RNS Number:1704N
Myhome International PLC
04 February 2008
For immediate release
4 February 2008
Myhome International plc
("Myhome", "the Company" or "the Group")
PRELIMINARY RESULTS
Myhome, one of the UK's leading franchisors, is pleased to announce its audited
final results for the year to 30 September 2007.
HIGHLIGHTS OF THE YEAR
* 90% increase in turnover to �5,072,632 (2006: �2,664,712)
* 99% increase in profit before tax to �1,458,273 (2006: �733,787)
* 76% increase in earnings per share to 3.11p (2006: 1.77p)
* Net cash of �2.9m at year end (2006: �0.8m)
* Like for like royalty income up 47% in the second half of the year
* Total franchise territories at year end was 349 (2006: 290)
* Successful admission to AIM and two placings to raise over �7.5m
* Move to new corporate HQ - facilitating integration of Myhome's
operations
* Acquisition of Clean Team, Stainbusters, Ferrum, PlumbXpress and
ElecXpress franchise services
POST BALANCE SHEET HIGHLIGHTS
* Completion of the acquisition of the ChipsAway group - one of the UK's
leading automotive service franchisors
* Combined group now one of UK's largest franchisors, totalling over 750
franchisees, operating in 14 countries
* �8m new equity raised and �8m loan facility entered into with Lloyds
TSB Bank plc
* Rebranding of core home services commenced
* Management team and core infrastructure in place to achieve
significant organic growth and develop additional revenue streams from
the existing service portfolio
* Appointment of Neal Gossage as finance director, an experienced
director of listed and privately owned companies
Russell O'Connell, Chairman & CEO noted: "We are delighted to announce our
maiden full year results on AIM, in what has certainly been another extremely
busy year for the Group. We have completed our acquisition programme, as well as
moving to AIM and a relocating to a new corporate HQ in Esher. At the same time,
we have reported a doubling in pre-tax profit and a significant improvement in
earnings per share. The focus moving forward will be on increasing the quality
of earnings and building our like for like returns as Myhome rebrands and
exploits its cross selling opportunities.
I would again like to thank our shareholders, franchise partners, customers and
staff for their continued support during a very active and productive year."
ENQUIRIES
Myhome International plc 01372 471 573
Russell O'Connell
Noble & Company Limited 020 7763 2200
Nick Naylor/Alastair Maclachlan
Bishopsgate Communications Limited 020 7562 3350
Nick Rome / Maxine Barnes
CHAIRMAN'S STATEMENT
The Board is pleased to announce that the Group achieved a 90% increase in
turnover to �5.1m (2006: �2.7m) and that profit on ordinary activities before
tax for the year to 30 September 2007 increased by 99% to �1,458,273 (2006:
�733,787). Basic earnings per share increased by 76% to 3.11p (2006: 1.77p).
Whilst the Board is not recommending a dividend at this stage, it is considering
the payment of a maiden dividend if the results for the year to 30 September
2008 meet expectations. The report and accounts and notice of the AGM will be
sent to shareholders during February 2008.
ACQUISITIONS
During the year, Myhome successfully completed the acquisition of a number of
franchised services including window cleaning, carpet cleaning, plumbing,
electrical and ironing. These acquisitions were funded through a mixture of
equity and cash. Much of the final consideration is based on the future
performance of the businesses.
The acquisition of the ChipsAway group took place in November 2007, and is
therefore not reflected in the results for the year. The ChipsAway group has
over 400 franchisees and is a leading operator in the UK automotive services
industry, the fastest growing franchising sector in the United Kingdom.
ChipsAway provides a mobile service to customers' homes and offices, repairing
scratches, chips and other minor damage to car paintwork using proprietary
technology. The ChipsAway group also includes Professional Car Cleaning ("PCC"),
a mobile valeting service. Based in Kidderminster, the ChipsAway group is
operated by an experienced management team, which has remained in place
following the acquisition.
INVESTMENT AND FINANCING
In the year ended 30 September 2007, the Company raised �7.57 million through
the issue of new shares in two financing rounds to support the acquisition and
growth strategy.
Shortly after the financial year end, the Company also secured an �8.0 million
loan facility with Lloyds TSB Bank plc and a further �8.0 million of equity
finance through the issue of new shares to complete the acquisition of the
ChipsAway group. This transaction has helped the enlarged Myhome Group to become
one of the largest franchisors in the UK.
For this, the largest acquisition to date, the Company used debt finance for the
first time to fund part of the consideration in order to maximise returns for
shareholders.
As at 30 September 2007 the Group had net cash of �2.9 million.
