Trading update
Halma, the global group of life-saving technology companies focused on growing a safer, cleaner and healthier future, today releases its scheduled trading update.
Good progress in the first half and unchanged guidance for the full year
Halma has made good progress in the first half of the financial year to date, in line with the Board's expectations, even though the operational environment remains challenging. Our companies have continued to see strong demand for their products and services, with order intake strongly ahead of both revenue in the year to date and order intake for the same period last year. We expect to report good organic constant currency revenue growth in the first half of the year, against a very strong comparative period last year, and Return on Sales1 in line with levels typically seen in first halves of the years prior to the COVID pandemic.
Our guidance for revenue growth and Return on Sales1 for the full financial year to March 2023 is unchanged from that given in our results announcement in June3.
Our strong underlying cash generation and robust financial position is supporting increased strategic investment in future organic growth, as well as providing capacity to fund acquisitions and our progressive dividend policy. In the first half of the year, we expect our cash conversion to reflect further targeted investment in working capital to maintain supply chain resilience and support growth.
Good organic constant currency revenue growth in all sectors
All sectors have delivered good organic constant currency revenue growth in the year to date and have also benefited from recent acquisitions, with the largest inorganic contribution being in the Environmental & Analysis sector, and more modest benefits in the Safety and Healthcare sectors. The Safety sector's performance will also reflect the impact of the disposal of Texecom made in the first half of last year.
By geography, there has been organic constant currency revenue growth in the first half of this year in all major regions. The USA and Mainland Europe have delivered good organic constant currency revenue growth to date, while the UK and Asia Pacific have grown modestly against very strong comparatives. Organic constant currency revenue growth in the remaining smaller regions was strong in aggregate.
The depreciation of Sterling is having a positive currency translation effect on the Group's results; we expect this effect to continue in the second half of the year5.
Further progress in M&A; healthy acquisition pipeline
Following a very active 2021/22 financial year, in which we made 13 acquisitions, we made one acquisition in the first half of this financial year. In April, we acquired Deep Trekker, an Ontario-based manufacturer of remotely operated underwater robots used for inspection, surveying, analysis and maintenance for Can$60m (approximately £36m) on a cash and debt free basis.
We have a promising acquisition pipeline across all three sectors. We continue to actively manage our portfolio of global businesses to ensure that it continues to deliver strong growth and returns over the long term and is aligned with our purpose of growing a safer, cleaner, healthier future for everyone, every day.
Half Year Results
The results for the half year ending 30 September 2022 will be released on Thursday 17 November 2022.