TIDMHMLH
RNS Number : 1035G
HML Holdings PLC
26 June 2012
26 June 2012
HML Holdings plc
("HML" or the "Company")
Preliminary Results for the Year Ended 31 March 2012
HML Holdings plc (AIM: HMLH), the property management services
Group, announces preliminary results for the year ended 31 March
2012.
Financial and Operational Highlights:
-- Operating profit* up 52% to GBP774,000 (2011: GBP509,000)
-- 33,500 property units under management (2011: 30,000
units)
-- Revenues up 13% to GBP10.6 m (7% up excluding acquisitions)
-- Acquisition of Scotts of Putney
-- Cash generated from operations totalled GBP1 m
-- Earnings per share 1.1p (2011: 0.7p)
*before interest, share based payment charges, amortisation and
tax
Commenting on the results, Rob Plumb, Chief Executive of HML
Holdings said: "The group has made significant progress in revenues
and earnings growth, helped by the resilience of the Residential
Property Management sector and our ability to add income by
cross-selling services from our insurance broking and ancillary
service subsidiaries.
"We have also taken major steps towards establishing operating
scale through strong organic growth and the completion of our
largest acquisition to date, leading us to be confident in our
ability to grow the business despite tough macroeconomic
headwinds."
For further information:
HML Holdings PLC: 020 8439 8529
Robert Plumb, Chief Executive
James Howgego, Financial Director
Tavistock Communications Group: 020 7920 3150
James Verstringhe, Jeremy Carey
Finncap 020 7220 0500
Ed Frisby / Christopher Raggett, Corporate
Finance
Simon Starr, Corporate Broking
HML HOLDINGS PLC
CHAIRMAN'S AND CHIEF EXECUTIVE'S REPORT
The HML group are pleased to report a 52% increase in earnings
before interest, share based payment charges, amortisation,
exceptional items and tax to GBP774,000 (2011 GBP509,000).
Revenues increased to GBP10.6m (2011 GBP9.4m) and units under
management grew over 3,500 to 33,500. Revenues from Scotts, the
acquisition made in November 2011 contributed 6% to the overall 13%
growth in revenues.
The underlying improvement in operating margin has been further
enhanced this year as our businesses continue to establish
operating scale. There were notably strong performances from our
insurance broking and surveying subsidiaries. While, in common with
many service providers, we are experiencing a very competitive
market, we continue to improve referrals to our professional
divisions where group efficiency and purchasing power provide
significant competitive advantages. We have also experienced steady
improvements in fees arising from ancillary accounting services
including information packs for flat sales as well as debt recovery
administration.
We were very pleased to add the residential property management
of Scotts of Putney to the HML Group in November last year. Scotts
have built up a reputation for service quality in South West London
since their inception in 1976. The business continues to manage its
clients' properties from its offices in Putney where it is well
placed to do so. We have however begun the process of integrating
Scotts' systems and processes into the HML Group. We remain
confident that the group service provision and operating
efficiencies we anticipated at the time of this acquisition, will
continue to be fulfilled.
The resilience of Residential Property Management services and
block management in particular, makes it an attractive sector of
the property service industry. Inevitably new entrants to the
market create downward pressure on margins especially as the UK's
economic environment exerts its own pressures on consumers'
disposable income. Although the trade-off between quality and price
presents itself more visibly in a relatively unregulated market
such as ours, HML continues to seek and retain discerning clients
who value a comprehensive and professional service. Similarly the
group has continued to build relationships with new build
developers who increasingly require an independent and professional
management service. To some extent the degree to which HML offices
are located in the South East of England and our relatively close
proximity to the buildings we manage, are assisting us in the
acquisition of new business.
HML remains confident in its strategy of organic market share
and new build growth which will continue to be supplemented by
business and portfolio acquisitions. On behalf of the board we
would express our appreciation to all of our staff who have worked
so enthusiastically in these challenging economic times.
