Hml Share Discussion Threads

[graham1ty] 28/12/2019 13:05

Rob Plumb retires with 820,000 options presumably to be abandoned, as all out of the money. The 2014 options have an exercise price of 33p, which shows what the share price has done over five years ( down if you had not noticed). The 2015s were at 41p, 2016s at 32p, 2017s at 36p and 2018s at 33.5p.

He has 190,000 options from 2013 exercisable at 15.25p. So, at 32p they are worth about £30,000. Not much of a return from options issued over almost a seven year period.

His shares are worth a short £ million. Obviously if the share price was 60p he would have £2 million. But it isn’t.

[rivaldo] 11/12/2019 07:27

Let's hope last night's options grants to various employees and directors - exercisable at 32p - are indicators that the Board believe it's upwards and onwards from here:

[davidosh] 27/11/2019 16:13

Maybe it would be worth looking at similar block management companies and establishing their profit margins and which activities are actually most profitable. I do think there is room for improvement here and they have started to release problem blocks that are clearly not profitable. The margins should start to improve with the management changes that have been made too.

[igoe104] 27/11/2019 16:10

Chris Mills is also accumulating a lot of stock in SUR as well has over 19% of the company now.

[graham1ty] 26/11/2019 15:24

Looking at the accounts, you can see the profits that HMLH make from insurance. They broker deals, so the client is not getting ripped off, however, the ( very blunt) segmental revenue shows Insurance making £2.333m profit on £3.050m revenue. Nice if you can get it.

Meanwhile Property Management made £741,000 on £23.238m of revenue. That is a 3% margin. Surveying services also made £240,000 on £1.8m of revenue.

BUT this is before allocation of central overheads of £1.578m. Let us take a stab at where Management time is spent, and therefore how central overheads might be allocated. Insurance looks after itself, is very profitable, and probably uses little Management time. Let’s allocate, say, £250,000 of central overhead to insurance and £150,000 to surveying. The bulk of Management time however, is on property management, so the rest, about £1.2m might be allocated to property management.

AND THAT MAKES PROPERTY MANAGEMENT ACTUALLY A LOSS MAKING ACTIVITY, propped up only by Insurance. It may actually even be worse than this as, if you allocate central overhead by % of revenue, property management would be wearing 83% of the overhead, or over £1.3m.

This is not an exact science as we cannot see where profit is actually taken ( it’s only in the signed, audited accounts......) and we cannot see how overhead is allocated. But it is a fair guess that property management is an unprofitable activity

[graham1ty] 26/11/2019 15:12

I have only just had time to crunch some numbers.

Revenue rose 6.5% on 2H and 14.3% on 1H last year.

Gross profit fell from £1.76m in 1H last year, and £2.01m in 2H to £1.75m. So, 13% fall on 2H last year, despite a 6.5% increase in revenues.

Gross margin fell to 11.3% GROSS MARGIN HAS NEVER BEEN THIS LOW SINCE MY ANALYSIS BEGAN IN 2012. In 2012 gross margin was 16%, and was still 16% in 2H 2015, but has fallen consistently since then. A fall from 15.9% in 1H 2016 to 11.3% now, is a 29% fall in gross margin over a period when revenue has increased 72%......(£15.49m vs £8.98m).

Reported Operating profit in 1H fell 12% relative to 1H last year, but 28% from the £954,000 in 2H down to today’s £688,000.

Operating margin was 4.4%. This is the lowest since 2H 2012. In 1H last year it was 5.8% and in 2H 6.6%. THIS IS A CATASTROPHIC FALL. Using the same time period as above, 1H 2016 compared to today, revenue has risen by £6.5m ( using £15.49m and £8.98m as above) and operating profit has risen by £67,000 ( £688k vs 621k in 2016).

So, AN ADDITIONAL £6.5m OF REVENUE HAS PRODUCED A MARGINAL 1% RETURN. This is appalling.

Since 2006, HMLH has spent approximately £18m on acquisitions ( the gross, including all earnouts would be £18.7m). The market cap is, at 32p, £14.5m. Value destruction.

Using the same period as above, from March 2016 to date they have spent £9.3m on acquisitions........to add.........£67,000 of extra profit.

Says it all really

[igoe104] 26/11/2019 14:55

Ive sold as well, just about even overall.

probably now means they will be taken over at a premium now. sold for 32.5p.

[graham1ty] 26/11/2019 12:24

HMLH generate about £3m in free cash flow per annum. It was £2.4m in 2018, £3.3m in 2019 and £1.4m in the six months reported today.

The dividend currently costs £192,000.

If they paid out £0.5m per annum, and cut out one acquisition, would shareholders be happier ? I suspect yes

[graham1ty] 26/11/2019 12:17

You are probably right. A short 300,000 gone through over last 24 hours, apparently all sales, yet firm 32p on the bid.

Oryx bought 3m shares at 37p in the placing in Dec 2016, so their average must be above these levels still.......

