31 March

2019

£’000

Profit from operations

*688

**782

1,736

Adjustments for:

Share-based payment charge

25

18

37

Depreciation of plant and equipment

210

180

385

Amortisation of intangible assets

355

320

640

 

 

 

Operating cash flows before movements in working capital

1,278

1,300

2,798

 

Decrease in trade and other receivables

794

705

126

(Decrease)/increase in trade and other payables

(683)

(443)

682

Cash generated from operations

1,389

1,562

3,606

*Profit from operations is stated after charging depreciation of right of use assets totalling £580,000

 

            **Profit from operations is stated after charging rent of £522,000

 

 

7.         Adoption of accounting standard IFRS 16

 

            The Group has adopted IFRS 16 using the modified retrospective approach with the effect of applying this standard at the date of initial recognition of 1 April 2019, consequently comparatives have not been restated.

 

As a lessee, the Group has previously classified leases as operating or finance leases based on whether the lease transferred significantly all of the risks and rewards incidental to the ownership of the underlying asset. Under IFRS 16, the Group recognises right-of-use assets and lease liabilities for all leases on its balance sheet.

 

The key impacts on the Statement of Comprehensive Income and the Statement of Financial Position are as follows:

 

Right of

use asset

£’000

Lease

obligation

      £’000

Income statement

£’000

Balance on transition

Additions

5,962

(5,962)

Depreciation

(580)

(580)

Interest

(35)

(35)

 

 

Lease payments

614

614

Carrying value at 30 September 2019

5,382

(5,382)

The above IFRS 16 adjustment relates to the leases on the 24 offices rented by the Group.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

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