Richard Smith (Chairman) Robert Plumb (Chief Executive)
HML HOLDINGS PLC
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 31 March 2012
Notes 2012 2011
GBP'000 GBP'000
Total Total
CONTINUING OPERATIONS
REVENUE 10,600 9,391
---------- ----------
Direct operating expenses (8,932) (8,056)
Central operating overheads (894) (826)
Share based payment charge (10) (6)
Amortisation of intangibles (210) (182)
Exceptional item 2 (82) -
Total central operating overheads (1,196) (1,014)
Operating expenses 3 (10,128) (9,070)
PROFIT FROM OPERATIONS 472 321
---------- ----------
Finance costs (16) (7)
---------- ----------
PROFIT BEFORE TAXATION 1 456 314
Income tax charge 4 (95) (81)
---------- ----------
PROFIT FOR THE YEAR ATTRIBUTABLE
TO THE EQUITY HOLDERS OF THE
COMPANY 361 233
---------- ----------
Other comprehensive income - -
---------- ----------
TOTAL COMPREHENSIVE INCOME
FOR THE YEAR ATTRIBUTABLE TO
THE EQUITY HOLDERS OF THE PARENT 361 233
========== ==========
EARNINGS PER SHARE
Basic 5 1.1p 0.7p
---------- ----------
Diluted 5 1.1p 0.7p
---------- ----------
HML HOLDINGS PLC
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS EQUITY
For the year ended 31 March 2012
ATTRIBUTABLE TO THE EQUITY HOLDERS OF THE GROUP
Share Share Other Merger Retained Total
capital premium reserve reserve earnings equity
GBP'000s GBP'000s GBP'000s GBP'000s GBP'000s GBP'000s
Balance at 1 April 2010 473 6,331 (11) (15) (1,505) 5,273
---------- ---------- ---------- ---------- ---------- ----------
Profit for the year - - - - 233 233
Other comprehensive income - - - - - -
Share based payment charge - - - - 6 6
---------- ---------- ---------- ---------- ---------- ----------
Balance at 31 March 2011 473 6,331 (11) (15) (1,266) 5,512
---------- ---------- ---------- ---------- ---------- ----------
Profit for the year - - - - 361 361
Other comprehensive income - - - - - -
Share based payment charge - - - - 10 10
Share capital issued 70 412 - - - 482
HML shares purchased by
EBT - - (5) - - (5)
----- ------- ------ ------ ------- -------
Balance at 31 March 2012 543 6,743 (16) (15) (895) 6,360
----- ------- ------ ------ ------- -------
HML HOLDINGS PLC
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
31 March 2012
COMPANY NUMBER: 5728008
2012 2011
ASSETS Notes GBP'000 GBP'000
NON CURRENT ASSETS
Goodwill 4,329 3,360
Other intangible assets 3,449 2,530
Property, plant and equipment 273 263
---------- ----------
8,051 6,153
---------- ----------
CURRENT ASSETS
Trade and other receivables 1,413 1,425
Cash at bank 502 -
1,915 1,425
---------- ----------
TOTAL ASSETS 9,966 7,578
---------- ----------
LIABILITIES
CURRENT LIABILITIES
Trade and other payables 2,004 1,692
Borrowings 345 115
Current tax liabilities 122 77
---------- ----------
2,471 1,884
---------- ----------
NON CURRENT LIABILITIES
Deferred tax liability 357 182
Borrowings 604 -
Deferred consideration 174 -
1,135 182
---------- ----------
TOTAL LIABILITIES 3,606 2,066
---------- ----------
NET ASSETS 6,360 5,512
========== ==========
EQUITY
Called up share capital 7 543 473
Share premium account 7 6,743 6,331
Other reserve (16) (11)
Merger reserve (15) (15)
Retained earnings (895) (1,266)
ATTRIBUTABLE TO THE EQUITY HOLDERS OF
THE PARENT 6,360 5,512
========== ==========
HML HOLDINGS PLC
CONSOLIDATED STATEMENT OF CASH FLOWS
31 March 2012
COMPANY NUMBER: 5728008
Notes 2012 2011
GBP'000 GBP'000
OPERATING ACTIVITIES
Cash generated from operations 8 1,055 568
Income taxes paid (50) -
Interest paid (16) (7)
---------- ----------
NET CASH FROM OPERATING ACTIVITIES 989 561
---------- ----------
INVESTING ACTIVITIES
Purchases of property, plant and equipment (118) (178)
Purchase of own shares (5) -
Purchase of software (79) (145)
Payments to purchase businesses (1,401) (182)
NET CASH USED IN INVESTING ACTIVITIES (1,603) (505)
---------- ----------
FINANCING ACTIVITIES
Increase/(decrease) in long term loan 949 (86)
Equity fund raising 282 -
NET CASH FROM/(USED) IN FINANCING ACTIVITIES 1,231 (86)
---------- ----------
NET INCREASE/(DECREASE) IN CASH AND CASH
EQUIVALENTS 617 (30)
CASH AND CASH EQUIVALENTS AT BEGINNING
OF YEAR (115) (85)
CASH AND CASH EQUIVALENTS AT END OF YEAR 502 (115)
---------- ----------
HML HOLDINGS PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
General information
The financial information has been prepared using the
recognition and measurement principles of IFRS.
