TIDMHMLH
RNS Number : 6131R
HML Holdings PLC
01 July 2020
HML Holdings plc
("HML", the "Company" or the "Group")
Preliminary Results for the Year Ended 31 March 2020
HML Holdings plc (AIM: HMLH), the property management services
group, is pleased to announce its final unaudited results for the
year ended 31 March 2020.
Financial Highlights:
-- Revenues up 11% to GBP31.2m (2019: GBP28.1m)
-- EBITDA down 1% to GBP2.78m (2019: GBP2.80m)**
-- Adjusted operating profit down 2% to GBP2.35m (2019: GBP2.41m)*
-- Adjusted basic earnings per share down 4% to 4.4p (2019: 4.6p)***
-- Dividend per share proposed of 0.52p (2019: 0.47p)
-- Net debt of GBP1.7m (2019: GBP1.0m)****
*before interest, share based payment charges, amortisation and
tax
**before interest, share based payment charges, depreciation,
amortisation and tax
***before share based payment charges and amortisation
****cash at bank less borrowings, excludes IFRS16 lease
liabilities
Commenting on the results, Alec Guthrie, Chief Executive of HML
said:
"FY2020 was a challenging year and despite the unprecedented
impact of the Coronavirus pandemic, HML produced a solid set of
results and recorded another year of revenue growth.
HML responded quickly to the UK Government lockdown and
successfully moved 85% of its service delivery into an environment
of home working for the length of the lockdown. This presented the
operation with some initial challenges, but these have largely been
overcome and we do not see any long-term impact on the delivery of
our service to our client base.
We do not foresee any long-term impact on the Group's wider
strategic plan, however in the short-term, a reduction in housing
transactions will reduce a number of the ancillary revenue streams,
which will materially impact the Group's financial performance in
FY2021. For FY2022 the Board intends to focus on accelerating the
digital transformation of the Group's processes to see promising
levels of adoption in all branches. This will improve the business
output and the Group will be able to take advantage of recent
acquisitions along with recent restructures and demonstrate growth
in all areas as the management team matures. The intention of the
digital transformation is to help reduce the burden of maintaining
a geographically spread branch network and adopt more regional hubs
along with engaging locally with clients through readily accessible
digital tools. All of which will positively improve our business
whilst we continue to deliver good property management of
buildings."
For further information: www.hmlgroup.com
HML Holdings plc: 020 8439 8529
Alec Guthrie, Chief Executive Officer
James Howgego, Chief Financial Officer
Tavistock Communications Group: 020 7920 3150
James Verstringhe, James Carey
finnCap:
Ed Frisby, Giles Rolls - Corporate Finance 020 7220 0500
Camille Gochez - ECM
RE VIEW OF BU SIN E SS
Financial performance
We are pleased to report a solid set of results with revenue
growth of 11% to GBP31,215,000 (2019: GBP28,110,000) for the year
ended 31 March 2020, albeit tempered by a 2% decline in earnings
before interest, share-based payments, amortisation and tax reduced
to GBP2,351,000 (2019: GBP2,413,000).
Despite the growth in revenue, the Group has faced some
headwinds during the year due to a slower than anticipated
integration of two of our recent acquisitions, changes in market
regulation and the impact of COVID-19 during the last six weeks of
the financial year.
On the operational side of the business, we have made
significant progress completing two major internal restructuring
projects and also embarked on an initiative to introduce more
digitalization into the business with the appointment of Anand
Verma as non-executive director. Anand, who joined in early March
2020, brings more than 20 years of experience in digital and
technology innovation and transformation to the business.
Progress on acquisitions
HML made four acquisitions during the year.
In the first half of the year, HML purchased the trade and
assets of Thornes Chartered Surveyors ("TCS"), a property
management business with an office in Luton and acquired 100% of
the share capital of Prima Property Services Ltd, a lettings
business based in Birmingham. Both businesses were acquired to
strengthen and develop our lettings provision and we are delighted
with the additional regional coverage they bring to our national
network of offices.
