Hml Share Discussion Threads

[graham1ty] 30/7/2020 07:38

Another low ball bid from Chris Mills. And the unambitious, incompetents who run HMLH have recommended it.

The share price has been in the range 30p - 40p for seven years, and first hit 37.5p in 2013, so not progress for shareholders in seven years.

Thoroughly depressing

[rivaldo] 30/7/2020 07:37

An offer at 37.5p per share :o))

Quite predictable/inevitable I suppose, but seems much too low to me and a bargain for the buyers.

I made a decent profit overall in the end here, but it's been pretty disappointing overall, and HML's management have not exactly covered themselves in glory.

[rivaldo] 03/7/2020 13:43

Yep, very frustrating. The 4.4p EPS just shows as a minimum what the business could be earning if it were run efficiently.

As it is, shareholders are in for another hiatus as HMLH will have been damaged by COVID-19, and there will likely be a reduction in earnings large enough to probably render the current share price reasonable unless HMLH can turn its performance around quickly post-lockdown.

[graham1ty] 01/7/2020 20:08

They seem to boast about the fifty ( yes, 50) acquisitions they have made. I thought my list of 34 since 2006 was comprehensive: obviously not. BUT the ones I do know about, total a cost of £19.77m. Yup, just shy of £20m.

And the market cap, at 25p ? £11.5m, so massive destruction of value.

And the share price, after its IPO in 2006, for most of that year 2006 ? Between 30-36p. So shareholders have done appallingly. Some may have been lucky to buy in the dog days when it was down at 10p in the about 2009-2010. But many will have bought in the period 2014-19, most of which was in the 30s. Probably most people are out of the money with this share.

Where is the urgency ? Where the desire to attack costs and restore margins ? Where the need to get a return for shareholders ?

[davidosh] 01/7/2020 16:17

The acquisition strategy has delivered zilch.....they need to focus on extracting profit and not purely adding revenues.

[rivaldo] 03/6/2020 12:49

There's life :o)) A 12k buy has caused a tick up.

With the property market now coming back perhaps we might see a little interest here.

[rivaldo] 11/5/2020 15:12

50,000 shares bought in four tranches at 26p today. Someone building up a bit of a stake from the looks of it.

[rivaldo] 01/5/2020 15:09

Finncap have left their forecast to March'20 unchanged at 4.7p EPS (too early for forecasts to March'21 given the pandemic).

[graham1ty] 01/5/2020 09:32

They say 95% has moved to home working.

Does beg the question what 24 Offices are needed for, and what 600 staff actually do. There have been so few economies of scale, and staff numbers have risen in line with revenue. Using last years £1.38m net profit, that is just over £2000 per employee !!! Hardly worth the effort

[rivaldo] 01/5/2020 07:53

Today's year end trading update to 31/3 is probably as good as we could expect in the current pandemic, with I'd assume around 4.4p EPS or so and a likely relatively small impact going forward.

And the good news is that this has curbed acquisition activity. So perhaps HMLH will be able to work even harder to deliver all those synergies and cost savings they've been aiming for....

I assume the 0.5p dividend stands since nothing has been said about it.

[davidosh] 09/4/2020 13:35

I see that it has been super quiet here with no posts in two months. No Covid update from the company yet either but I fail to see how it will have a major effect on revenues and I am sure most staff can work from home. Does that equate to a 20% fall in the share price?

I also note the move by Harwood Capital on Fulcram Services today by way of a tender offer.

[rivaldo] 11/2/2020 07:30

Last night's late RNS shows Harwood Capital/Oryx continuing to buy.

They now own over 15%, with 6.925m shares. They've added another 538,000 shares since November's last disclosure.....

[davidosh] 08/1/2020 14:31

The dividend is low because they use all the earnings to acquire more companies every year. So shareholders need to see this strategy working by now or they should start paying a 7% dividend instead as it does throw off cash.

The more likely outcome this year is a bid situation if the earnings do not improve dramatically because Chris Mills will either get involved or want action from an industry player with better track record.

