HMLH.L Regulatory News (HMLH)

HML Holdings plc

("HML", the "Company" or the "Group") Final Results for the Year Ended 31 March 2016

HML Holdings plc (AIM: HMLH), the property management services Group, announces final results for the year ended 31 March 2016.

Financial and Operational Highlights:

*before interest, share based payment charges, amortisation and tax (see note 1)

**before interest, share based payment charges, depreciation, amortisation and tax

Commenting on the results, Rob Plumb, Chief Executive of HML Holdings said: "We have made excellent progress this year significantly increasing the number of properties under management while investing in our systems and compliance infrastructure. As a result, we now provide an even higher quality of service that will further differentiate HML from its peer group and reinforce our ability to continue to grow.

As part of our commitment to accelerating the growth of the group, in the second half of the year we invested in dedicated new business teams which have already delivered more than £600,000 of annualised new management contracts, underlining our ability to grow organically as well as through acquisitions."

For further information:

REVIEW OF BUSINESS

We are pleased to report an 8% growth in annual revenues as properties under management increased to 60,000 (51,000 in 2015) at the year end.

HML's earnings before interest, share based payments, amortisation and tax, increased 6% to £1,624,000 (£1,535,000 in 2015), which reflect our achievements following a year of continuous growth during which we have passed a number of significant milestones in building the business's infrastructure.

The Group has increased its network of property management offices and now operates from 15 locations across the UK. Two of these offices were established as a result of our acquisition of Castle Wildish in Walton on Thames and Managed Living Partnership in Bermondsey. These newly acquired businesses have significantly improved our service coverage in their respective geographical areas and contributed a quarter of our £1,300,000 revenue growth.

Alexander Bonhill, the Group's insurance broking arm, has again delivered very positive growth with premiums written rising to over £7,500,000, equivalent to a 13% growth in revenue to £2,100,000 (£1,900,000: 2015). As we reported at the half year, we incurred exceptional restructuring costs in our professional surveying division during the first half of the year. Some of the benefits of that restructuring came through in the second half with revenue from this division growing to £900,000 for the full year, representing an overall 12% increase on the previous year.

The Group continued to invest in the systems and compliance infrastructure necessary to support our commitment to our industry association's (ARMA) recently enhanced service standards. While that has, in the short term, impacted on operating costs, it has assisted us in preparing for an increasing demand for transparency and compliance with the association's code of conduct. As we have reported on a number of occasions, although these measures commit us to a more costly provision of service, they represent an investment in our future and will further differentiate us within the sector as a provider of quality professional services. During the course of the year, we also launched our Customer Access Portal (CAP), which enables lessees and clients to view specific property management information online. The provision of this facility by managing agents has, in keeping with many service providers, increasingly become a prerequisite for the major players. Having the CAP has been particularly important for us when competing in the larger blocks market and it represents an investment that will ensure better service provision and client retention in the longer term.

We also referred in our half year report to the creation of additional dedicated new business teams. This exercise was completed in the second half of the year and has positioned us well for organic growth in both the new build and existing build markets. The new business teams, despite having been in operation for only part of the year have nevertheless contributed to more than £600,000 in annualised new management contracts, with more than a third of this coming from new build developments. While we remain confident of a growing order book for new build, we, like so many in this market, observe the slow and unpredictable rate at which the developments are completed. We continue to focus on the owner occupied segments of both the new build and existing build sides of the market, which enhances the opportunity for us to provide a full range of services. This approach has, however, directed our attention to a wider geographical coverage of smaller estates outside of the major city centres.

In common with many in the service sector, we have had to rise to the challenges of a more competitive employment market. The group continues to invest in the provision of training and support for our employees in their professional accreditation. This too represents an investment in our future and enhances our ability to improve staff retention. We have also developed further the rationalisation of our service delivery with additional specialisation and, in many cases, centralisation of specific elements of the service. We consistently strive to provide a local and personal property management service, which means continuing to free our property managers from the burden of the administrative functions that limit their ability to be client facing.

We are pleased therefore, to report growth in earnings and revenues while having achieved a number of important investment milestones. We are again thankful for the enthusiasm and hard work that our employees have contributed during the course of the year.

