Halma PLC
21 September 2023
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 ahead of its half year end on 30 September 2023.
Further progress in the first half and unchanged guidance for the full year
We have made further progress in the first half of this financial year despite varied market conditions. Our guidance for the full year to March 2024, for good organic constant currency1 revenue growth and Return on Sales2 of approximately 20%, is unchanged from that given in our results announcement in June3.
We expect the balance of revenue and Adjusted profit before taxation4 between the first and second half of this financial year to be in line with pre-COVID historical averages5.
Accordingly, in the first half of the year, we expect good organic constant currency1 revenue growth against a strong comparative period last year, and Return on Sales2 towards the lower end of our target range.
Our cash performance is enabling continued investment, both organically and in acquisitions, to expand our opportunities for growth over the medium to longer term.
Continued progress in varied market conditions
We continue to benefit from the strength and relevance of our purpose, the agility and entrepreneurialism which we derive from our Sustainable Growth Model, and the diversity and global reach of our portfolio. These are enabling us to deliver continued progress in varied market conditions.
Group order intake is ahead of the comparable period last year and close to revenue in the year to date. Order intake in the Safety and Environmental & Analysis sectors is in line with revenue; the Healthcare sector has experienced slower order intake, with the effects of recovery from post-COVID disruptions resulting in destocking by OEM customers and budgetary pressures at healthcare providers.
Revenue by sector on an organic constant currency1 basis reflects order book trends, with stronger growth in the Safety and Environmental & Analysis sectors, and similar revenue to the first half of last year in the Healthcare sector. All sectors will benefit from recent acquisitions.
Return on Sales2 in the Safety and Healthcare sectors is expected to be higher in the first half of the year, relative to the comparable period last year. The Environmental & Analysis sector’s first half Return on Sales2 is expected to be lower due to mix effects.
By geography, the USA and Mainland Europe have delivered strong organic constant currency1 revenue growth, while the UK has grown modestly; together, these account for nearly 80% of Group revenue. Organic constant currency1 revenue performance in Asia Pacific was negative, reflecting declines in China, partially offset by a strong performance in Australasia.
The appreciation of Sterling is having a negative currency translation effect on the Group’s results; we expect this effect to continue in the second half of the year6.
Further progress in M&A; healthy acquisition pipeline
Following a record acquisition spend in the 2023 financial year, with seven acquisitions completed for a maximum total consideration of £397m, we made three acquisitions in the first half of this financial year for a maximum total consideration of £80m. We have a healthy 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 and is aligned with our purpose of growing a safer, cleaner, healthier future for everyone, every day. We made one small disposal, of our 70% stake in FireMate Software Pty. Ltd. (FireMate), for a total consideration of AUD8.4m (£4.3m), of which AUD2.1m (£1.1m) is deferred. Halma will retain FireMate’s Nimbus digital solution that enables remote connectivity for fire and evacuation systems.
In our Environmental & Analysis sector, we acquired Visual Imaging Resources LLC as a bolt-on to Minicam in April and Sewertronics Sp. Z o.o. as a standalone company in May; details of these acquisitions were previously reported in our Full Year 2023 results released in June. In August, we acquired Lazer Safe Pty. Ltd., an Australia-based designer and manufacturer of safety solutions for industrial press brake applications, for AUD45m (approximately £23m) on a cash and debt free basis, as a standalone company within the Safety sector.
Half Year Results
The results for the half year ending 30 September 2023 will be released on Thursday 16 November 2023.
For further information, please contact:
Halma plc
Marc Ronchetti, Group Chief Executive +44 (0)1494 721111
Steve Gunning, Chief Financial Officer
Charles King, Head of Investor Relations +44 (0) 7776 685948
Clayton Hirst, Director of Corporate Affairs +44 (0) 7384 796 013
MHP Communications
Oliver Hughes / Rachel Farrington / Ollie Hoare +44 (0)20 3128 8622 / 8613 / 8276