STRATEGY AND BUSINESS DEVELOPMENT
Myhome continues to develop its international multi-service franchise network
for premium residential and automotive services. During 2007, the Company
focused on the second phase of its strategic plan, by pursuing acquisition-led
growth in order to expand its multi-service Group of franchise companies
providing home services to its "cash rich, time poor" customers.
The portfolio of services offered by the Group has been expanded by the
acquisition of the Clean Team, Stainbusters, Ferrum, PlumbXpress and ElecXpress
franchise brands during the year. It was further augmented by the acquisition of
the ChipsAway group in November 2007. This purchase completed the acquisition
phase of our strategy for growth.
The original franchise portfolio of Myhome Clean, Nicenstripy, Ovenclean,
Surface Doctor and Autosheen have continued to deliver organic growth by
recruiting franchisees both nationally and internationally. As underlying
franchisees have continued to grow their businesses, network turnover has
increased, resulting in growth in royalty income of over 47% in the second half
of the year.
The Company has now entered the third phase of its strategic plan - the
integration of its businesses and the acceleration of organic growth. Myhome's
businesses have been consolidated into two operating divisions: home services,
based in Esher, and automotive services, based in Kidderminster. The Company has
already transferred its existing car-valeting business, Autosheen, to
Kidderminster to create a specialist automotive division alongside ChipsAway and
PCC. The automotive and home services divisions will be led by Lloyd Evans and
David Moody respectively who will report directly to the plc Board.
Across the Group we are positioning our businesses for organic growth by
consolidating many of our businesses under the core Myhome brand and by
committing resources to a cross-selling programme to our "cash rich, time poor"
customers.
We are in the process of rebranding home services under the Myhome trademark to
provide a single distinctive identity. This offers several important benefits,
including improved brand value through greater customer awareness, easier cross
selling and greater economies of scale.
We will shortly be launching a lifestyle magazine, "Myhome", which will promote
the individual services on offer within the Group to prospective customers thus
further facilitating cross-selling of services amongst existing clientele. This
will stimulate customer demand for these services and raise the profile of the
Myhome brand. The magazine will have an initial circulation of 25,000 and will
be distributed twice a year via our franchise network to private householders
and other public places such as doctor/dentist surgeries, estate/letting agents
and gyms
The content of the Myhome magazine will be mirrored online at a new website,
www.myhome.com. We plan to develop this site into a major portal providing
visitors with access to the full range of Myhome services, as well as other
related products such as financial services and insurance.
Another area where we expect to grow in the future is overseas. The Company
currently licenses Master Franchisees in 14 countries, including Australia,
Greece, Ireland and Russia. Further licences will be awarded to similar Master
Franchisees deemed to have the experience and resources to develop successful
Myhome businesses in other countries.
BOARD STRUCTURE
The Board is delighted to welcome Neal Gossage as Finance Director, with effect
from 4th February 2008. Neal's experience of growth companies and his track
record as finance director of public companies significantly strengthens the
Board and the Group's finance function.
In keeping with best practice corporate governance, the roles of Chairman and
CEO will be separated. Consequently, the Board is seeking to appoint a
non-executive Chairman during 2008.
CURRENT TRADING AND OUTLOOK
After a slower than anticipated start to the new financial year, due in part to
the completion of the ChipsAway acquisition, the Board expects the financial
performance of the Company to be lower than initially expected in 2008.
Following the completion of the acquisition and integration of the Company's
separate business, the Board now expect franchise recruitment activity to
increase significantly from the second quarter onwards, as the benefits of the
rebranding and the two franchise exhibitions in January and March 2008 filter
through.
The Board is pleased to note that evidence from our franchise network shows that
the consumer spending slowdown currently affecting the UK retail sector has not
had an impact on the demand for Myhome services. Indeed, customer recruitment
and retention, and therefore underlying royalties and product sales, have
continued to grow steadily throughout the first quarter of the current financial
year.
The Board is now well advanced in the integration of the acquisitions and looks
forward to delivering further improvements in performance in 2008.
