Hml Share Discussion Threads

[adamb1978] 20/9/2016 20:24

Given HML typical publish headline EPS, pre any adjustments and on a undiluted number of shares, the comparable number for last year in theory is 2.7p. If that's going to 3.4p this year then these are indeed cheap.

A slightly more generous yield might help attract investors in, which would be useful given that this doesn't have the feel of something which naturally attracts growth investors in

[shanklin] 20/9/2016 07:27

P.S. Nice to see an AGM statement.

[shanklin] 20/9/2016 07:27

Hi rivaldo

Assuming 3.4p is a forecast adjusted EPS number, this is lower than last year's 3.7p+, as per your post 244.

HMLH have been increasing this number for some years, so I imagine this forecast is very conservative, HMLH will almost certainly beat it and is indeed very good value at current levels.

All IMHO.

Cheers, Martin

[rivaldo] 20/9/2016 07:14

Today's AGM statement is short, sharp and very encouraging:

"The business continues to perform well with a positive start to this year. Management remain confident that trading remains in line with expectations."

Being in line with 3.4p EPS (and a 0.4p dividend) makes this good value at 33p imo.

OT : davidosh, sorry I can't attend, hope it goes well.

[davidosh] 13/9/2016 12:57

We now have 17 attending which is excellent compared to the previous years where just two or three have attended. The directors will be providing a presentation and showing us how the business model works by walking us through at least one of the acquisitions done a few years ago.

[100laila] 13/9/2016 08:40

OK have sent email to mellomeet

[100laila] 13/9/2016 08:40

OK have sent email to mellomeet

[shanklin] 12/9/2016 15:17

[e-mail] is the e-mail address you need.

[davidosh] 12/9/2016 13:54

100laila....Can you email me your name ? via mellomeeting.co.uk is fine

[cockerhoop] 12/9/2016 13:49

David,

I would love to come down to Richmond for the Agm but unfortunately have a (much more mundane) prior engagement that I need to attend on the 20th.

[100laila] 12/9/2016 13:20

Hi David

I plan to attend.

[davidosh] 12/9/2016 12:57

Any more coming to the Agm ? I need to give them a good idea of numbers for presentation and sandwiches.

[cockerhoop] 12/9/2016 12:31

Buffetteer,

I can't really see how that can be the case, in the last 5 years to 31st March 2016 they have spent over £6m on acquisitions implying PAT of £1.2m. If as is suggested here that they then improve profitability with high margin insurance along with steady organic growth the numbers don't seem to stack up.

[buffetteer] 12/9/2016 09:44

They told me they pay a PE of 5x for acquisitions .

[cockerhoop] 12/9/2016 09:09

David,

Regarding acquisitions - the notes in the AR's contain some information regarding rev and profitability of acquired companies in the 1st year of ownership including their contribution if theoretically acquired on the 1st day of the financial year covered.

I though found the narrative a little confusing as in some cases the theoretical rev for the full year of ownership was less than the actual partial contribution.

eg. Clearwater acquired on 31st July 2015

If the acquisition of Clearwater had been completed on the first day of the financial year, group revenues for the period would have increased by £18,000 and the group profit attributable to equity holders of the parent would have increased by £2,000. The business of Clearwater contributed £35,000 to the Group’s revenue and increased the Group’s profit by £2,000 from the date of acquisition to the year-end date.

Alan Foster acquired 28th May 2014

If the acquisition of Alan Foster & Associates had been completed on the first day of the financial year, group revenues for the period would have increased by £56,000 and the group profit attributable to equity holders of the parent would have increased by £2,000. The business of Alan Foster & Associates contributed £233,000 to the Group’s revenue and increased the Group’s profit by £23,000 from the date of acquisition to the year-end date.


The data i've looked at though does imply they are paying substantially more than 1-1.25 P/S ratio for some of the acquisitions.

[shanklin] 12/9/2016 08:27

AdamB

To be fair, at least HMLH are using cash rather than paper to fund their acquisitions. Given the weak (IMHO) share price, issuing shares to fund acquisitions would be a major problem.

[davidosh] 11/9/2016 19:54

Does anyone have the historic data showing the Pbt for the acqired companies and p/e ratings that HML bought in all the recent say last five years of acquisitions.

[adamb1978] 11/9/2016 13:55

I also cannot make it on Tues 20th, though would very much like to. Main reason would be (i) to try to make the point which Shanklin makes above - the way they present their results does not help get the share price up and (ii) why the buy and build strategy doesn't seem to be working

[williamgtheobald] 11/9/2016 09:30

Davidosh /& Shanklin

Unfortunately due to work commitments I am unable to attend the AGM.

However I am in the process of appointing a proxy.

I am worried that they are paying too much for their acquisitions.

As already has been mentioned by another poster previously;

‘There's no way the tiny businesses they pick up should be more highly rated than a listed company. Clearly they'd be much better off just buying their own shares for cancellation’.

[shanklin] 09/9/2016 16:51

davidosh

Happy to attend the AGM. Will see you there.

My additional concern is the fact that HMLH do not provide adjusted P/L and EPS numbers in their results. This means they midleadingly understate their EPS by circa 1p which is a major reason why their share price fails to reflect the performance of the business. I can see no good reason for this.

Given their business model, they should be buying businesses on a P/E of say 6, more obviously driving through efficiencies to generate strong EPS growth and then being rewarded in the market by a P/E of 12-15 (say).

All IMHO.

[davidosh] 08/9/2016 23:26

We are hoping to have a large group of us there. I do have my own concerns that the business model is not delivering the economies of scale that one would hope to see.

The multiples being paid for private companies is then being downgraded by 40% when sitting in the listed group. That is without any group savings/centralised cost benefits so one would hope for premium valuation not discount.

What are the board plans to reduce this ? Do they have a strategy to improve the margins and profits to hit their £20m 20% targets....in the last two years Admin costs have risen at twice the rate of the profits.

[chinahere] 08/9/2016 22:35

I'm not 100% sure (will check my diary tomorrow) but it sounds a good idea David.

[davidosh] 08/9/2016 18:10

I will arrange for a presentation and a lunch for after the AGM. How many of you are able to join us ?

The AGM will be held at HML's offices at 9-11 The Quadrant, Richmond, Surrey, TW9 1BP on 20(th) September 2016, at 11.00 a.m.