Property management services provider HML Holdings increased pre-tax profit by more than one-third to £1.03m in the year to March 2014.
Revenues increased by 15% to £14.8m. Organic growth was nearly 10% last year and the rest came from acquisitions. Net debt was £56,000 at the end of March 2014. A dividend of 0.27p a share will be paid this year, following a balance sheet restructuring.
If no further acquisitions are made then HML will have net cash next year. HML generates around £1m a year to finance acquisitions and it does not want to gear up significantly. Five acquisitions have been made in the past year for just over 1.1 times revenues of £3.1m. This includes the first business taken on by HML in north west England. The full benefits from these acquisitions will come through this year.
Pre-tax profit is forecast to improve to £1.3m. At 38p a share, HML is valued at £14.1m and the shares are trading on 12 times prospective 2014-15 earnings.
HML is still relatively small in a large but fragmented market. HML manages 44,000 properties. There are at least three million leasehold properties in the UK. As regulation tightens there is likely to be more consolidation in the sector. The Competition and Markets Authority recently started an investigation into practices within the residential property management market.
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