HMLH.L Regulatory News (HMLH)

20 June 2013

HML Holdings plc

("HML" or the "Company")

Preliminary Results for the Year Ended 31 March 2013

HML Holdings plc (AIM: HMLH), the property management services Group, announces preliminary results for the year ended 31 March 2013.

Financial and Operational Highlights:

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

Commenting on the results, Rob Plumb, Chief Executive of HML Holdings said: "HML has taken major steps forward this year. We have had a 76% improvement in after tax earnings as well as enjoying a record value of new management instructions. We also significantly extended the geographical reach of our service offering by acquiring The Guthrie Partnership in the North West of England. We are confident of our ability to grow earnings through market share growth and on-going improvements in our economies of scale.

"We have also been active through our membership of various trade associations in supporting measures to improve transparency and service levels in the leasehold sector. Adherence to a set of minimum standards would, we believe, establish a market place that would ensure the quality of service that leaseholders expect."

For further information:

HML HOLDINGS PLC

We are pleased to report a 37% increase in earnings before interest, share based payments, amortisation and tax to £1,063,000 (2012: £774,000). Revenues grew 21% to £12.8m (2012: £10.6m) with 10% arising from organic growth and 11% as a result of acquisitions. Profit after tax improved 76% to £637,000 (2012: £361,000).

Underpinning our organic growth in earnings was our most successful year in terms of new management instructions. While competition in the property services market remains strong, HML welcomes the degree to which its clients recognise the value of local and independent customer service. The proportion of new business arising from new build management instructions remains at a historically low level; however, we anticipate that the contribution from this sector will start to grow in the years to come. The number of residential properties under management increased by19% to approximately 40,000 units.

In February 2013, we announced the acquisition of The Guthrie Partnership, which represents a significant milestone in the geographical expansion of HML's services and we look forward to its impact on income in the current year. Based in Knutsford, Cheshire, The Guthrie Partnership is well positioned to serve clients in the areas west of Cheshire and south of Manchester. Both the client base, which is mostly owner occupiers, and the service culture of the business are entirely compatible with HML's. In keeping with our strategy of providing a local property management and accounting service, The Guthrie Partnership will continue to operate from their offices even after they have moved their records onto HML's platform. The integration of Scotts of Putney, acquired in November 2011, into HML has proceeded well during the course of the year and, even during this period of change, the business has contributed earnings in line with our expectations.

Over the past year, there has been a noticeable increase in awareness and press coverage of the challenges inherent in the residential leasehold market. Growing parliamentary concern regarding the short comings of a lack of regulation in the management and ownership of leaseholds indicates that there may well be legislation in this area of the market in the coming years. While much of this attention has arisen, we believe, from the conflict of interest which arises from the common ownership and management of leasehold properties, a practice which HML eschews, we have been active in the call for setting standards in our industry. Through our memberships of the Association of Residential Managing Agents, The British Property Federation and The Leasehold Knowledge Partnership, we have welcomed various initiatives to improve transparency and service standards within the leasehold sector. Adherence to a set of minimum professional standards in order to be able to operate a residential management service would, we believe, establish a market place that would ensure the quality of service that leaseholders deserve.

HML remains optimistic that its strategy of consolidation and organic growth will continue to improve our market share in the years to come. We will improve the effectiveness of our service offering through further process and systems enhancements and professional training for our staff. We would like to thank all of our employees for the significant effort that has gone into making this a particularly successful year.

HML HOLDINGS PLC

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

HML HOLDINGS PLC

CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS EQUITY

ATTRIBUTABLE TO THE EQUITY HOLDERS OF THE GROUP

HML HOLDINGS PLC

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

HML HOLDINGS PLC

CONSOLIDATED STATEMENT OF CASH FLOWS

HML HOLDINGS PLC

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), 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 and, 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 2013 or 31 March 2012.

The financial information for the year ended 31 March 2012 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 2013 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 19 June 2013.

1. PROFIT RECONCILIATION

The reconciliation set out below provides additional information to enable the reader to reconcile to the numbers discussed in the Chairman's and Chief Executive's report

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 24% (2012: 25%). 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 carried forward by HML Hathaways Limited. 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 (2012: £1,243,000). The unprovided deferred tax asset in respect of these losses is £249,000 (2012: £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 28 January 2013, the trade and assets of The Guthrie Partnership were purchased by HML Andertons Limited. The Guthrie Partnership was a property management business based in Knutsford near Manchester. The acquisition established HML as a significant property manager in the North-West of England.

The fair value of net assets acquired in the acquisition 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 acquired businesses and the synergies expected to be achieved from the integration of the acquired businesses into the Group's existing and projected business.

Net cashflow arising on the acquisition was £644,000 relating to the consideration paid.

The amounts recognised at the acquisition date in respect of fixed assets acquired in the business combination approximate to their fair value.

The contingent consideration of £152,000 is due within one year and is adjustable depending on the retention of clients. The range of potential payments of contingent consideration could vary from £0 to £152,000, however the more likely outcome would be to pay £152,000 in relation to the contingent consideration.

If the acquisition of The Guthrie Partnership had been completed on the first day of the financial year, group revenues for the period would have been increased by £610,000 and the group profit attributable to equity holders of the parent would have increased by £62,000.

The business of The Guthrie Partnership contributed £83,000 to the Group's revenue and reduced the Group's profit before tax for the period by £3,000 from the date of acquisition to the year end date.