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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Myhome | LSE:MYH | London | Ordinary Share | GB0031249856 | ORD 5P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 5.00 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
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RNS Number : 8030X
Myhome International PLC
30 June 2008
Embargoed for release at 7.00 a.m.
30 June 2008
Myhome International plc
("Myhome" or the "Group")
Interim Results For The Six Months Ended 31st March 2008
Myhome International plc, the AIM listed franchise company, announces its unaudited interim results for the six months ended 31st March
2008.
Highlights
* Turnover increased by 151.4 per cent to £4.63m from £1.84m for the comparable period.
* Adjusted operating profit of £479,000 compared to £742,000 for the same period last year.
* The Group has successfully integrated ChipsAway, which was acquired for £16.0m (before costs) in November 2007, into the Group
structure.
* The Directors have completed a restructuring programme which will result in future annual cost savings in excess of £500,000.
* The Group has been divided into two divisions to focus on accelerating organic growth
* Appointed new Non Executive Chairman, Jon Pither and Finance Director Neal Gossage, to strengthen the management team to take
account of the Group doubling in size during the period.
Current trading
As previously reported the Group sold 77 franchises in the first half of the financial year, a number materially below management
expectations. This, coupled with the consumer slowdown and tightening of credit availability for franchisees has had a significant impact on
the business. Management has also been distracted by the reorganisation of the business into two divisions.
In light of these factors, management believe that turnover and profits will be materially below current market expectations for the
year ending 30 September 2008.
Restructuring
As a result of the increase in the size of the business, the Directors decided to restructure the Group during the period to remove cost
duplication and to streamline each of the businesses so that their focus is entirely on generating organic growth by further exploiting the
high profile brand names Myhome owns.
The restructuring has resulted in a number of redundancies, non-core offices being closed and write-offs being made. These changes will
provide the Group with significant future cost savings and a more focussed business which provides a strong platform for growth going
forward. The net cost to the Group of this restructuring in the period amounted to £3.3m.
Russell O'Connell, Chief Executive of Myhome, commented:
"I am satisfied with the progress that the Group has made during this challenging period. We have successfully integrated ChipsAway into
the Group structure and have undertaken a major restructuring programme. Whilst this has taken up a considerable amount of management time,
it needed to be carried out to generate future benefits for the business.
Although the Board is disappointed that adjusted operating profit has fallen against the comparable period, it is confident that the
restructuring will enable management to focus on maximising organic growth across the business. The second half of the year has started well
with over 50 new franchisees recruited between April and June 2008 compared with 77 in the first six months of the year. Whilst I am
disappointed that the business will not meet expectation for the current financial year, I am confident in the ability of the management
team to deliver profitable growth over the medium term."
For further information, please contact:
Myhome International plc 01372 471573
Russell O'Connell, Chief Executive
Neal Gossage, Finance Director
Myhome International plc
Noble & Company Limited 020 7763 2200
Nick Naylor/Alastair Maclachlan
Bishopsgate Communications 020 7562 3350
Nick Rome
Chairman's Statement
Financial Overview Half year ended Half year ended Change %
31 March 2008 31 March 2007
Unaudited Unaudited
Revenue (£m) 4.63 1.84 151.4
Operating Profit before 0.48 0.74 (35.1)
reorganisation costs(£m)
Operating Profit/(Loss)(£m) (2.81) 0.74 -
Adjusted earnings per share 0.79 1.83 (56.8)
Earnings per share (p) (6.33) 1.48 -
Overview of Results
The first half of 2007/8 has seen Myhome more than double in size following the acquisition of the ChipsAway Group. As a result of this
acquisition made in November 2007, Myhome now has ten businesses offering a range of home service and automotive related franchises.
Group turnover has increased by 151.4% with unaudited results for the six month period to 31 March 2008 showing a turnover of £4.63m
(2007: £1.84m). Adjusted operating profit for the period was £0.48m (2007: £0.74m). Adjusted earnings per share were 0.79p (2007: 1.83p).
The first half also saw a major restructuring of the Group. The business has been divided into two distinct divisions based in Esher and
Kidderminster. The Esher division, which has its own managing director, consists of the home services business whereas the Kidderminster
division, also with its own managing director, houses the automotive services including ChipsAway which was acquired in the period.
