12 Nov 2009 07:00
HML HOLDINGS Plc
("HML" or "the Group")
INTERIM RESULTS
HML Holdings plc (AIM: HMLH.L), the property management service group, today announces its interim results for the six months to 30 September 2009.
Highlights for the six month period:
Underlying 12% (2008: 6%) growth in core management fees
Net cash from operating activities increased to £451,000 (2008: £2,000)
Insurance revenues grew to £404,000 (2008: £375,000)
Commenting on the results, Robert Plumb, Chief Executive of HML Holdings Plc, said:
"It is very pleasing to again report a growth in both revenue and base management fees, with core management revenues having grown at a rate of four times that of our operating expenses. With improving market conditions, a growing client base, and a resilient business model in place, the Board looks to the future with optimism."
For further information:
| HML Holdings Plc Robert Plumb, Chief Executive James Howgego, Financial Director | Tel: 020 8439 8529 |
| Tavistock Communications Limited John West Paul Young | Tel: 020 7920 3150 |
| FinnCap Marc Young Tom Jenkins | Tel: 020 7600 1658 |
CHAIRMAN AND CHIEF EXECUTIVE'S REPORT
We are pleased to report a positive first half of the year, with revenues growing to £4,422,000, representing a 2% (£76,000) increase over the period. This growth was underpinned by a 12% or £262,000 increase in recurring management fees. The net revenue growth of only 2% highlights the degree to which some of our other income has been impacted by market conditions. The most significant reduction in supporting income is as a result of a marked decrease in treasury management fees which is a direct consequence of the low interest rate environment.
It is however, pleasing to report that surveying fees have stabilised and insurance income has continued to improve. Other contributors to ancillary income are more reliant on property transactions and therefore impacted by the economic slowdown. Notably, sales of legal and accounting information packs are lower than the equivalent period last year and have been affected by the very low transactional levels in the residential property market.
Although profit before interest, share based payment charges, amortisation and taxation has decreased to £151,000 (2008: £204,000), we are pleased to be able to report that core management revenues have grown at a rate of four times that of our operating expenses. We believe this is a creditable reflection of the positive reaction our staff have had to a challenging operating environment. Net cash from operating activities has grown to £451,000 (2008: £2,000).
The Group remains active in terms of new management business tenders and has continued to grow organically. The well published deterioration in new build residential development has had a major negative effect on market growth. Offsetting this for the HML group is the effect of an increasingly demanding, knowledgeable and selective residential customer. The Board believes that new business opportunities will continue to grow as service becomes increasingly a differentiating factor.
The absence of transactional activity in the broader property services sector inevitably creates some downward pressure on management fees in some areas of the market. Organisations which formerly focused on residential or commercial property sales have, to some extent, turned their attentions to the more resilient management sector. However the barriers to entry, particularly in the block management area, continue to grow in this increasingly regulated and automated sector. The degree to which consistency, quality and scale aid service delivery provides HML with growing confidence in its business model. It is our belief that HML is well placed to capitalise upon improving market conditions and the Board looks forward with continued optimism.
| Richard Smith | Robert Plumb |
| Chairman | Chief Executive |
| 11 November 2009 |
HML HOLDINGS Plc
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Six months ended 30 September 2009
| Continuing operations | Notes | Unaudited | Unaudited | Audited |
| 6 months to | 6 months to | Year ended | ||
| 30 September | 30 September | 31 March | ||
| 2009 | 2008 | 2009 | ||