HML also purchased two block management businesses. In the first
half of the year, HML acquired Francis Butson Associates, based in
St Neots and in the second half of the year, HML purchased
Leasehold Management Ltd ("LML"), a business based in Worthing.
Both specialise in traditional block management and in time will
bring the usual synergies to our Group.
As a consolidator of a fragmented market, opportunities to
acquire businesses like these are becoming more common, although we
have found that it is increasingly challenging to acquire
businesses at a competitive price and then to integrate them
quickly into the wider HML platform which is necessary to ensure
they contribute profitably in the short term. This experience has
given rise to a wider review of the HML strategy, which we will
update the market on in due course. This review is ongoing and it
is intended that we brief the market before the end of the 2020-21
financial year.
Government regulation and compliance
Government announcements around External Wall Systems (EWS)
relating to the ongoing fallout from Grenfell, have had an impact
on both our Health and Safety work, as well as the ability for many
developments to actively sell their properties. This is largely
because neither the industry nor HML have been able to produce a
certificate of safety for a large percentage of our properties.
This status quo is addressed in part by the announcement of a new
Government fund to support remedial works, although it will take
time to access these funds.
As a business and as the spotlight focuses more on Health and
Safety and compliance, we are finding it necessary to resign on
buildings that are not prepared to adhere to the Government
guidelines around compliance. We also continue to face competition
in the market from some resident management companies who are
willing to engage with less scrupulous agents.
Government appetite for regulation in the light of Brexit and in
turn COVID-19 has most definitely diminished, albeit we as an
operator are still well placed to cope with this when the
Government decides to push ahead with mandatory changes and control
of agents.
Operational progress and update to strategy
Over the past few years, the business has been focused on moving
back office functions to a central location and we are pleased to
report that these moves are now complete.
We have also completed the restructure of our business
development team to ensure greater efficiency in the flow of new
business enquiries directly into our national branch network.
Our business development pipeline remains healthy despite a
reduction in work from developers who are not supplying the same
volume of projects to the market as a result of COVID-19.
Looking to the future, the business is now focused on how to
rationalise its surveying service and restructuring much of the
offering to complement the resident management company client base.
We are also conducting a comprehensive strategic review of our
systems before embarking on further digitising the business
infrastructure to ensure we become much more digital friendly.
In closing, I would like to thank Rob Plumb, who stepped down as
Chief Executive Officer on 31 December 2019, for his service and
commitment to the business over the past 15 years.
HML HOLDINGS PLC
CONS OLID A T ED S T A T E M E NT OF CO M PREHENSI VE INCO
ME
For the y ear ended 31 M a rch 2020
Notes 2020 2019
GBP' 000 GBP' 000
CONTINUING O PE R A TIONS
RE V ENUE 31,215 28,110
------------------------- -------------------
Di rect o perat ing expenses ( 27,453) ( 24,332)
Cent r al ope rat ing o verheads ( 1,411) ( 1,365)
S ha re ba s ed p a y ment cha
rge ( 46) ( 37)
A m orti sation of intang ibles ( 690) ( 640)
------------------------- -------------------
T otal central operat ing overheads ( 2,147) ( 2,042)
------------------------- -------------------
O pe rating expenses ( 29,600) ( 26,374)
------------------------- -------------------
P ROFIT FROM OPE R A TIONS 1 1,615 1,736
------------------------- -------------------