This reorganisation has resulted in a number of redundancies, office closures and write offs which in turn bring significant cost
reductions and a leaner organisation for the future. In addition, a detailed review of the business was carried out in the period with help
from external advisors to ensure that assets resulting from the reorganisation are recoverable and represent fair value to the Group. The
net cost of this restructuring in the period amounted to £3.3m.
For the half year ended 31 March 2008, the Group had an operating cash inflow of £0.3m (2007: outflow of £0.1m).
After allowing for the reorganisation and the use of the Group's own cash resources to fund the costs of the acquisition, the net cash
outflow for the period was £2.4m.
Acquisition
On 6 November 2007, Myhome completed the acquisition of the ChipsAway Group for initial consideration (before costs) of £16.0m. The
acquisition was financed by the issue of 12.9m new shares together with a loan of £8.0m. This acquisition, the largest made by Myhome to
date, more than doubled the size of the Group and made Myhome the leading 'smart repair' provider in the UK. Prior to its acquisition by
Myhome, the ChipsAway Group had acquired the rights to the intellectual property of the system and paint formula for the world except North
America. This provides an opportunity to grant master franchises in over 150 countries and I am pleased to report that sales have already
been made in Russia and Croatia.
Rebranding
The domestic services businesses have now been rebranded under the Myhome umbrella to provide a clear identity for customers. The Group
is now clearly focussed on the seven key domestic services: residential cleaning, oven cleaning, carpet and fabric cleaning, lawn cutting
and care, plumbing, electrical and window cleaning. The former brands, NicenStripy, Ovenclean and Stainbusters will no longer be used.
The PlumbXpress brand acquired in 2007 will be retained, as this business already has a successful model and is performing well. The
recently launched ElecXpress brand has also been well received by potential franchisees.
The ChipsAway and car valeting brands (Autosheen and PCC) will continue to provide automotive services operating on a 'man in a van'
basis.
The new website, myhome.com, brings all the brands together and provides for significant cross-selling opportunities. The call centre at
the Group head office in Esher is receiving record numbers of enquiries from customers as a result of the awareness created by the website.
Further work on the website will be carried out in the second half of the year to generate even more traffic.
Strategy
The Group is now clearly focussed on organic growth. The acquisitions made in 2007 provide a sound foundation for growth and the
emphasis on marketing of the services will continue to drive opportunities for franchisees. As franchisees' businesses continue to grow,
Myhome revenues will also grow as, for the majority of the management franchises, royalty payments are based on a percentage of franchisees'
sales. The Group now has the operational gearing to deliver strong growth from both the original businesses and from those acquired last
year.
Board
I am delighted to have joined the Board at a very exciting and challenging time for the Group. In the period, Neal Gossage joined the
board as Finance Director and Russell O'Connell became Chief Executive following my appointment as Chairman.
I would like to express my thanks to Simon McNeill-Ritchie and Jonathan Jenkins both of whom resigned from the Board in the period.
I would also like to thank all the staff and franchisees who have contributed to the development of the Group at a very challenging
time.
Financing
As part of the acquisition of ChipsAway Group, the company secured a new £8 million loan facility from Lloyds TSB and a further £8
million of equity through the issue of new shares. As at 31 March 2008 the Group had net debt of £8.6 million.
Sale of subsidiary
In the period Myhome disposed of Increase:Decrease Limited, a subsidiary of Ferrum Group Limited for a cash consideration of £1. This
resulted in a loss on disposal of £751,000. At the time of disposal Increase:Decrease Limited was not trading. A decision was taken by
management to dispose of this business because the business was carrying out similar activities to another subsidiary of the Ferrum Group.
Outlook
Trading in the second half of the year has started well with over 50 new franchisees being recruited between April and June 2008
compared with 77 in the first six months of the year. However, the Board is aware of the effects of a weaker economy on Myhome's businesses.
The continued employment of the traditional 'cash rich, time poor' Myhome customers is becoming less certain and this inevitably creates
pressure on domestic budgets, which will affect the results for the second half of the financial year.
The slowing economy coupled with the 'credit crunch' has affected the ability of potential franchisees to raise loans to finance their
businesses and only potential franchisees with very good credit histories are finding it straightforward to raise finance.
Despite these pressures, franchisee recruitment remains strong and the prospects for organic growth in the future based on the
acquisition of new customers for franchisees and increasing royalty income, remain encouraging.
