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Half Year Results 27th November 2018

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 2018.

 

Highlights for the six-month period:

·      Revenue up 7% to £13.6 million (2017: £12.7 million)

·      11% increase in profit from operations before interest, amortisation, share based payment charges and taxation to £1.12 million (2017: £1.01 million)

·      Cash generated from operations was £1.56 million (2017: £1.04 million)

·      Adjusted earnings per share 2.2p (2017: 1.9p).  Adjusted earnings are calculated before interest, amortisation and share based payment charges.

·      Net debt reduced to £0.96 million (2017: £1.47 million)

 

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

“This is an encouraging set of results for the first half of the year, especially when considered against the backdrop of an uncertain UK property market. To have recorded record half year earnings while we implement significant operational changes demonstrates that we are moving in the right direction as we create a property management services group fit to meet the challenges of the future.”

 

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

Ed Frisby/Giles Rolls – Corporate Finance
Camille Gochez – Corporate Broking

 

REVIEW OF BUSINESS

We are pleased to report earnings before interest, share based payments, amortisation and tax of £1.12m (2017: £1.01m) representing a 11% increase on the first 6 months of last year. Operating margins before and after taking into consideration central overhead costs improved to 13.0% (2017: 12.6%) and 8.3% (2017: 7.9%) respectively.

The growth in revenues and earnings is almost entirely organic as the Group has made no material acquisitions since 1 April 2017. In most areas our revenues remain resilient despite the uncertainty surrounding investment in the property sector. Most notably we recorded a strong improvement in health and safety inspections fee income which, to some extent, offset the fall in pre-contract enquiry fees on property sales. Although this latter transaction type represents only 3.5% of income the reduction in activity clearly impacted what would have been a very strong overall improvement in like for like revenues.

During the first half of the year, management continued to implement the planned reorganisation of segments of client processing to our back office in West Croydon and we are pleased to report that these changes, which will have a long term positive impact on efficiency and cost, are continuing to take place without a material impact on our levels of service provision. In the second half of the year we look forward to implementing the streamlining of our systems onto one database platform. This will create further efficiencies by allowing our divisions and offices to access and process transactions on one system.

We continue to enjoy steady and improving volumes of new business with a marginal shift towards tendering for larger blocks and housing estates. Competition particularly from the smaller unregulated players who price keenly in the smaller block market remains strong. The growing awareness of the impending regulation of agents, now more frequently reviewed in the property press, continues to bring sellers to the market. HML remains confident in its ability to carefully select and integrate those businesses that are compatible with our service strategy. From a steady foundation in the first half of the year, we look forward to being able to update you on further improvements in the second half of the year.

 

Robert Plumb
Chief Executive Officer
26 November 2018

HML HOLDINGS PLC

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

Six months ended 30 September 2018

Continuing operations

 

 

Notes

Unaudited

6 months to

30 September

2018

£’000

Unaudited

6 months to

30 September

2017

£’000

Audited

Year ended

31 March

2018

£’000

Revenue

13,557

12,717

25,968

Direct operating expenses

(11,788)

(11,113)

(22,509)

Central operating overheads

(649)

(596)

(1,248)

Share based payment charge

(18)

(15)

(30)

Amortisation of intangible assets

(320)

(280)

(660)

Total central operating overheads

(987)

(891)

(1,938)

Operating expenses

(12,775)

(12,004)

(24,447)

Profit from operations

782

713

1,521

Finance costs

(26)

(30)

(57)

Profit before taxation

4

756

683

1,464

Income tax charge        

(140)

(130)

(302)

Profit for the period attributable to equity holders of the parent

616

553

1,162

Other comprehensive income

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

616

553

1,162

Earnings per share

Basic

5

1.4p

1.2p

2.6p

Diluted

5

1.3p

1.2p

2.5p

Adjusted earnings per share

Basic

5

2.2p

1.9p

4.2p

Diluted

5

2.1p

1.9p

4.1p

 

HML HOLDINGS PLC

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

COMPANY NUMBER: 5728008

 

 

 

 

 

Unaudited

30 September

2018

£’000

Unaudited

30 September

2017

£’000

Audited

31 March

2018

£’000

ASSETS

Non-Current Assets

Goodwill

10,510

10,474

10,510

Other intangible assets

7,748

8,144

7,937

Property, plant and equipment

1,060

858

786

19,318

19,476

19,233

Current Assets

Trade and other receivables

3,225

3,249

3,930

Cash at bank

516

269

3,741

3,249

4,199

TOTAL ASSETS

23,059

22,725

23,432

LIABILITIES

Current Liabilities

Trade and other payables

5,198

5,821

6,112

Bank overdraft and borrowings

529

739

529

Current tax liabilities

341

344

349

6,068

6,904

6,990

Non-Current Liabilities

Bank borrowing

943

1,471

1,207

Deferred tax

1,124

753

1,124

Non-current tax liabilities

140

130

2,207

2,354

2,331

TOTAL LIABILITIES

8,275

9,258

9,321

NET ASSETS

14,784

13,467

14,111

 