One way or another I can see 50p coming in 2020 but prefer it to be with a very successful management team improving margins and getting HMLH to new highs.....and that does not mean 20 storey resi blocks !!

[rivaldo] 08/1/2020 14:08

That yield is much the same as you get from one year bonds - but is tax free in ISAs.

Meanwhile you get the opportunity to participate in the potential upside from the acquisition strategy, if and when it comes, with (hopefully) very little downside at this valuation.

[stemis] 08/1/2020 12:49

In the meantime I'm happy to collect decent dividends

1.4% yield?

In theory it's a great strategy. Buy up little operators on a modest multiple, strip out their central and owner costs and you've got a great earnings enhancement. Unfortunately it hasn't been working.

[cockerhoop] 08/1/2020 11:04

They are paying an additional unspecified sum for surplus working capital so you can't even accurately speculate on value based on companies house data.

The fact they aren't disclosing the metrics says it all imo - same old, same old.

[graham1ty] 08/1/2020 10:55

You cannot tell much from Companies House as LML only issues micro accounts.

In the year to May 2019, the balance sheet shows negligible fixed assets and Net Current Assets of £387,000. Total shareholders funds £394,000 so HMLH paying fractionally above NAV.

It does show that total assets fell from £467,000 the previous year to £394,000. This could be a c£75,000 loss last year, or could just be that Ballam paid himself a dividend. You cannot tell.

[rivaldo] 08/1/2020 08:37

I absolutely agree with you as regards past performance.

But I get the feeling from the tone and language in more recent releases that the promised synergies and economies of scale are at last within reach and may reap some or all of the hoped-for rewards.

In the meantime I'm happy to collect decent dividends and know that HMLH are on a theoretically very, very cheap rating, which may enable the share price to almost double from here from the point at which sentiment finally begins to improve.

And given the company's size and lack of available shares such a re-rating wouldn't take long to happen.

Anyway, the next trading update is in late April/early May, so at least it's good to have some positive news flow until then.

[graham1ty] 08/1/2020 08:05

QS look at the two pieces I wrote on HML on Stocko. The frustration has been around for a while.

These ( twenty) deals have NEVER visibly been accretive to earnings. The Faraday RNS in 2018 said that it made £249,000 in profit, yet group profit rose by just £161,000. Did they destroy value at Faraday or was the rest of the business failing ? Just one example

[qs99] 08/1/2020 07:57

am new to this stock, but often these small tuck in deals can be very accretive to earnings....let's see.

Graham, get your point as well, either they improve or market punishes them or shareholders kick management out.....

[graham1ty] 08/1/2020 07:54

They cannot resist further acquisitions. So, all the cash flow is used to grow revenue.

But since 2015 there have now been 20 acquisitions at a gross cost of £10.5m, and operating profit 1H 2015 vs 1H 2019 was up only £72,000, a disastrous conversion rate. Operating margin has fallen from 7.6% to 4.4%.

For ten years they have struggled to integrate new businesses and have NEVER produced economies of scale. One day they must stop acquiring, bed down everything they have got, and show what this might be worth.

Rivaldo, I know we disagree on HMLH. But until they can show margin improvement, and that they can generate greater profits from the greater scale....until then, the shares will languish below where they were five years ago ( unless Chris Mills engineers a lowball bid).

Good luck all

[qs99] 08/1/2020 07:21

Looks good

[rivaldo] 08/1/2020 07:17

Yet another acquisition from cash, this time for around £0.5m. Looks like one of those where the founder needs to sell out given that he's retiring after completion, so hopefully the price is an attractive one for HMLH:



"The Acquisition is in line with the Group's strategy of acquiring leasehold management businesses that can quickly be integrated into the Group and that provides further regional coverage. We are pleased to welcome all the team at LML into the HML Group."

[rivaldo] 02/1/2020 14:27

Nice to see the first trade of the year is a small buy at 34p - a full 1p above the 33p published offer price.

Let's hope 2020 is the year all those long-anticipated synergies come about and the shares re-rate to the 50p-60p where they "should" sit if that happens.