Health and safety technology specialist Halma delivered a flat first half, but still exceeded analysts' expectations. Chief executive Andrew Williams acknowledged that the market wasn't "giving any strong recovery" and, indeed, he isn't expecting recovery before the year-end. Nevertheless, 60 per cent of turnover is supported by health and safety regulations.
The UK, which generates 22 per cent of turnover, remained the weakest region and reported an 11 per cent revenue decline - although that operation has now stabilised. The US, however, grew sales 16 per cent. Markets outside the UK, US and continental Europe, though, saw revenues decline 3 per cent - these regions now account for 21 per cent of turnover and, longer term at least, do offer decent growth opportunities. That's especially the case in Asia as the region continues to adopt health and safety standards.
Internal restructuring, to reflect today's more difficult market conditions, remains on course to deliver annualised fixed cost savings of £15m and product cost savings of £5m by the year-end. And strong cash generation, tighter working capital control and lower tax payments helped Halma cut net debt to £21m from end-March's £51m, which provides headroom for acquisitions and increased dividend.
Broker UBS expects a full-year pre-tax profit of £70m and EPS of 13.6p.
| HALMA (HLMA) | ||||
|---|---|---|---|---|
| ORD PRICE: | 250p | MARKET VALUE: | £937m | |
| TOUCH: | 249-250p | 12-MONTH HIGH: | 244p | LOW: 141p |
| DIVIDEND YIELD: | 3.2% | PE RATIO: | 18 | |
| NET ASSET VALUE: | 79p* | NET DEBT: | 7% | |
| Half-year to 3 Oct | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2008 | 222 | 35.6 | 6.85 | 3.15 |
| 2009 | 222 | 35.4 | 6.87 | 3.31 |
| % change | - | -1 | - | +5 |
Ex-div: 6 Jan Payment: 10 Feb *Includes intangible assets of £228m, or 61p a share | ||||
