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HML Holdings

  • BY: Andrew Hore |
  • POSTED: 13/11/2012 |

Residential property management services provider HML Holdings is growing organically and by acquisition and it will soon begin paying dividends.

HML is benefiting from being independent from landlords and property developers. This has helped it to win business from non-independent firms. HML has more than 33,000 units under management.

Revenues rose by one-quarter to £6.19m in the six months to September 2012. The majority of the growth came from the acquisition of Scotts of Putney but there was underlying growth. Despite the increase in the size of the group the central costs were slightly lower. Pre-tax profit improved from £246,000 to £403,000. Stripping out amortisation, the improvement was from £340,000 to £526,000, with around one-third of that improvement coming from organic profit growth.

Net debt is £305,000 and it could be wiped out by the end of March 2013. The gross debt of £776,000, which was taken on to buy Scotts, is being paid off at the rate of £82,000 per quarter.

House broker finnCap forecasts a full year profit of £800,000.

At 16p a share, HML is valued at £5.8m. The shares are trading on eight times prospective 2012-13 earnings.

HML is not expected to pay a dividend this year but next year a total payment of 0.27p a share is forecast.

The residential property management sector is fragmented and HML wants to be a consolidator. It will then be able to benefit from operating efficiencies. There are not many buyers in the market at the moment and price expectations are more realistic than a few years ago.

Download the latest AIM Journal from http://www.hubinvest.com/AIMPDFNovember2012_38.pdf

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