Safety equipment manufacturer Halma (HLMA) hasn’t been left unscathed by Covid-19 – back in March, the group said it was expecting adjusted pre-tax profit of £265m-270m for the year ending 31 March, falling short of consensus analyst expectations at the time of £275m. This would, however, still be an improvement from the £246m seen a year earlier.
Halma is guiding that the pandemic will have a “net adverse impact” on its current financial year, with performance weighted towards the second half. In response to the crisis, it is looking to save over £20m in the first quarter and does not expect to complete any acquisitions during this period.
There’s been no word yet on whether the dividend will survive – something we’ll be looking out for when the group’s full year results are released on 14 July. Shareholders have thus far enjoyed 40 consecutive years of dividend growth. Halma should have sufficient liquidity to withstand this crisis, with access to £750m of committed borrowing facilities.
This stock has been a long-term performer for investors. The shares have now returned to above their ‘Corona-crunch’ levels and are continuing their march upwards. It’s not difficult to see why – its focus on niche markets with high regulatory requirements offers high barriers to entry and reduces cyclical exposure.