Finance costs 2 ( 198) ( 50)
------------------------- -------------------
P ROFIT BEFORE T A X A T I ON 1,417 1,686
Income tax cha rge 4 ( 324) ( 305)
------------------------- -------------------
P ROFIT AND CO M P R EHENS I VE
INCOME FOR THE YEAR ATTRIBUT AB
LE TO THE O WNERS OF THE PA R ENT 1,093 1,381
------------------------- -------------------
EA R NINGS P ER SHARE
B as ic 5 2.4p 3.0p
------------------------- -------------------
Di luted 5 2.4p 3.0p
------------------------- -------------------
A DJUS T ED EA RNINGS P ER SHA
RE
B as ic 5 4.4p 4.6p
------------------------- -------------------
Di luted 5 4.4p 4.6p
------------------------- -------------------
HML HOLDINGS PLC
CONS OLID A T ED S T A T E M E NT OF CH ANGES IN S H A R EHOLD E
RS E Q UITY
For the y ear ended 31 M a rch 2020
A TTRIBUT AB LE TO THE E QUITY HOLD ERS OF THE GROUP
S ha re S ha re O ther Me rger Reta ined T otal
c apital prem i um r eserve r eserve ea rnings eq u i
ty
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
---------------- --------------- ------------ ------------- ------------- ------------
B alan ce at
31 March ( 88
2 018 682 2,4 50 ) ( 15 ) 11,082 14,111
---------------- --------------- ------------ ------------- ------------- ------------
P r of it for
the year - - - - 1,381 1,381
O ther - - - - - -
comprehen s i
ve inc o me
T r an sactions
with
o w ners
S ha re ba
s ed p a
y ment
cha rge - - - - 37 37
S ha re
cap ital
i ssued 5 48 - - - 53
S ha res
sold by E
BT - - 1 - - 1
Di v i
dend - - - - (192) (192)
---------------- --------------- ------------ ------------- ------------- ------------
B alan ce at
31 March
2 019 687 2,4 98 (87 ) ( 15 ) 12,308 15,391
---------------- --------------- ------------ ------------- ------------- ------------
IFRS16 adjustment - - - - 101 101
--------------- ------------- ------------ ------------- ---------- -----------
Adj b alan ce at 1 April
2 019 687 2,4 98 (87 ) ( 15 ) 12,409 15,492
--------------- ------------- ------------ ------------- ---------- -----------
Profit for the year - - - - 1,093 1,093
O ther comprehen s i - - - - - -
ve inc o me
T r an sactions with
o w ners
S ha re ba s ed p a
y ment cha rge - - - - 46 46
S ha re cap ital i
ssued 2 19 - - - 21
S ha res sold by E BT - - 3 - - 3
Di v i dend - - - - (216) (216)
--------------- ------------- ------------ ------------- ----------- ------------
B alan ce at 31 March
2 020 689 2,517 (84 ) ( 15 ) 13,332 16,439
--------------- ------------- ------------ ------------- ----------- ------------
HML HOLDINGS PLC
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
For the year ended 31 March 2020
2020 2019
A SS E T S Notes GBP' 000 GBP' 000
NON-CURR ENT A S S E TS
G oo dwi ll 12,320 11,384
O ther i ntangible assets 8,809 8,373
P r opert y, pl ant and eq u ipment 5,937 1,030
------------------------- -----------------------------
27,066 20,787
------------------------- -----------------------------
CURRENT AS S E TS
T r ade and other rec e i vab l es 4,329 3,804
Cash at bank - 235
------------------------- -----------------------------
4,329 4,039
------------------------- -----------------------------
T O T A L A SS E TS 31,395 24,826
------------------------- -----------------------------
LI A BILITIES
CURRENT LIAB ILITIES
T r ade and other pa yab les 6,739 6,602
B orr o w ings 975 529
Current tax l iab i l ities 378 357
Lease Liabilities 1,217 -
------------------------- -----------------------------
9,309 7,488
------------------------- -----------------------------
NON-CURR ENT LI AB ILITIES
Borrowings 732 679
Lease liabilities 3,602 -
Deferred tax liability 1,313 1,268
------------------------- -----------------------------
5,647 1,947
------------------------- -----------------------------
T O T A L LI ABILITIES 14,956 9,435
------------------------- -----------------------------
NET A SS E TS 16,439 15,391
------------------------- -----------------------------
E Q UITY
Cal led up s hare cap ital 7 689 687
S ha re prem ium 2,517 2,498
O ther reserve ( 84) ( 87)
Me rger reser ve ( 15) ( 15)