The Group now has a strong portfolio of businesses and the Board is confident that the investments made last year provide a strong base
for profitable growth over the medium term.
Jon Pither
Chairman, Myhome International plc
30 June 2008
Consolidated Income Statement
For the period ended 31 March 2008
31 March 2008 31 March 2007 30 September 2007
(6 months) (6 months) (12 months)
Note £000 £000 £000
Revenue 2 4,633 1,843 5,073
Cost of sales (1,798) (276) (458)
Gross Profit 2,835 1,567 4,615
Administrative expenses (2,356) (825) (3,160)
Adjusted operating profit 479 742 1,455
before reorganisation costs
Reorganisation costs (3,285) - -
Operating profit (2,806) 742 1,455
Finance income 6 43 123
Finance costs (306) (43) (120)
Net finance costs (300) - 3
Loss on sale of subsidiary (751) - -
Profit/(loss) on ordinary (3,857) 742 1,458
activities before taxation
Tax on profit on ordinary - (141) (70)
activities
Profit/(loss) for the period (3,857) 601 1,388
Attributable to
Equity holders of the parent 5 (3,857) 601 1,388
Adjusted earnings per share
expressed in pence per share:
Basic 3 0.79 1.83 3.26
Diluted 0.65 1.36 2.56
Earnings per share expressed
in pence per share:
Basic 3 (6.33) 1.48 3.11
Diluted (5.24) 1.10 2.44
The notes form part of these financial statements.
Consolidated Statement of Recognised Income and Expense
For the period ended 31 March 2008
31 March 31 March 30 September
2008 2007 2007
(6 months) (6 months) (12 months)
Note £000 £000 £000
Profit/(loss) for the 5 (3,857) 601 1,388
financial year
Total recognised income and (3,857) 601 1,388
expense for the period
Consolidated Balance Sheet
At 31 March 2008
31 March 2008 31 March 2007 30 September 2007
Note £000 £000 £000
Assets
Non-current assets
Intangible assets - brand 34,091 4,378 13,182
Intangible assets - 1,268 417 669
development costs
Property, plant and equipment 2,363 1,942 2,118
Investments 100 100 100
37,822 6,837 16,069
Current Assets
Inventories 193 26 127
Trade and other receivables 1,811 2,426 3,053
Cash and cash equivalents 565 3,268 2,948
2,569 5,720 6,128
Liabilities
Current liabilities
Trade and other payables 5,822 925 2,105
Financial liabilities -
borrowings
Interest bearing loans and 8 4 1
borrowings 9 2 4
0
Tax payable 422 160 170
6,333 1,127 2,415
Net current assets (3,764) 4,593 3,713
Non-current liabilities
Trade and other payables 6,825 375 4,625
Financial liabilities -
borrowings
Interest bearing loans and 9 1 1
borrowings , , ,
1 6 3
7 8 7
3 8 7
15,998 2,063 6,002
Net Assets 18,060 9,367 13,780
Shareholders' equity
Called up share capital 5 3,177 2,312 2,534
Share premium 5 17,392 6,503 9,898
Other reserves 5 8 - 8
Retained earnings 5 (2,517) 552 1,340
Total shareholders' equity 18,060 9,367 13,780
Total equity 18,060 9,367 13,780
Consolidated Cash Flow Statement
For the period ended 31 March 2008
31 March 31 March 30 September
2008 2007 2007
(6 months) (6 months) (12 months)
Note £000 £000 £000
Profit on ordinary activities (3,857) 742 1,458
before taxation
Depreciation of tangible fixed 130 35 152
assets
Amortisation of intangible 61 - -
fixed assets
Loss on disposal of fixed 81 - 2
assets
Loss on disposal of subsidiary 751 - -
Net finance costs 300 (43) 120
Share based payments - - 7
(Increase) in inventories (66) (14) (115)
Decrease/(Increase) in trade 1,242 (565) (1,449)
and other receivables
Increase/(Decrease) in trade 1,797 (254) (2,569)
and other payables
Cash flows from operating 439 (99) (2,394)
activities
Net interest paid (144) 43 (120)
Tax received/(paid) - 16 159
Net cash generated from 295 (40) (2,355)
operating activities
Cash flows from investing
activities
Acquisitions of businesses:
- Consideration 4 (16,902) - -
- Cash acquired 360 - -
Deferred acquisition payment - (375) -
Purchase of Intangible Assets (828) (170) (1,491)
Purchase of Tangible Assets (34) (1,556) (1,918)
Net cash used in investing (17,404) (2,101) (3,409)
activities
Cash flows from financing
activities
New loans in the period 6,596 1,062 822
Capital repayments in the - (77) (51)
period
Amount introduced by directors - - 1
Share issue 8,137 4,156 7,132
AIM listing fees - (540) -
Payment of Finance Lease (7) - -
Liabilities
Net cash from financing 14,726 4,601 7,904
activities
Increase/(Decrease) in cash (2,383) 2,460 2,140
and cash equivalents
Cash and cash equivalents at 2,948 808 808
beginning of period
Cash and cash equivalents at 565 3,268 2,948
end of period
Notes to the interim report
31 March 2008
* Basis of preparation
This interim financial information has been prepared in accordance with International Accounting Standard (IAS 34) 'Interim Financial
Reporting'. The accounting policies applied in the preparation of this financial information are consistent with those adopted in the
statutory accounts for the year ended 30 September 2007.
