Weaker global economic growth and currency headwinds were unable to stop Halma (HLMA) posting record revenues and profits at the half-year mark. The industrial technology company lifted its dividend by more than 5 per cent for the 35th consecutive year. Chief executive Andrew Williams told us a key ingredient of the company's success was its focus on long-term social developments. Exposure to health, safety and environmental legislation helps protect Halma from the ups and downs of the business cycle.
Every regional market grew organically at constant currencies. The US was particularly strong, thanks to demand for safer shale-gas exploration. Sales in Halma's Process Safety division rose 11 per cent, boosted by the May acquisition of Rohrback Cosasco Systems.
The division's establishment of a commercial hub in Brazil also helped increase Halma's emerging-market exposure. Revenues from outside its traditional home markets in the US, UK and Europe now account for 26.5 per cent of the total, but there's a 30 per cent target for next year.
The only division to shrink during the period was Environmental & Analysis. Lower demand from UK water utilities and delays to a US contract cut profits by more than a fifth. But management expect performance to bounce back in the second half.
Broker Investec expects adjusted pre-tax profit of £151m for the current financial year, giving EPS of 30.8p - up from £140m and 28.5p.
| HALMA (HLMA) | ||||
|---|---|---|---|---|
| ORD PRICE: | 654p | MARKET VALUE: | £2.48bn | |
| TOUCH: | 653p-654p | 12-MONTH HIGH: | 654p | LOW: 553p |
| DIVIDEND YIELD: | 1.8% | PE RATIO: | 23 | |
| NET ASSET VALUE: | 131p* | NET DEBT: | 27% | |
| Half-year to 27 Sep | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2013 (restated) | 333 | 55.9 | 11.3 | 4.35 |
| 2014 | 341 | 61.2 | 12.6 | 4.65 |
| % change | +2 | +9 | +11 | +7 |
Ex-div: 29 Dec Payment: 4 Feb *Includes intangible assets of £524m, or 138p a share | ||||