Reta ined earni ngs 13,332 12,308
------------------------- -----------------------------
A TT RIBUT ABLE TO THE E QUITY HOLDERS
OF THE P A R ENT 16,439 15,391
------------------------- -----------------------------
HML HOLDINGS PLC
CONS OLID A T ED S T A T E M E NT OF C A SH FLOWS
For the y ear ended 31 M a rch 2020
Notes 2020 2019
GBP' 000 GBP' 000
O PE R A T ING ACTIVITIES
Cash generated from operations 3,749 3,606
Income taxes paid (303) (297)
Interest paid (32) (50)
------------------ ------------------------
NET CASH FROM OP E R A TING ACTIVITIES 3,414 3,259
------------------ ------------------------
INV ES TING ACTIVITIES
Purchase of property, plant and equipment (378) (629)
Sales/acquisition of own shares 3 1
P urcha se of software (258) (245)
P urcha ses of bu sine sses (1,424) (994)
P a y m ents of de ferred/con t ingent
con side rat ion (752) (759)
NET CASH US ED IN IN V E S TING ACTIVITIES (2,809) (2,626)
------------------ ------------------------
FINANCING ACTIVITIES
New bank loan 910 -
Repayment of existing bank loans (554) (528)
Net movement in overdraft 143 -
Principal element of lease payments (1,144 ) -
Share issue 21 53
Dividend payment (216) (192)
NET CASH (US ED) IN FIN ANCING ACTIVITIES (840) (667)
------------------ ------------------------
NET DECREASE IN CA SH AND C A SH E Q UIV
A L ENTS (235) (34)
CA SH A ND C ASH E QUI V ALENTS AT B E
GINNING OF Y E AR 235 269
------------------ ------------------------
CA SH A ND C ASH E QUI V ALENTS AT
OF YEAR - 235
------------------ ------------------------
HML HOLDINGS PLC
NO T ES
GE NE R AL INFORM A TION
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 and 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 2020 or 31 March 2019.
The financial information for the year ended 31 March 2019 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 2020 have not
yet been delivered to the Registrar of Companies, nor have the
auditors yet reported on them.
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 market of the London Stock Exchange.
The preliminary results were authorised for issue by the board
of directors on 30 June 2020.
1. P ROFIT FROM O PE R A T I ONS 2020 2019
GBP' 000 GBP' 000
P r of it f r om operations is stated after
cha r g i ng:
Depreciation and amounts written off property,
plant and equipment:
- cha rge on owned assets 431 385
* charge on right of use assets 1,127 -
A m orti sation of intang ible assets 690 640
O pe rating lea se renta l s:
- land and buildings - 970
S et out be l ow is an an a l y s is of other operating
expenses:
2020 2019
GBP' 000 GBP' 000
Direct costs 22,258 19,807
Manage ment costs 543 377
T r avel costs 291 287
A d v erti s ing costs 63 95
P r em i ses costs 1,051 2,046
Office costs 679 745
Insurance brokerage 882 761
Professional fees 650 440
IT costs 852 730
Depreciation 431 385
Depreciation on right of use assets 1,127 -
A m orti sation 690 640
S ha re ba s ed p a y ment cha rges 46 37
O ther expenses 37 24
---------------------- --------------------------------
Total operating expenses 29,600 26,374
---------------------- --------------------------------
A m ounts pa y ab le to the auditor and its related enti t ies
in res pect of both au d it and no n -au d it servi ces are s et o
ut b e l ow:
2020 2019
GBP' 000 GBP' 000
Fees pa y able for the stat utory aud it
of the Compa n y 's annual
accounts 29 23
Fees pa yab le to au d itor for other ser
vi ces:
S tatuto ry audit of the Compa n y 's sub
sidiar ies 71 49
------------------------- ----------------------
T otal fees pa y ab le to t he audi tor 100 72
------------------------- ----------------------
2. FIN A NCE CO S TS 2020 2019
GBP' 000 GBP' 000
Interest payable on bank loans and overdrafts 32 50
Interest payable on lease liabilities 166 -
------------------------ ------------------
198 50
------------------------ ------------------
3. PROFIT RECONCIL I A TION
T he recon c i l iat ion set out be l ow pro vi des add iti onal
infor mation to en able the reader to recon c i le to the nu mbe rs
discussed in t he Review of Business.
