TIDMHLMA
RNS Number : 1335N
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 currency(1)
revenue growth and Return on Sales(2) of approximately 20%, is
unchanged from that given in our results announcement in June(3)
.
We expect the balance of revenue and Adjusted profit before
taxation(4) between the first and second half of this financial
year to be in line with pre-COVID historical averages(5) .
Accordingly, in the first half of the year, we expect good
organic constant currency(1) revenue growth against a strong
comparative period last year, and Return on Sales(2) 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 currency(1) 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 Sales(2) 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 Sales(2) is expected to be lower due
to mix effects.
By geography, the USA and Mainland Europe have delivered strong
organic constant currency(1) revenue growth, while the UK has grown
modestly; together, these account for nearly 80% of Group revenue.
Organic constant currency(1) 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 year(6) .
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 GBP397m, we made three acquisitions in the first half of this
financial year for a maximum total consideration of GBP80m. 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 (GBP4.3m), of
which AUD2.1m (GBP1.1m) 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 GBP23m) 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
Notes:
1. Organic constant currency measures exclude the effect of
movements in foreign exchange rates on the translation of revenue
and profit into Sterling, as well as acquisitions in the year
following completion and disposals.
2. Return on Sales is defined as Adjusted profit before
taxation(4) from continuing operations expressed as a percentage of
revenue from continuing operations.
3. The following guidance was given in our Full Year 2023
results announcement in June 2023: "Based on current market
conditions, we expect to deliver good organic constant currency(1)
revenue growth in the year ahead, and Return on Sales(2) to
increase to approximately 20%."
4. Adjusted profit before taxation is before amortisation and
impairment of acquired intangible assets, acquisition items, and
profit or loss on disposal of businesses.
5. In the five financial years from 2016/17 to 2020/21, Halma
delivered on average 48% of its annual revenue in the first half of
the year, and 45% of its Adjusted profit before taxation(4) .
6. 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
1:1.26 and Sterling/Euro 1:1.17, we would expect approximately a
GBP55m negative revenue effect and approximately a GBP13m negative
profit effect in the 2024 financial year, compared to the 2023
financial year, of which approximately 30% would occur in the first
half of the financial year.
7. 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.
8. A copy of this announcement, together with other information
about Halma, may be viewed on its website at 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 people's safety and the environment as
populations grow, and enhancing worker safety.
-- Environment - Addressing the impacts of climate change,
pollution and waste, protecting life-critical resources and
supporting scientific research.
-- Health - Meeting the increasing demand for better healthcare
as chronic illness rises, driven by growing and ageing populations
and lifestyle changes.
Halma employs over 8,000 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.
Halma has been named as one of Britain's Most Admired Companies
for the past five years.
For more information www.halma.com
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