Hml Share Discussion Threads

[skirbell] 05/7/2019 15:56

My answer would be to commit to a strategy and deliver. They've stated that they believe that there is value in the fragmented industry through consolidation, but have failed so far to deliver on this. Therefore, is their strategy wrong? If not, why are they not delivering growth and should they review how the acquire and integrate? Are they effectively cost stripping to gain the full value or have they overestimated their ability to extract value/reduce cost?

Unless they can demonstrate that they can deliver on the above, they should look at an alternative strategy. For example, rather than buy companies, could they offer services to these organisations? If they have a centralised setup, could this be leveraged by similar companies, thus gaining revenue from them without the cost of acquisition?

Finally, just become a dividend payer and occasionally add when the price is right to gradually grow. At least shareholders can then benefit from a regular payment.

[davidosh] 05/7/2019 13:00

I guess the key question is.....What needs to be done to maximise shareholder returns from here ?

1. Stop buying companies ?

2. Change management ?

3. Increase dividends substantially as cash generation is good ?

4. Find the benefits of scale that have so far not happened ?

5. Sell the company ?

6. A combination of the above ?

It has gone nowhere for five years and the dividend is minimal so we need something to happen.....What do others think?

[rivaldo] 05/7/2019 12:27

Better to be conservative though. Look at SDI - they also use Finncap, and historically Finncap's forecasts have always been conservative, partly because that's the way the company wants it. As a result SDI have consistently pleased the market, and this last year when there were one-off expenses those prudent forecasts came in handy. SDI has been a five-bagger for me to date.

I'd rather a prudent 4.7p EPS forecast which has good prospects of being well beaten than a stretching forecast which may lead to problems.

But there is definitely a balance. As I posted earlier, say 4.9p EPS would be preferable, as a 2% uplift does seem overly conservative.

[stemis] 05/7/2019 09:15

FinnCap are the house broker so their forecast will have been run past the company. That they are forecasting an almost trivial 2% increase in EPS when HMLH have just spent around £1.9m (12% of market cap) on acquisitions indicates how easy the targets are that HMLH want to be judged against.

[rivaldo] 02/7/2019 22:56

Many thanks, appreciated.

HMLH does appeal to the contrarian/stubborn side of me. To me it appears to be accelerating its strategy with the recent £2m of acquisitions, and a 10% EPS rise to 4.6p EPS seems a pretty decent performance.

With a fair wind that "conservative" 4.7p EPS forecast should be beaten, and possibly well beaten following those acquisitions.

It would only take a little tip attention to move the price substantially given the relative illiquidity. In the meantime, there's a dividend to collect and high visibility of revenues going forward, so few sleepless nights holding this one, especially given the confidence expressed in today's outlook.

[graham1ty] 02/7/2019 15:49

Some thoughts on HMLH posted on Stockopedia

hxxps://www.stockopedia.com/share-prices/hml-holdings-LON:HMLH/discussion/

[rivaldo] 02/7/2019 13:25

Good to see 100% buys today (well, from 2 trades!).

Investors will probably as ever take their cue from one of the tipsters who've noticed HMLH in the last few months, who will hopefully update soon following these good results.

[rivaldo] 02/7/2019 08:37

Cheers igoe. Good to see the increased 57p target price.

Finncap have also introduced a 4.7p EPS forecast for this year to March'20. They say themselves that this is "conservative", especially given the 11% forecast increase in revenues and dividend.

Better to under promise and over deliver, but Finncap could have gone a little higher imo as that looks very conservative given the £2m or so of acquisitions made by HML from its own resources in the last few months.

[igoe104] 02/7/2019 08:04

Finn cap upgrade.


The results were slightly ahead of expectations in virtually all respects. The business model continues to deliver consistent growth and cash generation and the group remains well positioned to benefit from any further tightening of industry legislation. We have raised our target price by 8% to 57p, implying potential share price upside of 68%

[rivaldo] 02/7/2019 07:24

Excellent - results are ahead of even the recently increased expectations.

4.6p EPS compares to forecast 4.3p, revenues of £28.1m compare to forecast £27.3m and the dividend is up 12% to 0.47p.

The outlook is confident, stating "We are confident in our ability to maintain this momentum while we continue to build our network and our central support divisions."

I'm guessing Finncap may go for almost 5p EPS this year, which makes the share price pretty cheap.

It's also good to see trade receivables decreasing despite the big rise in turnover.

Investment in centralising the business continues - neverending! - but it seems the benefits are indeed beginning to come through as the narrative suggests, with more to come.

I'd assume there will be further earnings-enhancing acquisitions from cash this year too.

[rivaldo] 01/7/2019 10:48

Thanks davidosh - that would be great, but as ever depends on time and location etc.

[davidosh] 01/7/2019 09:16

I am going to try to arrange a meeting with management if there is any interest on here?