2020 2019
GBP' 000 GBP' 000
Reven ue 31,215 28,110
Di rect o perat ing expenses (27,453) (24,332)
------------------------- -----------------------
P r of it contribu t i on fr om bu s ine
sses 3,762 3,778
Cent r al ope rat ing o verheads (1,411) (1,365)
------------------------- -----------------------
P r of it before inte rest, tax, a morti
sation and sha re ba s ed pa y ments 2,351 2,413
Finance costs ( 198) ( 50)
------------------------- -----------------------
P r of it before sha re bas ed p a y ment
c harges, amorti sation and taxation 2,153 2,363
A m orti sation of other intang ible a
s sets ( 690) ( 640)
S ha re ba s ed p a y ment cha rge ( 46) ( 37)
------------------------- -----------------------
P r of it before taxation 1,417 1,686
========================= =======================
Di rect o perat ing expenses and central operating overheads inc
l ude dep reciation and staff costs.
4. INCOME TAX 2020 2019
GBP'000 GBP'000
UK Corporation tax:
Current tax on profits of the year 324 326
Over provision of tax in previous year - (21)
-------- --------
Tax attributable to the company and its
subsidiaries 324 305
-------- --------
Factors affecting tax charge for the
year
T he tax assessed for the period is lower than (2019: hi gher
than) the standa rd rate of corporation tax in the UK of 19% (
2019: 19%). The di fferences are expl a i ned be l o w:
2020 2019
GBP'000 GBP'000
Profit before tax 1,417 1,686
-------- --------
Profit before tax multiplied by the standard
rate of corporation tax in the UK of
19% (2019: 19%). 268 320
Effects of:
Amortisation and non-deductible expenses
adjustment 56 6
Over provision in previous year - (21)
-------- --------
Tax charge for the year 324 305
-------- --------
Futu re tax cha r ges m ay be affected by the fact that no de
ferred tax asset is recog n i sed in respe ct of losses. Deferred
tax assets are not recogni sed until the ut i l i sation of the
losses is probabl e.
T he Group has losses carried forward in its sub sidiar y, HML
PM L i m ited whi ch can be recovered against futu re p rof its
arising f rom the same trade. The subsidiary has total tax l o sses
carr ied forward to futu re yea rs of GBP1,24 3,000 (2019:
GBP1,243,000). Until there is certainty over the ability of the
Group to set off these losses, the Group has an unpro v ided de
ferred tax asset in res pe ct of these losses of GBP211,000 (2019:
GBP211,000).
5. E ARNINGS PER S H A RE
T he cal culat i on of the ba s ic and di luted earnings per sha
re is ba sed on the fol l owing data
2020 2019
GBP'000 GBP'000
Earnings
Profit after tax for the period 1,093 1,381
(used to calculate the basic and diluted
earnings per share)
Add back:
Share based payment charge 46 37
Amortisation of intangible assets 690 640
Interest costs 198 50
Adjusted profit after tax for the period 2,027 2,108
-------- --------
The adjusted profit after tax has been used to calculate
the basic and diluted adjusted earnings per share.
Number of shares 2020 2019
'000 '000
Weighted average number of ordinary shares
for the purposes of basic earnings per
share 45,868 45,630
Effect of dilutive potential ordinary
shares:
- share options 437 494
-------- --------
Weighted average number of ordinary shares
for the purposes of diluted earnings
per share 46,305 46,124
-------- --------
Earnings per share
Basic 2.4p 3.0p
Diluted 2.4p 3.0p
Adjusted earnings per share
Basic 4.4p 4.6p
Diluted 4.4p 4.6p
T he di luted ea rnings per s hare a re the ba s ic ea r n ings
per sha re adjusted for the d il uti ve ef fect of the con vers i
on into ful ly pa id sha res of the o utstan d ing s hare option
s.
6. BUSINESS COMBINATIONS (ACQUISITIONS)
On 6 April 2019, HML PM Limited purchased the trade and assets
of Francis Butson and Associates, a property management business
based in St Neots. The acquisition gave HML PM Ltd a presence in
Cambridgeshire. The estimated fair value of the new assets
purchased is set out below.