Russell O'Connell
Chairman & CEO
Consolidated income statement for the year ended 30 September 2007
30.9.07 30.9.06
Notes � �
CONTINUING OPERATIONS
Revenue 5,072,632 2,664,712
Cost of sales (457,936) (529,038)
GROSS PROFIT 4,614,696 2,135,674
Other operating income - 23,370
Administrative expenses (3,159,673) (1,417,230)
OPERATING PROFIT 1,455,023 741,814
Finance costs (120,398) (13,240)
Finance income 123,648 5,213
PROFIT BEFORE TAX 1,458,273 733,787
Tax 2 (69,737) (212,680)
PROFIT FOR THE YEAR 1,388,536 521,107
Attributable to:
Equity holders of the parent 1,388,536 521,107
Earnings per share expressed
in pence per share:
Basic 3 3.11 1.77
Diluted 3 2.44 1.59
Consolidated balance sheet
30 September 2007
30.9.07 30.9.06
Notes � �
ASSETS
NON-CURRENT ASSETS
Intangible assets on acquisition 13,182,104 4,374,097
Intangible assets 669,500 252,643
Property, plant and equipment 2,117,986 385,480
Investments 100,000 100,000
16,069,590 5,112,220
CURRENT ASSETS
Inventories 126,807 11,750
Trade and other receivables 3,052,892 2,018,747
Cash and cash equivalents 2,948,781 808,481
6,128,480 2,838,978
LIABILITIES
CURRENT LIABILITIES
Trade and other payables 2,105,290 1,675,206
Financial liabilities - borrowings
Interest bearing loans and borrowings 139,935 118,615
Tax payable 170,631 3,743
2,415,856 1,797,564
NET CURRENT ASSETS 3,712,624 1,041,414
NON-CURRENT LIABILITIES
Trade and other payables 4,625,000 375,000
Financial liabilities - borrowings
Interest bearing loans and borrowings 1,377,341 627,555
6,002,341 1,002,555
NET ASSETS 13,779,873 5,151,079
SHAREHOLDERS' EQUITY
Called up share capital 6 2,534,401 1,731,314
Share premium 7 9,897,476 3,468,263
Other reserves 7 7,958 -
Retained earnings 7 1,340,038 (48,498)
Total equity 13,779,873 5,151,079
TOTAL EQUITY 13,779,873 5,151,079
Consolidated cash flow statement
for the year ended 30 September 2007
30.9.07 30.9.06
� �
Cash flows from operating activities
Cash generated from operations (2,516,110) 1,371,625
Interest paid (101,388) (86)
Interest element of hire purchase payments paid (19,010) (13,154)
Tax paid 158,449 3,743
Net cash from operating activities (2,478,059) 1,362,128
Cash flows from investing activities
Acquisition of subsidiaries net of cash (1,000,507) (3,214,349)
Purchase of intangible fixed assets (491,245) (252,643)
Purchase of tangible fixed assets (1,922,233) (329,874)
Sale of tangible fixed assets 4,151 35,157
Interest received 123,648 5,213
Net cash from investing activities (3,286,186) (3,756,496)
Cash flows from financing activities
New loans in year 821,682 500,000
Loan repayments in year - 1,708
Capital repayments in year (50,576) 157,118
Amount introduced by directors 1,139 -
Share issue 7,132,300 2,175,457
Net cash from financing activities 7,904,545 2,834,283
Increase in cash and cash equivalents 2,140,300 439,915
Cash and cash equivalents at beginning of year 808,481 368,566
Cash and cash equivalents at end of year 2,948,781 808,481
Notes to the financial statements
1 BASIS OF PREPARATION
The preliminary results were approved by the Board of Directors on 2 February
2008. The financial information set out in this announcement does not constitute
the Company's statutory financial statements for the year ended 30 September
2006 or 30 September 2007, but is derived from those financial statements. The
financial information for the year ended 30 September 2007 has been prepared
using accounting policies which are consistent with those adopted in preparing
the financial statement for the year ended 30 September 2006. The auditors have
reported on the 2006 financial statements; their report was unqualified and did
not contain a statement under section 237(2) or (3) of the Companies Act 1985.
The auditors have yet to sign their report on the 2007 accounts. The statutory
financial statements for the year ended 30 September 2007 will be finalised on
the basis of the financial information presented by the Directors in this
preliminary announcement and will be delivered to the Registrar of Companies
following the Company's Annual General Meeting.
The Directors do not recommend the payment of a dividend.
2 TAX
Factors affecting the tax charge
The tax assessed for the year is lower than the standard rate of corporation tax
in the UK. The difference is explained below:
30.9.07 30.9.06
� �
Profit on ordinary activities before tax 1,458,273 733,787
Profit on ordinary activities multiplied by the 437,482 220,136
standard rate of corporation tax in the UK of 30% (2006
- 30%)
Effects of:
Utilisation of previously unrecognised tax losses (247,954) (9,175)
Expenses not deductible 39,665 40,022
Capital allowances claimed (68,748) (38,303)
Prior year overprovision of tax (90,708) -
Total tax 69,737 212,680
3 EARNINGS PER SHARE
Basic earnings per share is calculated by dividing the earnings attributable to
ordinary shareholders by the weighted average number of ordinary shares
outstanding during the period.
Diluted earnings per share is calculated using the weighted average number of
shares adjusted to assume the conversion of all dilutive potential ordinary
shares.
