Halma is a global group of life-saving technology companies, focused on growing a safer, cleaner, healthier future for everyone, every day. The company is a member of the FTSE100 and has market cap of over £9bn. The share price chart over the long term reads from bottom left to top right – why is that? We welcomed Charles King, head of investor relations to a ShareSoc/Yellowstone Advisory webinar to give an overview of the company. A recording of the webinar is available here.
The opening slide showed charts of revenue and profit growth over the last 10 years. Both have compounded strongly with sales growing 11% CAGR and profits at 12% CAGR, effectively meaning they double every 6 years. In total the group comprises 40 operating companies employing 7000 people across 20 different countries and selling into 50 countries. The businesses operate in three areas: Safety, Environmental and Health – all chosen as they have good long term growth characteristics.
One of their biggest businesses operates in fire detection across the US, Europe and the UK. Their fire detectors protect an area twice the size of Luxembourg to give an example of the scale of the business. Another example of the type of business they are in is leak detection where they provide technology that monitors leaks and water pressure helping to save their customers billions of gallons of water each year. Businesses that are acquired generally keep their name although they may describe themselves as a Halma Group company.
One of the things that came across in the presentation is that Halma has a very clear approach to everything they do and Charles walked through the various steps and stages that are important to the company. Halma has created a lot of value over the years and their approach to Value Creation has five components. The starting point is that everything must contribute towards a safer, cleaner or healthier world. The strategy is to acquire and grow companies in markets with good underlying growth characteristics. The individual businesses are given autonomy and are set challenging aspirational targets – namely to double profits every 5 years. As a group they are achieving this every six years. Finally there is a robust culture which is supportive, accountable and collaborative and allows the individual companies to manage their businesses.
Looking in more detail about how growth is achieved there…
