It's hard to find fault with Halma (HLMA), the parent of a group of technology companies focused on niche sectors of global safety, health and environmental markets. This week it announced a final dividend increase of 5 per cent or above for the 37th consecutive year, following another strong set of results which detailed record revenues and profits.
The biggest contributor to that uplift was the US, Halma's largest single largest market, where revenues grew by 22 per cent thanks to an even mixture of favourable currency swings, organic growth and acquisitions. A $140m (£97m) deal in February to buy Pennsylvania-based CenTrak, a manufacturer of location-monitoring software in hospitals, made 2015-16 the most active year for M&A in the company's history, and bodes well for further top-line growth in the particularly buoyant medical sector.
Halma's decentralised operating structure means integrating these deals is a relatively straightforward process. Not that new companies don't benefit from investment: strong adjusted operating cash flows of £148.3m, equivalent to 86 per cent of adjusted operating profits, allowed the parent company to lift its R&D spend by nearly a fifth, to 5.1 per cent of group revenues.
Analysts at Investec expect normalised pre-tax profits of £182m in the year to March 2017, leading to EPS of 37.5p (from £166m and 34.3p in 2016).
HALMA (HLMA) | ||||
|---|---|---|---|---|
| ORD PRICE: | 933p | MARKET VALUE: | £3.53bn | |
| TOUCH: | 932-933p | 12-MONTH HIGH: | 961p | LOW: 708p |
| DIVIDEND YIELD: | 1.4% | PE RATIO: | 32 | |
| NET ASSET VALUE: | 171p* | NET DEBT: | 38% | |
| Year to 28 Mar | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 580 | 112 | 23.0 | 9.74 |
| 2013 | 619 | 120 | 24.8 | 10.43 |
| 2014 | 677 | 139 | 28.1 | 11.17 |
| 2015 | 726 | 134 | 27.5 | 11.96 |
| 2016^ | 808 | 136 | 28.8 | 12.81 |
| % change | +11 | +2 | +5 | +7 |
Ex-div:14 Jul Payment:17 Aug ^53 weeks to 2 April. *Includes intangible assets of £776m, or 205p a share. | ||||
