REG - Halma PLC - Trading Update

HalmaAnnouncement

14/03/2024 07:00

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RNS Number : 7765G  Halma PLC  14 March 2024

Halma plc

Trading update

14 March 2024

Unchanged guidance for full year

 

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, ahead of its financial year end on 31 March 2024.

 

Further progress in the second half

We have made further progress in the second half of this financial year to
date, delivering strong growth in varied market conditions, while continuing
to make substantial strategic investments to enhance our future growth
opportunities.

 

Our performance in the period reflects the benefits of the diversity and
global reach of our portfolio, and the agility of our operating model which
enables our companies to respond rapidly to opportunities and challenges in
their individual markets. It also continues to be supported by the relevance
of our purpose, the strength of our Sustainable Growth Model and our financial
model, and the long-term drivers underpinning growth in our markets.

 

Unchanged guidance for full year; expect Adjusted profit in line with
consensus

Based on this progress to date and current forecasts, our guidance for the
year ending 31 March 2024 is unchanged from that given in our Half Year
results announcement of 16 November 2023. The Board continues to expect
Adjusted profit before tax for this period to be in line with analyst
consensus expectations (see notes 1 and 2).

 

Strong constant currency revenue growth

We have delivered strong constant currency revenue growth in the year to date,
comprising good momentum on an organic constant currency basis and a continued
healthy contribution from recent acquisitions (net of disposals).

 

By sector, Environmental & Analysis has delivered strong revenue growth in
the year to date, driven primarily by exceptionally strong growth in the
Photonics segment within the Optical Analysis subsector. There was good
revenue growth in the Safety sector, reflecting strength in the Fire Safety
and Industrial Safety subsectors. Healthcare sector performance reflected weak
second half trends in the Life Sciences and Healthcare Assessment &
Analytics subsectors, partly offset by strong growth in Therapeutic Solutions.

 

By region, the USA and Mainland Europe, the Group's two largest regions which
together account for nearly two-thirds of Group revenue, have grown strongly
in the year to date. Growth in the United Kingdom has been modest, while Asia
Pacific's revenue, which was lower in the first half, saw some improvement in
the second half. Revenue growth in the remaining smaller regions has been good
in aggregate.

 

The Group's organic growth has been supported by order intake which remains
ahead of the comparable period last year and is close to revenue in the year
to date.

 

As expected, the appreciation of Sterling has continued to have a negative
currency translation effect on the Group's results (see note 3).

 

Substantial strategic investments supported by a strong financial position

We continue to make substantial strategic investments, both to enhance the
Group's future organic growth opportunities, and to expand its market reach
through acquisitions.

 

Eight acquisitions have been completed in the year to date across the Group's
three sectors, with £299m invested (on a maximum total consideration basis -
see note 4). We continue to have a healthy acquisition pipeline across all
three sectors.

 

The strength of our cash generation supports these investments while enabling
us to maintain a strong financial position with substantial capacity for
future investment. Cash conversion for the full year is expected to be ahead
of our Key Performance Indicator (KPI) of 90%.

 

Full Year Results

The Group's results for the year ending 31 March 2024 will be released on 13
June 2024.

 

For further information, please contact:

Halma plc

Marc Ronchetti, Group Chief Executive
     +44 (0)1494 721111

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 796013

MHP

Oliver Hughes / Rachel Farrington
           +44 (0)20 3128 8100

/ Ollie Hoare

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 2024 to be in the range of £376.0m to
£393.5m, with a consensus of £388.5m.

 

3.        Sterling has strengthened 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 2024 is
expected to be negative. Based on the forecast mix of currency denominated
revenue and profit for the 2024 financial year, a 1% movement in the US Dollar
changes full year revenue by £9.7m and profit by £2.1m. Similarly, a 1%
movement in the Euro changes full year revenue by £2.6m and profit by £0.5m.

 

4.        Of the eight acquisitions made in the year to date, five
(Sewertronics Sp. Z o.o., Lazer Safe Pty. Ltd., Visual Imaging Resources LLC,
Alpha Instrumatics Group and AprioMed AB) 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):

·    The TeDan group of companies, a global leader in innovative surgical
access systems, for a maximum total consideration of US$100m (approximately
£81m);

·    Ziegler Electronic Devices GmbH, a designer and manufacturer of
ballasts and sensors for UV sterilisation (for an undisclosed consideration);

·    Rovers Medical Devices B.V., a designer and manufacturer of sample
collection devices used in the prevention and diagnostics of cervical cancer,
for a maximum total consideration of €91m (approximately £78m).

 

5.        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.

 

6.        A copy of this announcement, together with other information
about Halma, may be viewed on our website www.halma.com (http://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 8,000 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.

Halma has been named as one of Britain's Most Admired Companies for the past
six years.

For more information www.halma.com (http://www.halma.com/)

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