Reconciliations are set out below:
30.9.07
Earnings Weighted
� average Earnings
number of per share
shares in pence
Basic EPS
Earnings attributable to ordinary 1,388,536 44,622,998 3.11
shareholders
Effect of dilutive securities
Options - 12,195,548 -
Diluted EPS
Adjusted earnings 1,388,536 56,818,546 2.44
30.9.06
Earnings Weighted
� average Earnings per
number of share in
shares pence
Basic EPS
Earnings attributable to ordinary 521,107 29,453,970 1.77
shareholders
Effect of dilutive securities
Options - 3,300,000 -
Diluted EPS
Adjusted earnings 521,107 32,753,970 1.59
4 ACQUISITION OF BUSINESSES
During the year the company acquired the following businesses:
Principal Date of % of shares
Name of business acquired activity acquisition acquired
Clean Team ( Windows ) Ltd Window cleaning 1 May 2007 100
("CT")
Stainbusters Ltd Carpet cleaning 22 June 2007 100
("SB")
Ferrum UK Group Ltd Ironing and dry 29 June 2007 100
("FE") cleaning
DSH Services Ltd Plumbing 30 July 2007 100
("DSH")
Components of the Acquisitions
CT SB FE DSH
� � � �
Cash 195,000 110,000 400,000 228,250
Equity instruments issued - - 100,000 -
Directly attributable acquisition 18,365 30,174 36,956 25,500
costs
Deferred consideration 1,500,000 250,000 - 3,950,000
TOTAL 1,713,365 390,174 536,956 4,203,750
Note
Currently there is �1,500,000 of deferred consideration not recognised in these
accounts which could become payable upon targets being met.
Net assets acquired Fair value prior to acquisition
CT SB FE DSH
� � � �
Current Assets
Stock - 31,631 - -
Cash (2,320) (52,049) (63,597) (100)
Trade receivables 19,375 102,778 28,834 -
Non Current Assets
Property plant & equipment 46,875 7,753 5,268 5,095
Intangible assets - - 872,427 -
Current Liabilities
Trade payables (310,791) (464,074) (500,956) (316,874)
Bank overdraft (1,480) (54,423) - -
Non Current liabilities
Payable greater than 1 year - - (216,624) -
Net Assets Acquired (248,341) (428,384) 125,352 (311,879)
Purchase consideration 213,366 140,174 536,958 253,750
Deferred consideration 1,500,000 250,000 - 3,950,000
Intangible assets on acquisition 1,961,707 818,558 411,606 4,515,629
5 POST BALANCE SHEET EVENTS
On 7 November 2007 the company purchased Edwin Investments Limited (ChipsAway)
for �16 million. ChipsAway is a leading franchise operator in the automotive
industry with over 400 franchisees spread over 13 countries.
Details of the acquisition were as follows:
�
Fundraising 8,000,000
Bank loan 8,000,000
16,000,000
Net assets of Edwin 6,116,000
Intangible assets on acquisition 9,884,000
The acquisition means the enlarged group will have over 800 franchisees and a
combined network turnover of over �80 million. This would make Myhome one of the
largest franchisors in the UK.
6 CALLED UP SHARE CAPITAL
Allotted, issued and fully
paid:
30.9.07 30.9.06
Number � Number �
Ordinary 5 pence shares 50,688,020 2,534,401 34,626,280 1,731,314
7 RESERVES
Group
Retained Share premium Other Totals
earnings reserves
At 1 October 2006 (48,498) 3,468,263 - 3,419,765
Profit for the year 1,388,536 - - 1,388,536
Cash share issue - 7,172,162 - 7,172,162
Share issue costs - (743,949) - (743,949)
Other reserves - - 7,958 7,958
At 30 September 2007 1,340,038 9,897,476 7,958 11,245,472
Other reserves comprises �7,958 provision for share based payments in the year
(2006: Nil )
8 RECONCILIATION OF PROFIT BEFORE TAX TO CASH GENERATED FROM OPERATIONS
30.9.07 30.9.06
� �
Profit before tax 1,458,273 733,787
Depreciation charges 196,530 126,706
Loss on disposal of fixed assets 2,135 1,143
Finance costs 120,398 13,240
Finance income (123,648) (5,213)
1,653,688 869,663
Increase in inventories (115,057) (11,750)
Increase in trade and other receivables (1,448,949) (1,419,474)
Increase/(decrease) in trade and other payables (2,613,750) 1,933,186
Share based payment 7,958 -
Cash generated from operations (2,516,110) 1,371,625
This information is provided by RNS
The company news service from the London Stock Exchange
END
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