The cleanest measure of Halma's (HLMA) performance for the half-year, adjusting for currency effects and a disparity in the trading period, was a 6 per cent increase in underlying revenues, a rate - according to Investec analysts - "that very few industrial companies are currently able to match".
All of the safety technology group's regions were up to muster, with Asia-Pacific the pick of the bunch, delivering 7 per cent organic revenue growth at fixed currencies. Three of the four business segments delivered on that basis, led by infrastructure safety, with only process safety (including gas detection and pipeline management) contracting over the period. The latter was a knock-on effect from continued weakness in natural resource markets, which contribute around 40 per cent of the division's revenues.
The group's adjusted return on sales was down on the 2015 comparative, a consequence of the inherent profit lag from a busy acquisition and investment schedule over the previous financial year. Capital expenditure was up 27 per cent on the back of projects in the infrastructure safety and medical segments, but a cash conversion rate of 84 per cent was broadly in line with the long-term target.
Investec expects cash profits and adjusted EPS of £224m and 39.2p, respectively, for the year ending March 2017 (from £195m and 34.3p in FY2016).
| HALMA (HLMA) | ||||
|---|---|---|---|---|
| ORD PRICE: | 1,034p | MARKET VALUE: | £3.92bn | |
| TOUCH: | 1,032p-1,035p | 12-MONTH HIGH: | 1,131p | LOW: 774p |
| DIVIDEND YIELD: | 1.3% | PE RATIO: | 35 | |
| NET ASSET VALUE: | 182p* | NET DEBT: | 34% | |
| Half-yearto 1 Oct | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2015† | 380 | 64.2 | 5.0 | 4.98 |
| 2016 | 442 | 65.2 | 5.3 | 5.33 |
| % change | +16 | +2 | +7 | +7 |
Ex-div: 29 Dec Payment: 8 Feb *Includes intangible assets of £822m, or 217p a share †27-week trading period to 3 Oct 2015 | ||||