The financial information shown is unaudited and does not constitute statutory accounts within the meaning of Section 240 of the
Companies Act 1985.
The figures for the period ended 30 September 2007 were derived from the statutory accounts for that period. The statutory accounts for
the period ended 30 September 2007 have been delivered to the Registrar of Companies and received an audit report which was unqualified and
did not contain statements under Section 237(2) or (3) of the Companies Act 1985.
This interim report was approved by the Board on 30 June 2008.
* Segmental analysis
There is no activity other than the main business activity - the sale and management of franchises in the home services and automotive
sectors. The group recruits franchisees to operate under the Myhome and ChipsAway brands.
As there is only one main business activity, there is no segmental disclosure in this interim statement.
* Earnings per share
31 March 31 March 30 September
2008 2007 2007
(6 months) (6 months) (12 months)
Number of shares (million)
Weighted average number of 60.946 40.497 44.623
shares used in basic eps
Effect of dilutive securities 12.696 13.935 12.196
- share options
Weighted average number of 7 5 5
shares used in diluted eps 3 4 6
. . .
6 4 8
4 3 1
2 2 9
Earnings (£000)
Profit for the period ( 6 1
attributable to ordinary 3 0 ,
shareholders , 1 3
8 8
5 8
7
)
Earnings (3,857) 601 1,388
Earnings per share (pence)
Basic (6.33) 1.48 3.11
Diluted (5.24) 1.10 2.44
* Acquisition of subsidiary
On 6 November 2007, the company acquired the entire share capital of Edwin Investments Limited. The initial consideration for the
acquisition (including costs) was £16,902,000.
This was financed from: £000
Own cash resources 919
Issue of new shares at 72p per share 6,738
Proceeds from the issue of Share Warrants 1,400
New bank loans 6,647
Issue of Vendor loan notes 1,198
16,902
The book and provisional fair values of the assets and liabilities acquired were as follows:
£000
Property, plant and equipment 291
Inventories 254
Trade and other receivables 297
Cash and cash equivalents 360
Trade and other payables (952)
Tax payable (259)
Bank loans (4,330)
(4,339)
Intangible assets acquired 4,009
Goodwill 21,232
20,902
Satisfied by:
Cash consideration 919
Equity consideration 8,138
Loans 7,845
Deferred consideration 4,000
20,902
Goodwill recognised above includes items that cannot individually be separated and reliably measured due to their nature. These include
the expertise of staff and synergy benefits.
* Statement of changes in shareholders' equity
Share Share Other Retained Total shareholders
Capital Premium Reserves Earnings equity
£000 £000 £000 £000 £000
At 1 October 2007 2,534 9,898 8 1,340 13,780
Profit for the period (3,857) (3,857)
Share based payments 0
New shares issued 643 7,494 8,137
At 31 March 2008 3,177 17,392 8 (2,517) 18,060
At 1 October 2006 1,731 3,468 - (49) 5,150
Profit for the period 601 601
Share based payments 0
New shares issued 581 3,035 3,616
At 31 March 2007 2,312 6,503 0 552 9,367
This information is provided by RNS
The company news service from the London Stock Exchange
END
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