TIDMHLMA
RNS Number : 1380T
Halma PLC
16 March 2023
Trading update
Halma, the global group of life-saving technology companies
focused on growing a safer, cleaner, healthier future for everyone,
every day, today releases its scheduled trading update.
Good progress to date; expect Adjusted profit in line with
consensus
Halma has made good progress in the financial year to date.
Based on current trading and forecasts, the Board expects Adjusted
profit before tax for the year ending 31 March 2023 to be in line
with consensus market expectations (see notes 1 and 2).
Good organic constant currency revenue momentum
Revenue growth in the year to date has been strong and includes
good momentum on an organic constant currency basis, as well as a
benefit from recent acquisitions (net of disposals), and currency
translation (see note 3).
Our order book remains strong and our order intake is broadly in
line with revenue and ahead of the same period last year.
Organic constant currency revenue growth in all regions and
sectors
We have delivered organic constant currency revenue growth in
all sectors and regions in the year to date.
All sectors are expected to deliver strong revenue growth on a
reported basis for the full year. Sector revenue growth trends in
the second half of the year on an organic constant currency basis
have been broadly consistent with those seen in the first half.
Of the major regions, the USA and Mainland Europe have seen
strong organic constant currency revenue growth in the year to
date; their reported results will also benefit from recent
acquisitions and currency translation effects. The United Kingdom
also saw good growth, although its reported results will reflect
the disposal of a Safety sector business in the prior period. Asia
Pacific's organic constant currency revenue growth was modest,
reflecting a decline in China. Organic constant currency revenue
growth in the remaining smaller regions was strong in
aggregate.
Record investment in M&A; promising acquisition pipeline
We have made six acquisitions in the year to date across our
three sectors, investing a record maximum total consideration of
GBP264m (see note 4). These acquisitions, which include three new
standalone companies and three bolt-on acquisitions for existing
Halma companies, increase our technological capabilities and expand
our opportunities for future growth in line with our purpose of
growing a safer, cleaner, healthier future for everyone, every
day.
Our acquisition pipeline remains promising in all three sectors.
We continue to actively manage our portfolio of global businesses
to ensure that it remains aligned with our purpose and delivers
strong growth and returns.
Strong financial position; continue to expect stronger full year
cash conversion
Our strong balance sheet and continued cash generation underpin
our ongoing investment in growth. As expected, cash generation in
the second half of the year has been substantially higher than in
the first half, and therefore we continue to expect stronger cash
conversion at the full year than at the half year.
The Group's financial position remains strong. The cash
generative nature of our businesses has enabled us to support
record levels of investment in both organic growth and growth
through acquisitions, while ensuring modest balance sheet leverage
and retaining substantial capacity for investment in the
future.
Board succession
As previously announced, Steve Gunning joined Halma as Chief
Financial Officer on 16 January 2023 and Marc Ronchetti will take
over from Andrew Williams as Group Chief Executive on 1 April 2023
(see note 5).
Water for Life
In line with our purpose of growing a safer, cleaner, healthier
future for everyone, every day, we launched our Water for Life
charitable campaign in late 2020. We have worked in partnership
with WaterAid, the international water charity, with the aim of
improving access to clean water for villagers in two districts in
India. The campaign, which has now closed, has transformed the
lives of over 10,000 people in India by ensuring that they have
sustainable access to clean drinking water, thanks to projects
supported by our people and funds raised across Halma totalling
over GBP400,000.
Full Year Results
The results for the year ending 31 March 2023 will be released
on 15 June 2023.
For further information, please contact:
Halma plc
Andrew Williams, Group Chief Executive +44 (0)1494 721111
Marc Ronchetti, Group Chief Executive Designate
Steve Gunning, Group Chief Financial Officer
Charles King, Head of Investor Relations +44 (0) 7776 685948
Clayton Hirst, Director of Corporate Affairs +44 (0) 7384 796 013
MHP
Simon Hockridge / Rachel Farrington +44 (0)20 3128 8789 / 8613
/ Ollie Hoare / 8276
A copy of this announcement, together with other information
about Halma, is available at www.halma.com.
Notes:
1. Adjusted profit before tax is before amortisation and
impairment of acquired intangible assets, acquisition items,
restructuring costs and profit or loss on disposal of
businesses.
2. The Board believes current market forecasts for Adjusted
profit before tax for the year ending 31 March 2023 to be in the
range of GBP353.1m to GBP369.6m, with a consensus of GBP359.9m.
3. Sterling has weakened in the financial year relative to many
currencies, including the US Dollar and Euro and the currency
translation impact on the Group's results for the financial year
ending 31 March 2023 is expected to be positive. Based on the
forecast mix of currency denominated revenue and profit for the
2023 financial year, a 1% movement in the US Dollar changes full
year revenue by GBP9.2m and profit by GBP2.0m. Similarly, a 1%
movement in the Euro changes full year revenue by GBP2.1m and
profit by GBP0.4m.
4. Of the six acquisitions made in the year to date, those of
Deep Trekker, IZI Medical Products and WEETECH Holding were
reported in the Group's half year results announcement. Since that
time, we have made three further acquisitions (considerations given
are all on a cash- and debt-free basis):
-- Thermocable, a UK-based developer and manufacturer of linear
heat detectors, for a consideration of GBP22m, as a bolt-on for
Apollo Fire Detectors;
-- ZoneGreen Limited, a UK-based provider of complete rail depot
protection solutions, for GBP3m, as a bolt-on for our Sentric
interlocks business;
-- Ocean Insight has acquired technology from Rigaku Analytical
Devices that uses light to assess scrap aluminium quickly and
efficiently for recycling purposes, for an undisclosed sum.
5. As announced on 16 June 2022, Marc Ronchetti will succeed
Andrew Williams as Group Chief Executive from 1 April 2023. Andrew
will step down from his role as Group Chief Executive with effect
from 31 March 2023 and will remain as an Executive Director of the
Company until he retires from the Group on 30 June 2023.
6. This Trading Update is based upon unaudited management
accounts information. Forward-looking statements have been made by
the Directors in good faith using information available up until
the date that they approved this statement. Forward-looking
statements should be regarded with caution because of the inherent
uncertainties in economic trends and business risks.
7. A copy of this announcement, together with other information
about Halma, may be viewed on our website www.halma.com
About Halma
Halma is a global group of life-saving technology companies,
focused on growing a safer, cleaner, healthier future for everyone,
every day. Its purpose defines the three broad markets it operates
in:
-- Safety - Protecting people's safety and the environment as
populations grow, and enhancing worker safety.
-- Environment - Addressing the impacts of climate change,
pollution and waste, protecting life-critical resources and
supporting scientific research.
-- Health - Meeting the increasing demand for better healthcare
as chronic illness rises, driven by growing and ageing populations
and lifestyle changes.
It employs over 7,000 people in more than 20 countries, with
major operations in the UK, Mainland Europe, the USA and Asia
Pacific. Halma is listed on the London Stock Exchange (LON: HLMA)
and is a constituent of the FTSE 100 index.
For the past three years Halma has been named one of Britain's
Most Admired Companies by Management Today.
For more information www.halma.com
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END
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