HML HOLDINGS PLC

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

For the year ended 31 March 2016

HML HOLDINGS PLC

CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS EQUITY

For the year ended 31 March 2016

ATTRIBUTABLE TO THE EQUITY HOLDERS OF THE GROUP

HML HOLDINGS PLC

CONSOLIDATED STATEMENT OF CASH FLOWS

For the year ended 31 March 2016 COMPANY NUMBER: 5728008

HML HOLDINGS PLC

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

GENERAL INFORMATION

Whilst the financial information included in this preliminary announcement has been prepared in accordance with the recognition and measurement criteria of International Financial Reporting Standards (IFRSs) as adopted by the European Union, this announcement does not itself contain sufficient information to comply with IFRSs.

The financial information is presented in pounds sterling, prepared on a historical cost basis, except for the revaluation of contingent considerations, unless otherwise stated, rounded to the nearest thousand. The financial information set out in this announcement does not comprise the Group's statutory accounts for the years ended 31 March 2016 or 31 March  2015.

The financial information for the year ended 31 March 2015 is derived from the statutory accounts for that year which have been delivered to the Registrar of Companies. The auditors reported on those accounts; their report was unqualified and did not contain a statement under either Section 498 (2) or Section 498 (3) of the Companies Act 2006 and did not include references to any matters to which the auditor drew attention by way of emphasis.

The statutory accounts for the year ended 31 March 2016 have not yet been delivered to the Registrar of Companies, nor have the auditors yet reported on them. This preliminary announcement does not constitute statutory accounts under section 435 of the Companies Act 2006.

HML Holdings plc and its subsidiaries specifically focus on residential property management. The Group operates in the UK. The Company is a public limited company incorporated and domiciled in the United Kingdom. The address of its registered office is 9-11 The Quadrant, Richmond, Surrey, TW9 1BP. The Company is listed on the AIM stock exchange.

The preliminary results were authorised for issue by the board of directors on 27 June 2016.

1. PROFIT RECONCILIATION

The reconciliation set out below provides additional information to enable the reader to reconcile to the numbers discussed in the Review of the Business.

Direct operating expenses and central operating overheads include depreciation and staff costs.

Set out below is an analysis of other operating expenses;

Amounts payable to the auditor and its related entities in respect of both audit and non-audit services are set out below:

The tax assessed for the period is lower than the standard rate of corporation tax in the UK of 20% (2015: 21%). The differences are explained below:

Future tax charges may be affected by the fact that no deferred tax asset is recognised in respect of losses. Deferred tax assets are not recognised until the utilisation of the losses is probable.

The Group has losses carried forward in its subsidiary, HML Hathaways Limited which can be recovered against future profits arising from the same trade. The total tax losses carried forward to future years are £1,243,000 (2015: £1,243,000). The unprovided deferred tax asset in respect of these losses is £249,000 (2015: £249,000).

4. EARNINGS PER SHARE

The calculation of the basic and diluted earnings per share is based on the following data

The diluted earnings per share are the basic earnings per share adjusted for the dilutive effect of the conversion into fully paid shares of the outstanding share options.

On 31 July 2015, HML Andertons Ltd purchased the trade and assets of Clearwater, a business based in Bolton. The acquisition reinforces HML Andertons Ltd position as the leading property manager in the area and gives the Group an office in Bolton.

The fair value of the net assets acquired are set out below:

The residual difference between the total consideration paid and the net value of the recognised assets acquired has been capitalised as goodwill. The goodwill recognised on the acquisition is mainly attributable to the skills and knowledge within the business.

On 28 September 2015, HML Shaw Ltd purchased the trade and assets of Castle Wildish, a property management business based in Walton on Thames. The acquisition has reinforced HML Shaw Ltd's position as one of the leading property managers in the area.

The fair value of net assets acquired is set out below:

The residual difference between the total consideration paid and the net value of the recognised assets acquired has been capitalised as goodwill. The goodwill recognised on the acquisition is mainly attributable to the skills and knowledge within the business.

On 8 January 2016, HML Hawksworth Ltd purchased 100% of the share capital of Managed Living Partnership Limited (MLPL). The acquisition gives HML Hawksworth Limited a stronger presence in South East London and an office in that area.

The fair value of net assets acquired are set out below:

The residual difference between the total consideration paid and the net value of the recognised assets acquired has been capitalised as goodwill. The goodwill recognised on the acquisition is mainly attributable to the skills and knowledge within the business.

The Directors have proposed paying a dividend of 0.33p per share in relation to the current year (2015: 0.30p per share).

Subject to shareholder approval at the Annual General Meeting, the final dividend will be paid on 17 October 2016 to qualifying shareholders on the Register at the close of business on 4 October 2016. The ordinary shares ex-dividend date is 3 October 2016.