TIDMHLMA
RNS Number : 6634F
Halma PLC
23 March 2022
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, for the period from 1
October 2021 to date.
Good progress in the second half and substantial growth in the
year as a whole
Halma has made good progress in the second half of the financial
year to date. We continue to benefit from our strong purpose, our
diverse portfolio, and our resilient, long-term growth drivers.
These strategic qualities, together with the essential nature of
many of our products and services, have underpinned increasing
demand across the Group. The Board expects Adjusted profit before
taxation for the year ending 31 March 2022 to be in line with
market consensus expectations (see notes 1 and 2).
The Group is expected to deliver a further sequential
improvement in revenue in the second half of the year and
substantial revenue growth in the year as a whole. Order intake has
continued to be ahead of both revenue this year and order intake
for the same period last year.
As planned, we increased strategic investment in talent, new
product development, information technology and cybersecurity, to
support our growth over the longer term. We also saw a return of
discretionary overhead costs to support our current strong growth.
Therefore, as guided at the half-year, full year return on sales is
anticipated to be more in line with historical levels.
The agility of our business model has enabled our companies to
respond effectively to the range of operational challenges caused
by COVID-19 and, more recently, the effects of Russia's invasion of
Ukraine (see note 4).
The Group has a strong financial position, which enables
continued investment, both organically and by acquisition, to
support continued growth. Cash generation was solid, and reflected
the strong growth in the period and investment to maintain
resilience in our supply chain.
Organic constant currency revenue growth in all sectors and
major geographic regions
There was further organic constant currency revenue growth
across all sectors in the period, following a strong first half.
There was widespread growth geographically in the period, with the
strongest performances (on an organic constant currency basis) in
the USA and the UK, and good growth in Mainland Europe and Asia
Pacific.
The Environmental & Analysis sector has continued to deliver
strong organic constant currency revenue growth. This reflects
ongoing high demand for its products and services, particularly for
technologies that support the building of digital and data
infrastructure, and for gas monitoring products.
The Safety and Medical sectors are expected to report good
organic constant currency revenue growth, also against a strong
comparative. On a reported basis, the Medical sector's revenue
growth will also benefit from recent acquisitions, while the Safety
sector's progress will see the impact of the disposal of Texecom
made in the first half of the year.
The strength of Sterling is having a negative currency
translation effect on the Group's results (see note 5).
Further progress in M&A; healthy acquisition pipeline
We have made three further acquisitions in the second half of
the financial year, bringing the total number of acquisitions made
in the year to date to 13 for an aggregate maximum consideration of
GBP166 million (see note 6).
Our acquisition pipeline remains healthy 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.
Full Year Results
The results for the full year ending 31 March 2022 will be
released on Thursday 16 June 2022.
For further information, please contact:
Halma plc
Andrew Williams, Group Chief Executive +44 (0)1494 721111
Marc Ronchetti, 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
Andrew Jaques / Rachel Farrington +44 (0)20 3128 8613
A copy of this announcement, together with other information
about Halma, may be viewed on its website: www.halma.com
About Halma
Halma is a global group of life-saving technology companies,
focused on growing a safer, cleaner, healthier future for everyone,
every day.
Its purpose defines the three broad market areas where it
operates:
-- Safety: protecting life as populations grow and protecting worker safety.
-- Environment: addressing the impacts of climate change,
pollution and waste, protecting life-critical resources and
supporting scientific research.
-- Health: meeting rising healthcare demand as growing populations age and lifestyles change.
It employs over 7,000 people in more than 20 countries, with
major operations in the UK, Mainland Europe, the USA and Asia
Pacific. Halma is listed on the London Stock Exchange (LON: HLMA)
and is a constituent of the FTSE 100 index.
In January 2022, Halma was named one of Britain's Most Admired
Companies by Management Today.
Notes:
1: Adjusted profit before tax is before amortisation and
impairment of acquired intangible assets, acquisition items,
restructuring costs and profit or loss on disposal of
businesses.
2. The Board believes current market forecasts for Adjusted
profit before tax for the year ending 31 March 2022 to be in the
range of GBP300.7m to GBP313.4m, with a consensus of GBP306.5m.
3. This Trading Update is based upon unaudited management
accounts information. Forward-looking statements have been made by
the Directors in good faith using information available up until
the date that they approved this statement. Forward-looking
statements should be regarded with caution because of the inherent
uncertainties in economic trends and business risks.
4. Our direct operational exposure to Russia and Ukraine is low.
All Halma group companies have ceased sales into Russia following
its invasion of Ukraine and we have no companies, facilities or
direct employees in either country. In the current financial year,
sales to Russia have represented less than 0.5% of group revenues,
with revenue in Ukraine being insignificant. We have no significant
dependency on direct supplies of components or materials from
either Russia or Ukraine and, where we do have suppliers, we are
finding alternative sources.
Our thoughts are with everyone whose lives have been affected by
the Russian invasion of Ukraine. W e are supporting the employees
in our companies whose families are affected, as well as matching
any donations made by our companies and colleagues to the
International Committee of the Red Cross.
5. Sterling has strengthened in the year relative to many
currencies, including the US Dollar and Euro. If current exchange
rates continue throughout the rest of the current financial year,
the currency translation impact on the Group's results is expected
to be negative. Based on exchange rates of Sterling/US Dollar
1:1.37 and Sterling/Euro 1:1.18, we would expect approximately a
GBP41m negative revenue effect and approximately a GBP9m negative
profit effect, compared to the 2021 financial year.
6. We made ten acquisitions and a disposal in the first half of
the financial year, details of which are contained in our Half Year
Results announcement, which was released on 18 November 2021.
We have completed three acquisitions in the second half of the
year to date:
-- Clayborn Lab, a provider of custom heat tape solutions
primarily for heated sample lines in the environmental monitoring
market, for an initial cash consideration of US$4.5m (GBP3.3m) with
an additional earn-out consideration of US$1.5m (GBP1.1m);
-- Infinite Leap, a healthcare consulting and services provider
for real-time location technologies, for an initial cash
consideration of US$30m (approximately GBP22m), on a cash and debt
free basis, and additional earn-out considerations of up to an
aggregate maximum of US$17m (approximately GBP13m);
-- International Light Technologies, Inc., a leading developer
of technical lighting sources and light measurement systems for
US$26.6m (approximately GBP19.5m) on a cash and debt free
basis.
7. A copy of this announcement, together with other information
about Halma, may be viewed on its website at www.halma.com .
=================
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