Halma's latest results offered up few surprises as record revenue and profit across the board seem almost par for the course these days. But it was a solid performance nonetheless and marked the 34th time in the past 36 years that the engineering group has posted a profit in the first half – testament to the defensive nature of the business.
A 17 per cent jump in group underlying profit before tax to £57.5m was aided by the acquisition of Medicel, the Swiss business bought by Halma in March, which helped drive operating profit up 26 per cent to £28m in the health and analysis division. Selling leak detection devices to UK water utilities also proved lucrative, offsetting a "blip in demand" in fluid technology following Danaher's recent acquisition of Halma customer Beckman Coulter.
Twenty per cent profit growth in the industrial safety business also impressed, although a difficult period in US and UK elevator safety and security sensors held back the infrastructure sensors unit. Growth came from all regions, although a 29 per cent increase meant China led the pack. Halma wants China to contribute 10 per cent of sales by 2015 and the international business to account for 30 per cent, up from 23 per cent now.
Broker Peel Hunt expects full-year adjusted EPS of 23.9p (20.6p in 2011).
HALMA (HLMA) | ||||
|---|---|---|---|---|
| ORD PRICE: | 317p | MARKET VALUE: | £1.19bn | |
| TOUCH: | 315-317p | 12-MONTH HIGH: | 432p | Low: 305p |
| DIVIDEND YIELD: | 3% | PE RATIO: | 16 | |
| NET ASSET VALUE: | 97p* | NET DEBT: | 15% | |
| Half-year to 1 Oct | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2010 | 249 | 47.3 | 9.38 | 3.54 |
| 2011 | 280 | 51.3 | 10.5 | 3.79 |
| % change | +12 | +8 | +12 | +7 |
Ex-div: 4 Jan Payment: 8 Feb *Includes intangible assets of £353.7m, or 94p a share | ||||