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 2012 or 31 March 2011.
The financial information for the year ended 31 March 2011 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 2012 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 25 June 2012.
Consolidated financial statements
The consolidated and parent company financial statements have
been prepared in accordance with International Financial Reporting
Standards as adopted by the European Union ("IFRS") and the
Companies Act 2006 as applicable to companies reporting under
IFRS.
The financial statements have been prepared on the historical
cost basis apart from intangible assets acquired as part of a
business combination. The principal accounting policies adopted are
set out below. The preparation of the financial statements require
the use of estimates and assumptions that affect the reported
amount of assets and liabilities at the balance sheet date and the
reported amounts of revenues and expenses during the reporting
period. Although these estimates are based on management's best
knowledge of the amount, events or actions, actual results may
differ from those estimates.
The Company has taken advantage of section 408 of the Companies
Act 2006 not to present its own income statement.
Basis of consolidation and business combinations
The consolidated financial statements incorporate the financial
statements of the Company and enterprises controlled by the Company
(its subsidiaries) made up to 31 March each year. Subsidiaries are
all entities over which the company has the power to govern the
financial and operating policies as to benefit from its activities.
The excess of costs of acquisition over the fair values of the
Group's share of identifiable net assets acquired is recognised as
goodwill. Any deficiency of the cost of acquisition below the fair
value of identifiable net assets acquired (i.e. discount on
acquisition) is recognised directly in profit or loss.
The consolidated financial statements include the financial
statements of HML Holdings plc and its subsidiaries as if they had
always so been owned. Accordingly, the whole of the results,
assets, liabilities and shareholders' funds of the acquired
companies are consolidated, regardless of the actual transaction
date, and corresponding figures for the previous years are
re-stated under merger accounting.
The purchase method of accounting is used to account for the
acquisition of other subsidiaries by the Group. The cost of an
acquisition is measured as the fair value of the assets given and
liabilities incurred or assumed at the date of exchange.
Identifiable assets acquired and liabilities and contingent
liabilities assumed in a business combination are initially
measured at fair value at the acquisition date (irrespective of the
extent of any minority interest).
The results of subsidiaries acquired or disposed of during the
period are included in the consolidated income statement from the
effective date of acquisition or up to the effective date of
disposal, as appropriate. Where necessary, adjustments are made to
the financial statements of subsidiaries to bring the accounting
policies used into line with those used by other members of the
Group.
All intra-group transactions, balances and unrealised gains on
transactions between group companies are eliminated on
consolidation. Unrealised losses are also eliminated unless the
transaction provides evidence of an impairment of the asset
transferred.
Standards and Interpretations not yet effective
IAS 1, IFRS 8, IFRS 3 and IAS 27 have been adopted during the
year.
At the date of authorisation of these financial statements, the
following standards and Interpretations that have not been applied
in these financial statements were in issue but not yet effective
or endorsed (unless otherwise stated):
Standard Amendment Effective Adopted by Impact
Date EU
IFRS 7 Financial Instruments: 1 July 2013 Not yet Disclosure only
(Amended) Disclosure
------------------------ ------------- ------------ ----------------------
IFRS 9 Financial Instruments 1 January Not yet Classification
2015 of financial assets
and liabilities
------------------------ ------------- ------------ ----------------------
IFRS 10 Consolidated 1 January Not yet Provides a single
Financial Statements 2013 consolidation
model with control
being the basis
for consolidation
------------------------ ------------- ------------ ----------------------
IAS 12 Deferred Tax 1 January Not yet Disclosure only
2012
------------------------ ------------- ------------ ----------------------
IFRS 13 Fair Value Measurement 1 January Not yet Defines fair value
2013 and sets out a
single framework
for measuring
fair value.
------------------------ ------------- ------------ ----------------------
IAS 1 Other comprehensive 1 July 2012 Yes Disclosure only
Amended income
------------------------ ------------- ------------ ----------------------
The Directors anticipate that the adoption of these Standards
and Interpretations in future periods will
have no material impact on the financial statements of the
Group.