| £'000 | £'000 | £'000 | ||
| Revenue | 4,422 | 4,346 | 8,646 | |
| Direct operating expenses | (3,894) | (3,742) | (7,722) | |
| Central operating overheads | (377) | (400) | (773) | |
| Share based payment charge | (9) | (29) | (58) | |
| Amortisation of intangible assets | (80) | (73) | (155) | |
| Exceptional item - impairment | - | - | (1,172) | |
| Total operating expenses | (4,360) | (4,244) | (9,880) | |
| Operating Profit/(loss) | 62 | 102 | (1,234) | |
| Finance costs | (7) | (2) | (13) | |
| Profit/(loss) before Taxation | 55 | 100 | (1,247) | |
| Taxation | - | (17) | 75 | |
| Profit/(loss) for the period attributable to equity holders of the parent | 55 | 83 | (1,172) | |
| Other comprehensive income | - | - | - | |
| Total comprehensive income/(loss) for the period attributable to equity holders of the parent | 55 | 83 | (1,172) | |
| Earnings/(loss) per share (in pence) | ||||
| Basic | 4 | 0.2 | 0.3 | (3.7) |
| Diluted | 4 | 0.2 | 0.3 | (3.7) |
Profit before interest, exceptional items, share based payments charges, amortisation and taxation reconciliation
| Unaudited | Unaudited | Audited | ||
| 6 months to | 6 months to | Year ended | ||
| 30 September | 30 September | 31 March | ||
| 2009 | 2008 | 2009 | ||
| £'000 | £'000 | £'000 | ||
| Operating profit before interest, exceptional items, share based payment charges, amortisation and taxation | 151 | 204 | 151 | |
| Finance costs | (7) | (2) | (13) | |
| Operating profit before exceptional item, share based payment charges, amortisation and taxation | 144 | 202 | 138 | |
| Share based payment charge |
| (9) | (29) | (58) |
| Amortisation of intangible assets | (80) | (73) | (155) | |
| Exceptional item - impairment | - | - | (1,172) | |
| Profit/(loss) before taxation | 55 | 100 | (1,247) |
HML HOLDINGS Plc
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Six months ended 30 September 2009
| Unaudited | Unaudited | Audited | ||
| 30 September | 30 September | 31 March | ||
| 2009 | 2008 | 2009 | ||
| Notes | £'000 | £'000 | £'000 | |
| ASSETS | ||||
| Non Current Assets | ||||
| Goodwill | 3,286 | 4,212 | 3,264 | |
| Other intangible assets | 2,612 | 2,625 | 2,664 | |
| Property, plant and equipment | 274 | 338 | 322 | |
| Deferred tax asset | 72 | - | 72 | |
| 6,244 | 7,175 | 6,322 | ||
| Current Assets | ||||
| Trade and other receivables | 1,085 | 1,327 | 1,082 | |
| 1,085 | 1,327 | 1,082 | ||
| TOTAL ASSETS | 7,329 | 8,502 | 7,404 | |
| LIABILITIES | ||||
| Current Liabilities | ||||
| Trade and other payables | (1,747) | (1,209) | (1,517) | |
| Borrowings | (172) | (497) | (405) | |
| Current tax liabilities | (19) | (69) | (69) | |
| (1,938) | (1,775) | (1,991) | ||
| Non-Current Liabilities | ||||
| Deferred tax | (182) | (174) | (182) | |
| Borrowings | - | (171) | (86) | |
| (182) | (345) | (268) | ||
| TOTAL LIABILITIES | (2,120) | (2,120) | (2,259) | |
| NET ASSETS | 5,209 | 6,382 | 5,145 |
| EQUITY | ||||
| Share capital | 473 | 473 | 473 | |
| Share premium | 6,331 | 6,331 | 6,331 | |
| Other reserves | (11) | - | (11) | |
| Merger reserve | (15) | (15) | (15) | |
| Retained earnings | (1,569) | (407) | (1,633) | |
| TOTAL EQUITY | 5,209 | 6,382 | 5,145 |
HML HOLDINGS Plc
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Six months ended 30 September 2009
| Share | Share | Other | Merger | Retained | Total | |
| capital | premium | reserve | reserve | earnings | equity | |
| £'000s | £'000s | £'000s | £'000s | £'000s | £'000s | |
| Balance at 1 April 2008 | 473 | 6,331 | - | (15) | (519) | 6,270 |
| Total comprehensive income for the period | - | - | - | - | 83 | 83 |
| Share based payment charge | - | - | - | - | 29 | 29 |
| Own shares bought | - | - | - | - | - | - |
| Balance at 30 September 2008 | 473 | 6,331 | - | (15) | (407) | 6,382 |
| Total comprehensive loss for the period | - | - | - | - | (1,255) | (1,255) |
| Share based payment charge | - | - | - | - | 29 | 29 |
| Own shares bought | - | - | (11) | - | - | (11) |
| Balance at 31 March 2009 | 473 | 6,331 | (11) | (15) | (1,633) | 5,145 |
| Total comprehensive income for the period | - | - | - | - | 55 | 55 |
| Share based payment charge | - | - | - | - | 9 | 9 |
| Balance at 30 September 2009 | 473 | 6,331 | (11) | (15) | (1,569) | 5,209 |