[rivaldo] 01/7/2019 08:33

Good to see an early buy today before tomorrow's results.

Online you can only buy a maximum 15k shares at 34.71p, whilst you can sell 25k at 33p, so looking reasonably promising.

[rivaldo] 27/6/2019 14:28

Results only days away now next Tuesday. The market is keenly anticipating those "slightly ahead of market expectations" figures - someone bought £8.62 of shares today!

[rivaldo] 03/5/2019 12:01

Earlier you could only buy a maximum 500 shares online, so stock looked to be pretty tight - as proven by just £2k of buys now taking the price up 2p.

[rivaldo] 03/5/2019 08:37

Finncap retain their 53p target price and historic forecasts for the moment.

To recap, forecasts were for 4.3p EPS for the year just ended, with a 0.5p dividend, so 4.5p+ EPS is now likely.

There aren't yet any forecasts in the market for the current year, but after all the recent acquisitions without any dilution, forecast EPS could be say 5p+ EPS:

"Positive trading update

The group has released a positive trading update for the 12-month period to
March 2019.

Trading update. The statement confirmed that the group expects to report full year
results to March 2019 “slightly ahead of market expectations”. We are currently
forecasting a 5% increase in revenue from £26.0m to £27.3m and a similar increase
in EBITDA from £2.58m to £2.7m.

The results will be announced on 2 July 2019.

At this stage, our target price of 53p remains unchanged, implying potential upside of 66%. In our view, the current valuation metrics look unjustifiably low for a business with a proven business model, high revenue visibility and predictable cash flow profile. Our target price is based on an EV/EBITDA multiple of 9x."

[graham1ty] 02/5/2019 14:18

Rivaldo, I have just emailed you

[rivaldo] 02/5/2019 14:07

It's where the share price is going that interests me.

I completely agree about the past (though I'm a more recent shareholder). But acquisitions are at the core of the company's plan, so intangible amortisation will continue to be a factor given the sector and types of companies it's buying. It's therefore necessary to accept that (or sell!).

EBITDA will have risen from £2.1m two years ago to likely £2.8m+ this year, and adjusted PBT from £1.8m to probably £2.4m+. Adjusted EPS will have risen from 3.7p two years ago to likely 4.5p+ for the year just ended - so a 22% rise in the last two years is not too shabby at all.

More importantly, given the £2m paid for recent acquisitions - all from existing resources - Finncap's new forecasts for this year and beyond will be interesting. I assume (and hope) they'll be conservative, but 5p EPS would mean 35% EPS growth in 3 years. Again, pretty decent.

[graham1ty] 02/5/2019 13:41

Rivaldo, I do not want to be (too) negative, but reported earnings are forecast to be 2.7p, so possibly 2.8-2.9p if they are a bit ahead.

The 4.3p is adjusted earnings. As they continue to make acquisitions every year ( adding little value it seems) then the argument for looking at adjusted eps looks weaker. Reported eps have risen from 2.6p in 2016, to the forecast of 2.7p three years later. Hardly stellar growth. Even adjusted eps have risen from 3.6p to forecast 4.3p over the same period, just 19% growth over three years. Even if they manage 4.5p adjusted, that is still less than 10% growth on last year’s 4.1p.

And the share price remains below where it was five years ago......

[rivaldo] 02/5/2019 13:24

Excellent news. Forecasts were for 4.3p EPS for the year just ended, with a 0.5p dividend, so 4.5p+ EPS is likely.

With all the recent acquisitions, EPS could reach say 5p+ EPS this year, i.e a P/E of just 7.1 - and with perhaps a 0.6p dividend. Pretty cheap, particularly if HMLH are finally starting to deliver.

[graham1ty] 02/5/2019 13:13

As forecasts are for just 4.9% increase in eps.......beating that may not be that great......

[b3842517] 02/5/2019 12:54

Trading Update and Notice of Results



HML Holdings plc (AIM: HMLH), a leading provider of property management, insurance and ancillary services to residential property blocks, is pleased to announce that the board anticipates being able to report trading slightly ahead of market expectations for the 12 month period ended 31 March 2019.

The board looks forward to releasing results in relation to this period on 2 July 2019.

[igoe104] 10/4/2019 15:19

With new legislation for estate agents and lettings management, kicking in this month. HML should really start now moving upwards. Should be a positive trading update going forward in the next few weeks.

[rivaldo] 08/4/2019 09:13

For the record, Finncap have issued a brief update reiterating their forecasts for the year just finished to 31/3/19, which are:

4.3p EPS
0.5p dividend
£2.3m PBT

They don't yet have forecasts for the current year. The trading update due in the next 2-4 weeks will hopefully produce the "further improvements" which were promised for H2.

With three acquisitions in the last four months for a total of £2m HMLH have certainly been picking up the pace.

[solooiler] 08/4/2019 07:30

Small acquisition. Doubt the market wakes up to this as doesn't alleviate skepticism of the market