The fair value of net assets acquired is set out below:
GBP'000
Consideration 694
Other costs 2
--------
Total consideration 696
Less:
Client relationships (319)
------
Goodwill 377
------
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.
GBP'000
Satisfied by:
Cash on completion 569
Contingent consideration 125
--------
694
--------
Net cash flow arising on the acquisition was GBP571,000 which
represents the consideration paid and transaction costs.
The contingent consideration of GBP125,000 is due within two
years. The contingent consideration is made up of two payments that
are adjustable depending on the retention of clients. The range of
potential payments of contingent consideration could vary from GBP0
to GBP125,000, however the more likely outcome would be to pay
GBP125,000.
The business contributed GBP487,000 to the Group's revenue and
reduced the Group's profit by GBP4,000 from the date of the
acquisition to the year-end date.
O n 30 April 2019, HML LAM Limited pu rcha s ed 100% of the sha
re c api tal of Prima Property Services L i m ited, a bu s ine ss
ba sed in Birmingham. The acquis iti on wi ll give HML LAM Ltd a
presence in Birmingham.
T he esti mated fair v a lue of net a ssets trans ferred is s et
out be l o w:
GBP'000
Consideration 149
Other costs 2
--------
Total cost of investment 151
Less:
Tangible fixed assets (16)
Debtors (9)
Cash (7)
Creditors 5
Client relationships (60)
--------
Goodwill 64
--------
T he res idual d i fference be t ween the total con s i derati
on pa id and the net v a lue of the recogni s ed assets acqui r ed
has be en cap ital i sed as goodwi ll. The goodwi ll rec o gni s ed
on the acqui siti on is mainly attr ibutable to the s k ills and
kno w led ge with in the bu s i ne ss.
GBP'000
S at i s f ied b y:
Cash on completi on 120
Deferred and cont ingent c ons i deration 29
------------------
149
------------------
Net cash flow arising on the acquisition was GBP113,000 which
represents the consideration and stamp duty paid less cash at bank
acquired.
The contingent consideration of GBP29,000 is due within one
year. The contingent consideration is a payment that is adjustable
depending on the reduction of clients. The range of potential
payments of contingent consideration could vary from GBP0 to
GBP29,000, however the more likely outcome would be to pay
GBP29,000.
The business contributed GBP95,000 to the Group's revenue and
decreased the Group's profit by GBP45,000 from the date of the
acquisition to the year-end date.
On 1 October 2019, HML LAM Limited transferred in the trade and
assets of Prima Property Services Ltd.
On 30 September 2019, HML LAM Limited purchased the trade and
assets of a residential letting business in Luton called Thornes
Chartered Surveyors. The acquisition gave HML LAM Limited an office
in Bedfordshire.
The fair value of net assets acquired is set out below:
GBP'000
Consideration 472
Other costs 8
--------
Total cost 480
Less:
Client relationships (239)
------
Goodwill 241
------
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.
GBP'000
Satisfied by:
Cash on completion 378
Deferred and contingent consideration 94
--------
472
--------
Net cash flow arising on the acquisition was GBP386,000 which
represents the consideration and costs paid on completion.
The contingent consideration of GBP94,000 is due within two
years. The contingent consideration is made up of a payment that is
adjustable depending on the reduction of clients. The range of
potential payments of contingent consideration could vary from GBP0
to GBP94,000, however the more likely outcome would be to pay
GBP94,000.
It is estimated that the business contributed GBP52,000 to the
Group's revenue and reduced the Group's profit by GBP15,000, from
the date of the acquisition to the year-end date.
