TIDMHLMA
RNS Number : 5177M
Halma PLC
22 September 2021
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 April
2021 to date.
Strong progress in the first half and improved guidance for the
full year
Halma has made strong progress in the first half of the
financial year, and the Group's financial performance has been
ahead of the Board's expectations, with revenue growth and return
on sales exceeding expectations and historic levels. Order intake
has been ahead of both revenue this year and of order intake for
the same period last year. This performance reflects the benefits
of the long-term growth drivers in our markets, the breadth of our
portfolio, and the agility of our business model which has enabled
our companies to respond rapidly to changing market conditions.
We expect to report strong organic constant currency revenue and
profit growth for the first half of the year, with profitability
benefitting from a slower-than-expected return of variable overhead
costs as restrictions due to the COVID pandemic have eased. This
performance compares to a weaker comparative period in the first
half of the 2020/21 financial year when we saw the largest impacts
from the pandemic.
We expect more typical rates of revenue growth and return on
sales in the second half of the year, with the latter more in line
with historic levels as variable overhead costs gradually return.
Although we expect to see continued impact on revenue, costs and
working capital from increased supply chain, logistics and labour
market disruption, we currently expect Adjusted profit before tax
for the full year to be slightly ahead of our previous guidance
(see Notes 1 and 2). Therefore, our results for the full year are
expected to be more weighted to the first half than in previous
years.
All sectors and major geographic regions delivered strong
organic constant currency growth
The Safety and Environmental & Analysis sectors reported the
strongest organic revenue and profit growth in the year to date,
with many companies experiencing significant increases in demand
because of a rebound in customer activity as the effects of the
COVID pandemic moderated.
The Medical sector also delivered strong growth, with revenue
benefiting from a recovery in demand for most products and services
related to elective healthcare procedures, which offset declining
demand for products and services directly related to COVID
diagnosis or treatment.
The Safety and Environmental & Analysis sectors saw a small
negative impact from recent disposals, net of acquisitions, while
the Medical sector benefited from recent acquisitions.
There was widespread growth geographically, with double-digit
percentage organic constant currency revenue increases in all major
regions. There was very strong organic constant currency growth in
the UK and Asia Pacific, while the USA and Mainland Europe also
grew strongly.
The strength of Sterling is having a negative currency
translation effect on the Group's results (see Note 4); we expect
this effect to reduce in the second half of the year.
Good progress in M&A, opportunities and resources for future
investment
We have made ten acquisitions in the financial year to date for
a maximum total consideration of GBP108 million. We also completed
the disposal of Texecom, for GBP65 million (see note 5), which
demonstrates our disciplined approach to portfolio management.
Cash generation remained good. This, together with Halma's
strong financial position, will support continued investment in
growth, both organically and by acquisition.
We have a healthy acquisition pipeline and continue to actively
manage our portfolio of global businesses to ensure that it is
aligned with our purpose of growing a safer, cleaner, healthier
future for everyone, every day, and continues to deliver strong
growth and returns over the long term.
Half Year Results
The results for the half year ending 30 September 2021 will be
released on Thursday 18 November 2021.
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: improving food and water quality, and monitoring air pollution.
-- 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 2021, Halma was named Britain's Most Admired Company
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 guidance given in our Full Year Results, which were
released on 10 June 2021, was as follows: "We currently expect to
deliver full year low double-digit percentage organic constant
currency profit growth (prior to any IAS 38 impact) and a more
normal level of return on sales."
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. Sterling has strengthened in the period 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 1.39
and Sterling/Euro 1.17, we would expect approximately a GBP53
million negative revenue effect and a GBP12 million negative profit
effect, compared to the 2021 financial year, of which approximately
two-thirds would occur in the first half of the financial year.
5. We made ten acquisitions and a disposal in the first half of
the financial year.
In April and May 2021, we completed six acquisitions (including
five bolt-on acquisitions), as previously announced in our Annual
Report and Accounts 2021, and as disclosed in note 32 to the
Accounts:
-- PeriGen, Inc., whose advanced technology protects mothers and
their unborn babies by alerting doctors, midwives and nurses to
potential problems during childbirth, was acquired for a cash
consideration of US$58 million (equivalent to approximately GBP42
million at the time of announcement) on a cash- and debt-free
basis.
-- Assets and IP associated with monitored safety valves from
FluidSentry Pty for A$0.6m (GBP0.3m) were added to Fortress
Interlocks.
-- Argus Security S.R.L. acquired its Italian distributor for EUR0.5m (GBP0.4m);
-- Anton Industrial Services, Crowcon's UK flue gas analyser
distribution partner, was purchased for GBP1.9m;
-- Orca GmbH, a German manufacturer of ultraviolet disinfection
systems, joined our UV Group of companies for a maximum
consideration of EUR8.7m (GBP7.5m);
-- RNK, a US-based digital stethoscope company, joined Riester
for a consideration of US$2.7m (GBP1.9m).
In August 2021, we announced that we had completed three
acquisitions:
-- the Ramtech group of companies, a UK-based supplier of
wireless fire systems for temporary sites, for a cash consideration
of GBP15.5 million, on a cash and debt free basis;
-- Dancutter A/S, a Danish designer and manufacturer of
trenchless pipeline rehabilitation equipment, for a cash
consideration of EUR18 million (equivalent to GBP15.4 million at
the time of announcement), on a cash and debt free basis;
-- Sensitron S.r.l., an Italian gas detection company, for a
cash consideration of EUR21 million (equivalent to GBP17.9 million
at the time of announcement), on a cash and debt free basis
In September 2021, we acquired Meditech Kft, a Hungarian
manufacturer of ambulatory blood pressure monitors and ECG Holter
devices, for a maximum total consideration of EUR6.0m
(approximately GBP5.1 million(6) ). It will be integrated with our
SunTech business.
In August 2021, we announced that we had completed the sale of
Texecom, a provider of electronic security systems, for a total
cash consideration of GBP65 million on a cash and debt free
basis.
6. At an exchange rate of Sterling:Euro 1.17.
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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END
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