EQUITY

Share capital

Share premium

2,485

2,433

2,450

Other reserves

(88)

(90)

(88)

Merger reserve

(15)

(15)

(15)

Retained earnings

11,716

10,458

11,082

TOTAL EQUITY

14,784

13,467

14,111

30 September 2018

HML HOLDINGS PLC

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

Six months ended 30 September 2018

Share capital £’000

Share premium £’000

Other reserve £’000

Merger reserve £’000

Retained earnings £’000

Total equity £’000

Balance at 1 April 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

Total comprehensive income for the period

609

609

Share based payment charge

15

15

Share capital issued

1

17

18

Shares sold by EBT

2

2

Balance at 31 March 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


HML HOLDINGS PLC

CONSOLIDATED STATEMENT OF CASH FLOWS

Six months ended 30 September 2018

 

 

 

Notes

Unaudited

6 months to

30 September

2018

£’000

Unaudited

6 months to

30 September

2017

£’000

Audited

Year ended

31 March

2018

£’000

Operating activities

Cash generated from operations

6

1,562

1,037

2,674

Income taxes (paid)/refunded

(8)

48

(238)

Interest paid

(26)

(30)

(57)

Net cash from operating activities

1,528

1,055

2,379

Investing activities

Purchase of property, plant and equipment

(454)

(313)

(410)

Acquisition of own shares

(20)

(18)

Purchase of software

(120)

(119)

(235)

Acquisition of businesses

(6)

(2,237)

41

Payment of deferred/contingent consideration

(476)

(92)

(337)

Transfer from/(to) solicitor re: acquisition

2,122

(2,122)

Net cash used in investing activities

(1,056)

(659)

(959)

Financing activities

Repayment of loans

(264)

(150)

(414)

Net movement in overdraft

(438)

(648)

Shares issued

39

192

79

Dividend payment

(168)

Net cash from financing activities

(225)

(396)

1,151

Increase in cash and cash equivalents

Cash and cash equivalents at beginning of period

247

269

269

Cash and cash equivalents at end of period

516

269


HML HOLDINGS PLC

NOTES TO THE ACCOUNTS

Six months ended 30 September 2018

1.         General Information

The interim unaudited financial information was approved by the board on 26 November 2018.

The results for the year ended 31 March 2018 have been audited whilst the results for the six months ended 30 September 2017 and 30 September 2018 are unaudited.  The financial information contained in this interim report does not constitute statutory accounts for the year ended 31 March 2018.  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 2019. IFRS 9 Financial Instruments and IFRS 15 Revenue from Contracts with Customers have been applied for the first time in preparing the interim financial information.  The Directors consider that the application of these standards has not had a material impact on the recognition and measurement of items in the interim financial information.

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 2018 is based on the effective rate of taxation of 19% which is estimated to apply for the year ending 31 March 2019.

4.

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

 

Unaudited

6 months to

30 September

2018

£’000

Unaudited

6 months to

30 September

2017

£’000

Audited

Year ended

31 March

2018

£’000

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

1,120

1,008

2,211

Finance costs

(26)

(30)

(57)

Operating profit before share based payment charges, amortisation and taxation

1,094

978

2,154

Share based payment charge

(18)

(15)

(30)

Amortisation of intangible assets

(320)

(280)

(660)

Profit before taxation

756

683

1,464

5.

Earnings per share

Unaudited

6 months to

30 September 2018

£’000

Unaudited

6 months to

30 September

2017

£’000

Audited

Year ended

31 March

2018

£’000

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

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

Add back:

 

 

 

 

Share based payment charge

18

15

30

Amortisation of intangible assets

320

280

660

Finance costs

26

30

57

 

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

980

878

1,909

Weighted average number of shares (000s)

For basic earnings per share

45,526

45,135

45,269

Effect of dilutive potential ordinary shares:

– share options

696

1,106

857

Fully diluted

46,222

46,241

46,126

Earnings per share

Basic

1.4p

1.2p

2.6p

Diluted

Adjusted earnings per share

1.3p

1.2p

2.5p

 

Basic

2.2p

1.9p

4.2p

Diluted

2.1p

1.9p

4.1p

6.

Notes to the cash flow statement

Cash generated from operations

Unaudited

6 months to

30 September 2018

£’000

Unaudited

6 months to

30 September

2017

£’000

Audited

Year ended

31 March

2018

£’000

Profit from operations

Adjustments for:

Share-based payment charge

18

15

30

Depreciation of plant and equipment

180

156

372

Amortisation of intangible assets

320

280

660

 

 

Loss on disposal of fixed assets

9

 

Operating cash flows before movements in working capital

1,300

1,164

2,592

 

Decrease/(increase) in trade and other receivables

705

248

(298)

(Decrease)/increase in trade and other payables

(443)

(375)

380

Cash generated from operations

1,562

1,037

2,674

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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