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Halma aided by acquired assets

The group completed two acquisitions following the end of the period
November 19, 2019

Halma (HLMA) shares recorded a double-digit increase in early trading as the self-proclaimed specialist in ‘life-saving technology’ experienced half-year profit growth across its four business arms.

IC TIP: Hold at 2,122p

Acquired assets played their part in the group’s revenue surge. Halma spent £89m on three deals in the half-year, with the acquisition of fire detection business Ampac in July driving contributions from the group’s infrastructure safety outfit. Halma has completed two further deals in the medical sector since the period-end. Over the next five to 10 years, chief executive Andrew Williams expects to make more acquisitions in the Asia Pacific region. “With that in mind, we’ve been investing over the last couple of years in building out our search effort in that region,” he says.

Halma also confirmed that it and the UK government had appealed against a European Commission ruling on corporate tax arrangements, which the commission has deemed partial state aid. The group expects the UK government to collect £16.3m from Halma over its second half – no provision will be required. 

Credit Suisse forecasts adjusted pre-tax profits of of £275.29m and EPS of 58.08p for the September 2020 year-end, rising to £294.39m and 61.73p in FY2021.

HALMA (HLMA)    
ORD PRICE:2,122pMARKET VALUE:£8.06bn
TOUCH:2,120-2,122p12-MONTH HIGH:2,129pLOW: 1,261p
DIVIDEND YIELD:0.8%PE RATIO:45
NET ASSET VALUE:281p*NET DEBT:24%**
Half-year to 30 SepTurnover (£m)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
201858694.519.76.11
201965410622.46.54
% change+12+12+14+7
Ex-div:23 Dec   
Payment:05 Feb   
*Includes intangible assets of £1bn, or 273p a share **Excludes lease liabilities of £57m