REVENUE RECOGNITION
Revenue represents fees receivable from the provision of a range
of property, insurance and surveying services to the residential
property sector.
All revenue is measured as the fair value of the consideration
received or receivable and represents amounts receivable for
services provided in the normal course of business, net of
discounts, VAT and other sales related taxes.
Revenue in property management and services companies is
recognised in the period in which the services are provided.
Revenue relating to chartered surveying services is recognised
when the services are provided. If services have been provided and
not invoiced, the revenue is accrued.
Insurance commissions are recognised at start of the policy to
which the commission relates.
SHARE BASED PAYMENTS
The group has applied the requirements of IFRS 2 Share based
payments. IFRS 2 requires the recognition of a charge for share
based payment transactions which include for example share options
or restricted shares granted to employees that require a certain
length of service before vesting. These are reassessed on an anuual
basis. The fair value of the options granted is measured on the
date at which they are granted by using the Black Scholes option
pricing model and is expensed to the income statement over the
appropriate vesting period.
PURCHASED GOODWILL
Goodwill arising on acquisition and consolidation represents the
excess of the costs of acquisition over the Group's interest in the
fair value of the identifiable assets and liabilities of a business
at the date of acquisition.
Following initial recognition, goodwill is measured at cost less
any accumulated impairment losses. For the purpose of impairment
testing, goodwill is allocated to the group's cash-generating units
that are expected to benefit from the synergies of the
combination.
Goodwill is reviewed for impairment annually or more frequently
if there is an indication of impairment. Impairment for goodwill is
determined by assessing the recoverable amount of the
cash-generation unit to which the goodwill relates. Where the
recoverable amount of the cash-generating unit is less than the
carrying value of the cash-generating unit to which goodwill has
been allocated, an impairment loss is recognised. Impairment losses
on goodwill cannot be reversed in future periods.
OTHER INTANGIBLE ASSETS
Intangible assets acquired separately are measured on initial
recognition at cost. An intangible asset acquired as part of a
business combination is recognised separately from goodwill if the
asset is separable or arises from contractual or other legal rights
and its fair value can be measured reliably. Following initial
recognition, intangible assets are carried at cost less any
accumulated amortisation and any accumulated impairment losses.
Internally generated intangible assets, excluding capitalised
development costs, are not capitalised and expenditure is reflected
in profit or loss in the year in which the expenditure is
incurred.
Intangible assets are amortised over their useful life and
assessed for impairment whenever there is an indication of
impairment. The amortisation period and the amortisation method for
intangible assets are reviewed at least at each financial year end.
The amortisation expense on intangible assets is recognised in the
profit and loss in the expense category consistent with the
function of the intangible asset.
Amortisation is provided on straight line basis on intangible
assets as follows:
Customer Relationships 25 years
Software 8 years
PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment are stated at historical cost.
Depreciation is provided on all property, plant and equipment at
rates calculated to write each asset down to its estimated residual
value evenly over its expected useful life, as follows:-
Property, plant and equipment between 4 and 6 years.
Impairment of property, plant and equipment and intangible
assets excluding goodwill
At each balance sheet date, the Group reviews the carrying
amounts of its property, plant and equipment and intangible assets
to determine whether there is any indication that those assets have
suffered an impairment loss. If any such indication exists, the
recoverable amount of the asset is estimated in order to determine
the extent of the impairment loss (if any). Where the asset does
not generate cash flows that are independent from other assets, the
Group estimates the recoverable amount of the cash-generating unit
to which the asset belongs.
If the recoverable amount of an asset (or cash-generating unit)
is estimated to be less than its carrying amount, the carrying
amount of the asset (cash-generating unit) is reduced to its
recoverable amount. An impairment loss is recognised as an expense
immediately, unless the relevant asset is carried at a revalued
amount, in which case the impairment loss is treated as a
revaluation decrease.
Where an impairment loss subsequently reverses, the carrying
amount of the asset (cash-generating unit) is increased to the
revised estimate of its recoverable amount, but so that the
increased carrying amount does not exceed the carrying amount that
would have been determined had no impairment loss been recognised
for the asset (cash-generating unit) in prior years. A reversal of
an impairment loss is recognised as income immediately, unless the
relevant asset is carried at a revalued amount, in which case the
reversal of the impairment loss is treated as a revaluation
increase.
