Companies must still meet stringent health and safety standards, even during a recession, which explains why fire alarms and detectors maker Halma (HLMA) has just had a record first half.
Strip out profits from disposals and other one-offs and pre-tax profit grew 6 per cent to £60.8m. Encouragingly, the order book is still running ahead of revenue, too. Halma's health & analysis division stood out. Despite cutbacks in US government research, revenue there jumped 12 per cent to £135m and profit rose by a tenth to almost £31m. Leak detectors sold well, although water utilities are likely to spend less in the second half. Growth at the industrial safety unit was equally impressive, with Asia helping drive a 13 per cent increase in profit to £15.3m.
Across the divisions, sales to the Far East swelled by 17 per cent and by 32 per cent (to £18m) to China, where they're investing heavily in safety in public places and the workplace. Still, there's a long way to go and spending is expected to keep growing for another decade. Sales rose sharply in the US, too, but Europe struggled, which explains the drop in profits at the sensors business. Management expects better things in second half.
Numis Securities expects adjusted pre-tax profit of £127.9m this year, giving adjusted EPS of 25.9p (from £120.5m and 24.5p for 2012).
HALMA (HLMA) | ||||
|---|---|---|---|---|
| ORD PRICE: | 421p | MARKET VALUE: | £1.59bn | |
| TOUCH: | 420-421p | 12-MONTH HIGH: | 456p | Low: 308p |
| DIVIDEND YIELD: | 2.4% | PE RATIO: | 16 | |
| NET ASSET VALUE: | 107p* | NET DEBT: | 18% | |
| Half-year to 29 Sep | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2011 | 280 | 51.3 | 10.5 | 3.79 |
| 2012 | 298 | 62.2 | 13.1 | 4.06 |
| % change | +6 | +21 | +25 | +7 |
Ex-div: 2 Jan Payment: 6 Feb *Includes intangible assets of £387m, or 102p a share | ||||
