TIDMHLMA
RNS Number : 2609K
Halma PLC
21 April 2020
Halma today releases an update regarding the impact of the
COVID-19 pandemic.
Full Year Results announcement and AGM
We continue to expect our adjusted profit before tax for the
year ended 31 March 2020 to be in a range of GBP265 million to
GBP270 million, in line with the guidance given in our scheduled
Trading Update on 19 March 2020. We expect revenues to be
approximately GBP1,330 million and year-end net debt (excluding the
impact of IFRS16) to be approximately GBP320 million.
We expect to release our preliminary results on 14 July 2020.
This date has been agreed in consultation with our auditors,
PricewaterhouseCoopers LLP, and reflects the challenges of
completing the audit of a geographically dispersed group given the
travel restrictions and enhanced safe-working practices currently
in place. Accordingly, our AGM will take place in early September
2020.
Balance sheet and liquidity
Our financial position remains robust with committed facilities
totalling approximately GBP750 million (at current exchange rates).
The earliest maturity in these facilities is for GBP74 million (at
current exchange rates) in January 2021, with the remaining
maturities from 2023 onwards. The financial covenants on these
facilities are for leverage (net debt/adjusted EBITDA) to not be
more than three times and for adjusted interest cover to be not
less than four times.
Currently, we do not intend to utilise the UK government's COVID
Corporate Financing Facility, although we have taken the prudent
step of confirming Halma's eligibility in principle, subject to
establishing an appropriate commercial paper programme.
The impact of COVID-19 challenges and our responses
Halma has a long track record of successfully adapting to
societal shifts and changes in markets. We believe that our agile
business model, and our focus on critical safety, health, and
environmental market niches, will enable us to perform relatively
resiliently and contribute to the global efforts to deal with
COVID-19.
Operations
Partnering with our central and regional COVID-19 support
groups, the first of which was established in January 2020
following the initial outbreak in China, each of our companies is
implementing an operating plan to suit its market and local
circumstances.
Our 43 operating companies have a total of 54 principal
operating facilities spread across the UK, the USA, Mainland Europe
and Asia. Over 30 of our companies deliver critical safety,
healthcare and environmental protection solutions and have a
mandate or permission from regional or national authorities to
continue to operate during shutdown restrictions.
Currently, following the re-opening of our fire safety business
in Italy last week, there are only two facilities, in California
and Tunisia, that are closed due to government shutdown
restrictions. However, all our businesses are having to address
their specific supply chain and distribution challenges that are
being caused by the pandemic, as well as responding to the similar
challenges faced by their customers.
There has been a significant focus on ensuring a safe working
environment for all Halma company employees. Measures taken include
working from home wherever possible, a ban on non-essential travel
and visitors to facilities, increased spacing between workstations,
appropriate protective equipment, staggered shifts and breaks, plus
enhanced cleaning processes and contingency planning.
Customer needs
In accommodating these changes, our operational teams continue
to show exceptional commitment and dedication to ensure that
customer needs are met and to contribute to the global fight
against COVID-19 directly and indirectly. Examples include:
-- At least 10 companies from across every Halma sector are
using rapid prototyping capabilities to manufacture personal
protective equipment for health workers, in their local communities
and nationally in the UK, Europe and the USA.
-- Alicat, Perma Pure and Maxtec are making components for
ventilators and respiratory health devices for hospitals.
-- Diba and Bio-Chem are supplying parts which are used in new
medical diagnostic test instruments.
-- SunTech, Riester and Cardios are supplying primary care
devices to test the blood pressure and cardiac health of
patients.
-- CenTrak's technology is being used in healthcare facilities
and care homes to track the movement of people and ensure
compliance with hand hygiene regimes.
-- BEA is making sensors, including those specifically designed
for healthcare facilities, to ensure that doors can be opened and
closed automatically without human contact.
-- Our water businesses including HWM, Mini-Cam, Palintest,
Sensorex and UV companies are ensuring that water utilities can
preserve continuity of a safe supply to homes and critical
infrastructure.
-- Our fire businesses are helping to ensure that fire safety is
maintained in critical infrastructure across the world.
-- One of our most recent acquisitions, Sensit, is supporting
gas utilities in the USA to ensure that their residential supply
pipelines are safe.
Cost reduction and cash conservation measures
As in previous downturns, we have sought to act quickly to
mitigate potential impacts by reducing costs, optimising cash flow,
protecting liquidity and, where necessary, changing how we
operate.
These actions are expected to result in a cost reduction (net of
the cost to implement them) of over GBP20 million in the first
quarter of the new financial year, compared to the previous fourth
quarter's run-rate. We will review these mitigating actions at the
end of the first quarter.
We have sought to limit the impact of these actions on our
employees, and protect their employment, in anticipation of trading
conditions improving later in the financial year. Company, sector
and group leaders have agreed to temporary salary reductions from 1
April 2020 for an initial three-month period, demonstrating their
commitment to absorb a significant proportion of the cost savings
necessary to protect ongoing operations. This includes the Halma
plc Board and the Executive Board, both of which have agreed to a
20% reduction in salaries or fees. Whilst we have furloughed a
small percentage of our workforce, currently we intend to fund this
without any support from the UK government's Coronavirus Job
Retention Scheme.
We have implemented a widespread hiring freeze, a reduction in
the use of contractors and a significant reduction in discretionary
overhead spending. We are ensuring that our companies continue to
manage their working capital effectively, while maintaining
productive relationships with customers and suppliers. We are
limiting capital investment to essential projects and R&D only,
and do not expect to complete any acquisitions during the first
quarter, though our M&A search efforts are continuing.
The COVID-19 pandemic is expected to have a net adverse impact
on our markets and our full year financial results to 31 March
2021, which are likely to have a significant second half weighting
even though the timing and profile of recovery remains uncertain at
this stage.
Summary
In what are challenging and changing times, we have taken a
considerable number of actions to date and will continue to monitor
matters closely. We will provide a further update in our Full Year
results announcement.
Andrew Williams, Chief Executive of Halma, said:
"Through this current challenging period, many of our companies
are demonstrating how they are living Halma's purpose of 'growing a
safer, cleaner, healthier future for everyone, every day', by
supporting the fight against COVID-19 directly and indirectly.
"Our agile business model, strong positions in markets with
long-term growth drivers and the talent and dedication of our
people are expected to ensure that we will perform relatively
resiliently in the short term and be well positioned to resume
growth as markets recover."
For further information, please
contact:
Marc Ronchetti, Chief Financial
Officer +44 (0)7824 374 980
MHP Communications
Rachel Hirst +44 (0)20 3128 8763
Andrew Jaques +44 (0)20 3128 8769
About Halma
Halma is a global group of life-saving technology companies,
focused on growing a safer, cleaner and healthier future for people
worldwide. Our innovative products and solutions address many of
the key issues facing the world today. We operate in four sectors:
Process Safety, Infrastructure Safety, Medical and Environmental
& Analysis. We employ over 7,000 people in more than 20
countries, with major operations in the UK, Mainland Europe, the
USA and Asia-Pacific. We target global niche markets where
sustainable growth and high returns are supported by long-term
drivers. Halma is listed on the London Stock Exchange and has been
a member of the FTSE 100 index since December 2017.
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. This update is based upon current 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, including the
effects of the current COVID-19 outbreak.
3. A copy of this announcement, together with other information
about Halma, may be viewed on our website www.halma.com
Ends
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END
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