CLIENT MONIES
The management of client monies is part of the group's
residential management activities. This money belongs to clients,
but the Group has administrative control over the monies in order
to perform management services. These monies are not recognised on
the group balance sheet.
INVESTMENTS
Investments in subsidiary undertakings held as non current
assets are stated at cost less provision for impairment.
FINANCIAL INSTRUMENTS
Financial assets and financial liabilities are recognised on the
Group's balance sheet when the Group has become a party to the
contractual provisions of the instrument.
TRADE RECEIVABLES
Trade receivables are classified as loans and receivables and
are initially recognised at fair value. They are subsequently
measured at their amortised cost using the effective interest
method less any provision for impairment. A provision for
impairment is made where there is objective evidence, (including
customers with financial difficulties or in default on payments),
that amounts will not be recovered in accordance with original
terms of the agreement. A provision for impairment is established
when the carrying value of the receivable exceeds the present value
of the future cash flow discounted using the original effective
interest rate. The carrying value of the receivable is reduced
through the set off of the bad debt provision and any impairment
loss is recognised in the income statement.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents comprise cash in hand and at bank and
other short-term deposits held by the Group with maturities of less
than three months. Bank overdrafts are included in cash and cash
equivalents where they have a legal right of set off against
positive cash balances, otherwise bank overdrafts are classified as
borrowings.
BORROWINGS
Loans are recorded initially at their fair value, net of direct
transaction costs. Such instruments are subsequently carried at
their amortised cost and finance charges, including premiums
payable on settlement or redemption, are recognised in profit or
loss over the term of the instrument using an effective rate of
interest.
TRADE PAYABLES
Trade payables are initially recognised at fair value and
subsequently at amortised cost using the effective interest
method.
LEASES
Rentals payable under operating leases are charged to the income
statement on a straight-line basis over the lease term.
TAXATION
The tax expense represents the sum of the current tax expense
and deferred tax expense.
The current tax payable is based on taxable profit for the year.
Taxable profit differs from net profit as reported in the income
statement because it excludes items of income or expense that are
taxable or deductible in other years and it further excludes items
that are never taxable or deductible. The Group's liability for
current tax is calculated by using tax rates that have been enacted
or substantively enacted by the balance sheet date.
Deferred tax is the tax expected to be payable or recoverable on
differences between the carrying amount of assets and liabilities
in the financial statements and the corresponding tax bases used in
the computation of taxable profit, and is accounted for using the
balance sheet liability method. Deferred tax liabilities are
recognised for all taxable temporary differences and deferred tax
assets are recognised to the extent that it is probable that
taxable profits will be available against which deductible
temporary differences can be utilised. Such assets and liabilities
are not recognised if the temporary difference arises from the
initial recognition of goodwill or from the initial recognition
(other than in a business combination) of other assets and
liabilities in a transaction which affects neither the tax profit
nor the accounting profit.
Deferred tax liabilities are recognised for taxable temporary
differences arising on investments in subsidiaries, except where
the Group is able to control the reversal of the temporary
difference and it is probable that the temporary difference will
not reverse in the foreseeable future.
Deferred tax is calculated at the tax rates that are expected to
apply to the period when the asset is realised or the liability is
settled based upon tax rates that have been enacted or
substantively enacted by the balance sheet date. Deferred tax is
charged or credited in profit or loss, except when it relates to
items credited or charged directly to other comprehensive income,
in which case the deferred tax is also dealt with in other
comprehensive income.
Critical accounting estimates and judgements
Critical accounting estimates are based on management's best
knowledge of the amount, events or actions, actual results may
differ from those estimates.
Estimates and judgements are continually evaluated and are based
on historical experience and other factors, including expectations
of future events that are believed to be reasonable under the
circumstances. The resulting accounting estimates and assumptions
will, by definition, seldom equal the related actual results. The
estimates and assumptions that have a significant risk of causing a
material adjustment to the carrying amounts of assets and
liabilities within the next financial year are discussed below.
Impairment of investments, goodwill and other intangible
assets
Determining whether goodwill and other intangible assets are
impaired requires an evaluation of earnings and turnover of the
cash-generating units to which goodwill and intangible assets have
been allocated. The earnings and turnover of the cash generating
units enable a valuation to be derived and thus an estimate made on
whether or not there has been any impairment.