[davidosh] 26/11/2019 11:39

This looks ripe for a Chris Mills deal and I am sure he is hoovering up the stock and will be at 15% any day. At that point he will seek to put someone on the board and it is lucky Rob Plumb'jam tomorrow' is retiring as one less obstacle.

I am not going to capitulate as my last hope is the new CEO who seems a good replacement but only if CM allows it to happen for all shareholders...

[rivaldo] 26/11/2019 09:10

Finncap retain their 57p target price.

And their forecasts of 4.7p EPS, 0.5p dividend and £2.5m adj.PBT.

[bellymonster] 26/11/2019 08:49

It's enough for me. Held for years but zero progress being made.

[graham1ty] 26/11/2019 08:18

I have to assume Chris Mills is sitting on the bid. Otherwise, I have no idea how these are still 32p bid.

Including yesterday, there have been 210,000 of sales at 32p and the price is not falling

[graham1ty] 26/11/2019 08:16

Rivaldo in 2016 they made £679,000 in operating profit on £10.2m revenue

Today, £688,000 on £15.5m of revenue.

That is £5.3m of added revenue mainly from ( expensive) acquisitions. And negligible increased profit.

And the statement mentions economies of scale !!!

[rivaldo] 26/11/2019 08:10

I'll continue to hold, despite these uninspiring results, since the value is there even if the growth is (currently) not.

With 2.1p adjusted EPS in H1 alone, the group are weathering a slowdown in the property market with only a tiny reduction in that H1 EPS.

Turnover is up nicely, but AFAICS they don't disclose how much of that is due to acquisitions and how much (if any) is organic.

The fabled delivery in systems integration is supposedly there or nearly there. We shall see.

Hopefully more acquisitions will follow soon, and maybe the long-awaited renaissance will occur. But I don't suppose many are holding their breath!

[itsnotmeitsy0u] 25/11/2019 16:50

damn these illiquid shares

[itsnotmeitsy0u] 25/11/2019 16:50

was unable to buy any whatsoever...

[davidosh] 25/11/2019 11:59

I suspect the results are out tomorrow but it would have been good if the company could give advance notification to shareholders.

[rivaldo] 25/11/2019 10:47

The H1 results will hopefully be out this week (27/11 last year and 30/11 the year before).

Given the optimistic outlook in the prelims they should show decent progress.

I noticed the 5k buy this morning, so went online, which looks encouraging and hopefully indicates a buyer out there and a lack of stock.

You can sell 20,000 shares at 31.2p, whilst you can only buy a maximum 2k shares at 33p.

[qs99] 05/11/2019 09:39

Thanks will look at fincap as I found research tree expensive and didn’t get much out of it in the end... decent idea but their coverage needs to be wider

[rivaldo] 05/11/2019 09:24

No probs QS99. If you register on Finncap's web site you can get their research on HMLH et al for free. Otherwise you can subscribe via Research Tree.

Finncap's July note forecast £2.9m EBITDA this year (with 4.7p EPS), but they said themselves that this was a "conservative" forecast. And there's also been a small acquisition since then. So I'd agree that £3m+ EBITDA and a beating of cautious forecasts is entirely possible.

[qs99] 05/11/2019 09:08

Seriously no stock around Riv! Like the new deals they have brought on board, but cannot find any broker comments as probably too small.

Any views on the next FY EBITDA numbers please? I should think North of £3m given recent deals, debt not overly high and room to move, divi increasing....nice find, thanks Riv

[rivaldo] 05/11/2019 08:20

Encouraging to see a 15k buy at 33.75p this morning - paying well above the 33p published offer price. Followed by a nice move up.

Online you can only buy a tiny maximum 1k shares at 33p, so not much stock available as I write.

[davidosh] 04/11/2019 15:06

I have had Chris Mills involved in three companies where I have been a holder and he usually engineers something to his advantage by getting a lowball bid away IMHO from experience. You only need to check out what happened at Essenden a few years ago for example so I am now on alert for a 45p or thereabouts bid when in reality I have hoped this was a company that could get to 70p at least having been at 43p four years ago and doubling revenue since then.

Chris Mills will have spotted that the hard work and investment has been done and the company shareholder base are tired with waiting !

[rivaldo] 04/11/2019 14:30

The shares are pretty tightly held - these major holders own 72% between them. Any continued demand should see a decent price reaction:

Significant Shareholders

LTC Holdings plc 9,432,117 20.6%
Oryx International Growth Fund Limited 6,275,000 13.7%
BGF Investment Management Limited 3,787,018 8.3%
Unicorn Asset Management 3,719,278 8.1%
Robert Plumb 2,964,067 6.5%
City Asset Management 2,133,784 4.6%
Richard Smith 1,952,400 4.3%
James Howgego 1,587,500 3.5%
MD Barnard & Co Limited 1,390,000 3.0%