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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
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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 | |
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0.00 | 0.00% | 5.00 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
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0 | 0 | N/A | 0 |
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 IR FKLFLVQBXBBB
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