Valuation of share based payments
The charge for share based payments is calculated in accordance
with the analysis described in note 24. The model requires highly
subjective assumptions to be made including the future volatility
of the Company's share price, expected dividend yield and risk-free
interest rates. The directors draw upon a variety of external
sources to aid in the determination of the appropriate data to use
in such calculations.
Valuation and useful lives of intangible assets
In order to determine the value of the separately identifiable
intangible assets on the acquisition of a business combination,
management are required to make estimates of incremental profits
when applying the Group's valuation methodologies. Customer
relationship lives are estimated to be 25 years.
Contingent and deferred consideration
Contingent and deferred consideration relating to acquisitions
has been included based on management's estimate of the fair value
of the consideration due.
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
2012 2011
GBP'000 GBP'000
Revenue 10,600 9,391
Direct operating expenses (8,932) (8,056)
---------- ----------
Profit contribution from businesses 1,668 1,335
Central operating overheads (894) (826)
---------- ----------
Profit before interest, exceptional items,
share based payment charges, amortisation
of other intangible assets and taxation 774 509
Finance costs (16) (7)
Profit before exceptional items, share
based payment charges, amortisation of
other intangible assets and taxation 758 502
Amortisation of other intangible assets (210) (182)
Share based payment charge (10) (6)
Exceptional items (82) -
Profit before taxation 456 314
========== ==========
Direct operating expenses and central operating overheads
include depreciation and staff costs.
2. EXCEPTIONAL ITEM
During the year the group purchased the trade and assets of
Scotts (Putney) Limited. The following costs were incurred in the
acquisition of the business.
2012 2011
GBP'000 GBP'000
Solicitor costs 34 -
Bank costs 13 -
Other professional 35 -
costs
--------- ---------
82 -
========= =========
3. PROFIT FROM OPERATIONS 2012 2011
GBP'000 GBP'000
Profit from operations is stated after
charging:
Depreciation and amounts written off
property, plant and equipment:
- charge for the year on owned assets 138 135
Amortisation of intangible assets 210 182
Operating lease rentals:
- land and buildings 393 373
Set out below is an analysis of other operating expenses;
2012 2011
GBP'000 GBP'000
Employee salaries and expenses 7,391 6,571
Management costs 167 123
Travel costs 118 82
Advertising costs 45 68
Communications 240 236
Premises costs 1,048 1,038
Professional fees 387 366
IT costs 271 231
Depreciation 138 135
Amortisation 210 182
Share based payment charges 10 6
Other expenses 21 32
Exceptional item 82 -
Other operating expenses 10,128 9,070
---------- ----------
Amounts payable to the auditor and its related entities in
respect of both audit and non-audit services are set out below:
2012 2011
GBP'000 GBP'000
Fees payable for the statutory audit
of the company's annual accounts 17 17
Fees payable to auditor for other services:
Statutory audit of the company's subsidiaries 30 28
Total fees payable to the auditor 47 45
========== ==========
4. INCOME TAX 2012 2011
GBP'000 GBP'000
UK Corporation tax:
Current tax on profits of the year 95 77
Deferred tax - 4
---------- ----------
Tax attributable to the company and its
subsidiaries 95 81
========== ==========
Factors affecting tax charge for the
year
The tax assessed for the period is lower than the standard rate
of corporation tax in the UK of 26% (2011:28%). The differences are
explained below:
2012 2011
GBP'000 GBP'000
Profit before tax 456 314
---------- ----------
Profit before tax multiplied by the standard
rate of corporation tax in the UK of
26% (2011: 28%). 119 88
Effects of:
Expenses and depreciation not deductible
for tax purposes 36 30
Amortisation not deductible for tax purposes 52 53
Utilisation of tax losses (2) (2)
Benefit of small companies tax rate (110) (92)
Recognition of deferred tax asset - 4
---------- ----------
Tax charge for the year 95 81
========== ==========
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 GBP1,243,000
(2011: GBP1,243,000). The unprovided deferred tax asset in respect
of these losses is GBP249,000 (2011: GBP249,000).