O n 07 January 2020, HML PM Limited pu rcha s ed 100% of the s
hare cap i tal of Leasehold Management Limited, a bu sine ss based
in Worthing. The a cqui s i t ion wi ll not only strengthen the HML
PM Limited's po s iti on in South East England but also gives HML
PM Ltd critical mass that will assist in growing HML PM Limited's
ancillary revenues Leasehold Management Limited
T he esti mated fair v a lue of net a ssets trans ferred is s et
out be l o w:
GBP'000
Consideration 856
Stamp Duty 4
--------
Total cost of investment 860
Less:
Trade and other receivables (114)
Cash at bank (415)
Tangible fixed assets (6)
Trade and other payables 111
Client relationships (238)
-------
Goodwill 198
-------
T he res idual d i fference be t ween the total con s i derat i
on pa id and the net v a lue of the recogni s ed assets acqui r ed
has be en cap ital i sed as goodwi ll. The goodwi ll rec ogni s ed
on the acqui siti on is mainly attr ibutable to the s k ills and
kno w led ge with in the bu s i ne ss.
GBP'000
Satisfied by:
Cash on completion 773
Deferred and contingent
consideration 87
--------
860
--------
Net cash f l ow arisi ng on the ac qui s i t i on was GBP357,000
w h i ch rep res ents the c ons ide rat i on and stamp duty paid,
less cash at bank acquired.
T he conting ent c ons i deration of GBP87,000 is due with in
two y ears. The contingent consideration is made up of the payment
that is adjustable depending on the retention of clients and the
arrival of contracted new clients. The range of potential pa y m
ents of contingent con s i derat ion c ould vary f r om GBP0 to
GBP87,000, however the more li kely outcome w ould be to pay
GBP87,000.
T he bu s ine ss contri buted GBP77,000 to the Grou p 's rev
enue and incr e a sed the Group's prof it
b y GBP16,000, f rom the date of the a c qui siti on to the y
ear -end date.
7. SHARE CAPITAL
Group and Company
2020 2019
Authorised: GBP'000 GBP'000
163,733,200 ordinary shares of 1.5p each 2,456 2,456
--------------- ---------------
2,456 2,456
--------------- ---------------
Group and Company
2020 2019
Allotted, issued and fully paid ordinary GBP'000 GBP'000
shares of 1.5p:
At 1 April 687 682
Shares issued during the year - 105,000
(2019: 341,500) 2 5
--------------- ---------------
At 31 March 689 687
--------------- ---------------
No. of shares in issue at year end 45,935,138 45,830,135
--------------- ---------------
S ha res i ssued during the year ended 31 March 2020 relate to
the exerc i s ing of sha re options by HML staff in A ugu st 2019
and Feb rua ry 20 20 .
8. DIVID ENDS
T he Di rectors ha ve proposed pa y ing a di v ide nd of 0.52p
per sha re in r e l ati on to the current y ear ( 2019: 0 .47p per
sha re).
If approved, the dividend will be paid on 16 October 2020 to
shareholders on the register at 2 October 2020. The corresponding
ex-dividend date is 1 October 2020.
9. ADOPTION OF IFRS 16
IFRS 16 "Leases" was adopted with effect from 1 April 2019 in
line with transitional provisions provided in the new standard.
The Group h o lds lea ses on 23 of f i ces and the refore the
adoption of IFRS 16 s i gni f i can t ly increa sed assets and l
iab i l ities in the Statement of Financial Position.
IFRS 16 requires lessees to recognize a lease liability
reflecting future lease payments and a right-of-use asset for all
lease contracts. Therefore, the substantial majority of the Group's
operating lease commitments were brought into the statement of
financial position and amortised and depreciated separately. There
was no impact on cash flows, although the presentation of the cash
flow statement changed.
The effect of adoption of IFRS 16 on reserves as at 1 April 2019
is as follows:
GBP'000
Assets
Right of use asset 5,797
Total assets 5,797
----------
Liabilities
Lease liabilities 5,797
Trade and other payables (101)
------
Total liabilities 5,696
------
Equity
Reserves 101
Total equity 101
----
In relation to those leases under IFRS 16, the Group now
recognizes depreciation and interest costs, instead of an operating
lease expense. During the year ending 31 March 2020, this amounted
to GBP1,127,000 of depreciation charges and GBP166,000 of interest
costs from these leases.
Had IAS 17 continued to be applied, the overall impact on the
Group statement of comprehensive income would not have been
materially different.
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.
END
FR FLFFDRVIIVII
(END) Dow Jones Newswires
July 01, 2020 02:00 ET (06:00 GMT)
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