HML HOLDINGS Plc
CONSOLIDATED STATEMENT OF CASH FLOWS
Six months ended 30 September 2009
| Unaudited | Unaudited | Audited | ||
| 6 months to | 6 months to | Year ended | ||
| 30 September | 30 September | 31 March | ||
| 2009 | 2008 | 2009 | ||
| Notes | £'000 | £'000 | £'000 | |
| Operating activities | ||||
| Cash generated from operations | 5 | 451 | 2 | 629 |
| Income taxes paid | (50) | (11) | (8) | |
| Interest paid | (7) | (2) | (13) | |
| Net cash from/used in operating activities | 394 | (11) | 608 | |
| Investing activities | ||||
| Purchases of property, plant and equipment | (16) | (95) | (152) | |
| Purchase of software | (28) | (302) | (473) | |
| Acquisition of businesses | (31) | (515) | (729) | |
| Net cash used in investing activities | (75) | (912) | (1,354) | |
| Financing activities | ||||
| Cash receipts of long term loan | - | 300 | 300 | |
| Cash payments relating to in long term loan | (86) | - | (43) | |
| Net cash from financing activities | (86) | 300 | 257 | |
| Increase/(decrease) in cash and cash equivalents | 233 | (623) | (489) | |
| Cash and cash equivalents at the start of period | (234) | 255 | 255 | |
| Cash and cash equivalents at the end of the period | (1) | (368) | (234) |
HML HOLDINGS Plc
NOTES TO THE ACCOUNTS
1. General Information
The interim unaudited financial information was approved by the board on 11November 2009.
The results for the year ended 31 March 2009 have been audited whilst the results for the six months ended 30 September 2008 and 30 September 2009 are unaudited. The financial information contained in this interim report does not constitute statutory accounts for that period. The statutory accounts for the previous year, which were prepared under IFRS, have been delivered to the Registrar of Companies. The auditors' opinion on those accounts was unqualified and did not contain a statement under section 237 (2) or (3) of the Companies Act 1985.
Copies of the interim report are available from www.hmlholdings.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 International Financial Reporting Standards ('IFRS') as adopted by the European Union applied in accordance with the provisions of the Companies Act 2006.
Except as described below, the accounting policies applied are consistent with those of the audited annual financial statements for the year ended 31 March 2009.
The presentation of the primary financial statements has been modified in order to comply with IAS 1 (revised). However the revised standard has no impact on the reported results or financial position of the group.
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 2009 is based on the effective rate of taxation which is estimated to apply for the year ending 31 March 2010.
| 4. | Earnings per share | Unaudited | Unaudited | Audited |
| 6 months to | 6 months to | Year ended | ||
| 30 September | 30 September | 31 March | ||
| 2009 | 2008 | 2009 | ||
| Profits/(losses) for basic and diluted earnings per share (£'000) | ||||
| Profit/(loss) for the period | 55 | 83 | (1,172) | |
| Weighted average number of shares (000s) | ||||
| For basic earnings per share | 31,544 | 31,544 | 31,544 | |
| Effect of dilutive potential ordinary shares: | ||||
| - convertible loan notes | - | - | - | |
| - share options | 14 | - | - | |
| Fully diluted | 31,558 | 31,544 | 31,544 | |
| Earnings/(loss) per share | ||||
| Basic | 0.2p | 0.3p | (3.7p) | |
| Diluted | 0.2p | 0.3p | (3.7p) |
| 5. | Notes to the cash flow statement | Unaudited | Unaudited | Audited |
| 6 months to | 6 months to | Year ended | ||
| 30 September | 30 September | 31 March | ||
| 2009 | 2008 | 2009 | ||
| £'000 | £'000 | £'000 | ||
| Cash generated from operations | ||||
| Operating profit | 62 | 102 | (1,234) | |
| Share-based payment charge | 9 | 29 | 58 | |
| Depreciation of plant and equipment | 64 | 58 | 129 | |
| Amortisation of intangible assets | 80 | 73 | 155 | |
| Impairment of goodwill | - | - | 1,172 | |
| Loss on disposal of fixed assets | - | - | 2 | |
| (Increase)/decrease in trade and other receivables | (3) | (138) | 107 | |
| Increase/(decrease) in trade and other payables | 239 | (122) | 240 | |
| Cash generated from operations | 451 | 2 | 629 | |