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Halma beats expectations with full year growth
Halma, the safety product manufacturer, grew at double-digit rates last year and was confident that its updated growth strategy would allow further progress this year.
Sales in the year to 31 March, with revenues rising 12% to £1.08bn topping the £1bn mark for the first time and beat the £1.05bn City analyst consensus thanks to growth across all its sectors.
In the process safety unit revenues rose 11% and profits 8% to £185m and £43.4m; infrastructure safety revenues grew 11% and profit by 13% to £49m and £73.3m; sales in the medical sector grew 9% to £284m and profit by 0.4% to £67m; and the environmental & analysis unit grew revenue 18% to £259m and profit 32% to £55.
Altogether group adjusted profit before tax grew 10% to £213.7m and earnings per share 13% to 45.26p, to beat consensus forecasts of £212.3m and 43.35p EPS respectively.
The total dividend was lifted 7% to 14.68p.
Chief executive Andrew Williams hailed a year that saw the launch of the Halma 4.0 growth strategy, which adds new ways to grow the business through opportunities in digital technologies, and the group's promotion to the FTSE 100 index.
Helping growth along were five acquisitions made last year and Williams was encouraged to maintain a "healthy pipeline" of opportunities in the new financial year.
Halma's core acquisition strategy is to find privately-owned businesses operating in niches, which are aligned with the group's purpose of "Growing a safer, cleaner, healthier future for everyone, every day". Williams said the sector-focused organisational model allows the group to continue acquiring small-to-medium sized businesses, with a portfolio structure enabling easy integration of new additions, as well as mergers or sales of businesses should the longer-term market potential change adversely.
"This enables Halma to grow rapidly without becoming more complex," Williams said, having joined Halma in 1994 as a divisional director, been appointed as CEO in 2005 and seen revenue grow from £398m in 2008 to more than £1bn in a decade.
"Halma's market and geographic diversity, combined with the agility of our business model, will be important assets as accelerating technological and geopolitical change continues to impact individual regions and industries. Trading since the last financial year end has been positive, with order intake ahead of the order intake last year and revenue this year. We expect to continue to make progress in the coming year."
Shares in Halma touched a new all-time high above 1,450p in early trade but after almost an hour's trading were down a few pennies at 1,419p.
Broker Shore Capital said it was a strong set of results, noting that process safety had slowed slightly as expected from particularly strong first half, while the medical sector accelerated and environmental & analysis stood out as Asia Pacific and China specifically led growth in terms of geography, reflecting increased demand for safety and environmentally friendly processes.
Analysts noted the two new strands of the Halma 4.0 programme for new technologies, Convergence and Edge, focusing on internal and external innovation respectively.