5. EARNINGS PER SHARE
The calculation of the basic and diluted earnings per share is
based on the following data
2012 2011
GBP'000 GBP'000
Earnings
Earnings for the purposes of basic earnings
per share 361 233
---------- ----------
Earnings for the purposes of diluted
earnings per share 361 233
---------- ----------
Number of shares 2012 2011
'000 '000
Weighted average number of ordinary shares
for the purposes of basic earnings per
share 33,197 31,544
Effect of dilutive potential ordinary
shares:
- share options 229 186
---------- ----------
Weighted average number of ordinary shares
for the purposes of diluted earnings
per share 33,426 31,730
---------- ----------
Basic earnings per ordinary share 1.1p 0.7p
---------- ----------
Fully diluted earnings per ordinary share 1.1p 0.7p
---------- ----------
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.
6. BUSINESS COMBINATIONS (ACQUISITIONS)
On 23 November 2011, the trade and assets of Scotts (Putney)
Limited were purchased by HML Shaw Limited. Scotts (Putney) Limited
was a property management business based in Putney, South West
London.
Net assets acquired in the acquisition are set out below:
GBP'000
Motor vehicles 8
Fixtures and fittings 7
Computer equipment 15
Tangible assets acquired 30
---------
Goodwill 794
Customer relationships 1,050
Intangible assets acquired 1,844
---------
Satisfied by: GBP'000
Cash 1,300
Shares 200
Deferred consideration 100
Contingent consideration 274
Net assets acquired 1,874
---------
Net cash outflow arising
on this acquisition:
Cash consideration 1,300
Transaction costs 82
1,382
---------
The amounts recognised at the acquisition date in respect of
fixed assets acquired in the business combination approximate their
fair value.
Transaction costs of GBP82,000 relating to the acquisition of
the trade and assets of Scotts (Putney) Limited have been
recognised as an expense and included in the administrative
expenses in the Income Statement.
Contingent consideration is due on the first, second and third
anniversaries of the transaction. The fair value of this
consideration has been calculated by making estimates of the
amounts to be paid and then discounting the amounts to the year-end
using an estimate of the company's cost of capital. The deferred
consideration of GBP100,000 and GBP100,000 of the contingent
consideration is due within one year.
If the acquisition of Scotts (Putney) Limited had been completed
on the first day of the financial year, group revenues for the
period would have been GBP11,466,000 and the group profit
attributable to equity holders of the parent would have been
GBP451,000.
The business of Scotts (Putney) Limited contributed GBP530,000
to the Group's revenue and GBP53,000 to the Group's profit before
tax for the period from the date of acquisition to the year-end
date.
7. SHARE CAPITAL
Group
2012 2011
Authorised: GBP'000 GBP'000
163,733,200 ordinary shares of 1.5p each 2,456 2,456
------------- ---------------
2,456 2,456
------------- ---------------
Group
2012 2011
Allotted, issued and fully paid ordinary GBP'000 GBP'000
shares of 1.5p:
1 April 473 473
Issued during the year - 4,675,382 shares 70 -
------------- ---------------
31 March 543 473
------------- ---------------
No. of shares in issue at year end 36,219,748 31,544,366
8. CASH FLOWS
2012 2011
GBP'000 GBP'000
Reconciliation of operating profit to
net cash flow from operating activities
Profit from operations 472 321
Adjustments for:
Depreciation 138 135
Amortisation 210 182
Disposal of fixed assets - 4
Share based payment charge 10 6
Exceptional item 82 -
------------- ----------
Operating cash flows before movements
in working capital 912 648
Decrease/(increase) in receivables 12 (248)
Increase in payables 131 168
------------- ----------
Net cash flow from operating activities 1,055 568
------------- ----------
HML HOLDINGS PLC
OFFICERS AND PROFESSIONAL ADVISORS
DIRECTORS
Executive
Richard Smith Chairman
Robert Plumb Chief Executive
James Howgego Finance Director
Non-executive
Geoffrey Griggs
COMPANY SECRETARY
James Howgego
REGISTERED OFFICE
9-11 The Quadrant
Richmond
Surrey
TW9 1BP
AUDITOR
Nexia Smith & Williamson
25 Moorgate
London
EC2R 6AY
BANK
Barclays Bank plc
One Churchill Place
London
E14 5HP
NOMINATED ADVISOR AND BROKER
FinnCap
60 New Broad Street
London
EC2M 1JJ
PUBLIC RELATIONS AGENTS
Tavistock Communications
131 Finsbury Pavement
London
EC2A 1NT
REGISTRARS
Share Registrars Limited
Suite E
First Floor
9 Lion and Lamb Yard
Farnham
Surrey
GU9 7LL
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR EASKSALDAEFF
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