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| Date | 22 Sept 2022 |
| Time | 07:00:10 |
| Category | Trading updates |
| ID | 2266A |
Trading update
Halma, the global group of life-saving technology companies focused on growing a safer, cleaner and healthier future, today releases its scheduled trading update.
Good progress in the first half and unchanged guidance for the full year
Halma has made good progress in the first half of the financial year to date, in line with the Board's expectations, even though the operational environment remains challenging. Our companies have continued to see strong demand for their products and services, with order intake strongly ahead of both revenue in the year to date and order intake for the same period last year. We expect to report good organic constant currency revenue growth in the first half of the year, against a very strong comparative period last year, and Return on Sales1 in line with levels typically seen in first halves of the years prior to the COVID pandemic.
Our guidance for revenue growth and Return on Sales1 for the full financial year to March 2023 is unchanged from that given in our results announcement in June3.
Our strong underlying cash generation and robust financial position is supporting increased strategic investment in future organic growth, as well as providing capacity to fund acquisitions and our progressive dividend policy. In the first half of the year, we expect our cash conversion to reflect further targeted investment in working capital to maintain supply chain resilience and support growth.
Good organic constant currency revenue growth in all sectors
All sectors have delivered good organic constant currency revenue growth in the year to date and have also benefited from recent acquisitions, with the largest inorganic contribution being in the Environmental & Analysis sector, and more modest benefits in the Safety and Healthcare sectors. The Safety sector's performance will also reflect the impact of the disposal of Texecom made in the first half of last year.
By geography, there has been organic constant currency revenue growth in the first half of this year in all major regions. The USA and Mainland Europe have delivered good organic constant currency revenue growth to date, while the UK and Asia Pacific have grown modestly against very strong comparatives. Organic constant currency revenue growth in the remaining smaller regions was strong in aggregate.
The depreciation of Sterling is having a positive currency translation effect on the Group's results; we expect this effect to continue in the second half of the year5.
Further progress in M&A; healthy acquisition pipeline
Following a very active 2021/22 financial year, in which we made 13 acquisitions, we made one acquisition in the first half of this financial year. In April, we acquired Deep Trekker, an Ontario-based manufacturer of remotely operated underwater robots used for inspection, surveying, analysis and maintenance for Can$60m (approximately £36m) on a cash and debt free basis.
We have a promising acquisition pipeline across all three sectors. We continue to actively manage our portfolio of global businesses to ensure that it continues to deliver strong growth and returns over the long term and is aligned with our purpose of growing a safer, cleaner, healthier future for everyone, every day.
Half Year Results
The results for the half year ending 30 September 2022 will be released on Thursday 17 November 2022.
For further information, please contact:
Halma plc
Andrew Williams, Group Chief Executive +44 (0)1494 721111
Marc Ronchetti, Chief Financial Officer, Chief Executive Designate
Charles King, Head of Investor Relations +44 (0) 7776 685948
Clayton Hirst, Director of Corporate Affairs +44 (0) 7384 796 013
MHP Communications
Andrew Jaques / Rachel Farrington +44 (0)20 3128 8613
A copy of this announcement, together with other information about Halma, may be viewed on its website: www.halma.com
Notes:
1. Return on Sales is defined as Adjusted profit before tax2 from continuing operations expressed as a percentage of revenue from continuing operations.
2. 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.
3. The following guidance was given in our Full Year 2022 results announcement in June 2022: "We expect to deliver continued growth and maintain high returns in the 2022/23 financial year, with good single digit percentage organic constant currency revenue growth and a Return on Sales similar to the second half of the 2021/22 financial year."
4. 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.
5. Sterling has weakened in the year relative to many currencies, including the US Dollar and Euro. If current exchange rates continue throughout the rest of the current financial year, the currency translation impact on the Group's results is expected to be positive. Based on exchange rates of Sterling/US Dollar 1:1.18 and Sterling/Euro 1:1.16, we would expect approximately a £135m positive revenue effect and approximately a £30m positive profit effect in 2022/23, compared to 2021/22.
6. A copy of this announcement, together with other information about Halma, may be viewed on its website at 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 market areas where it operates:
· Safety: protecting life as populations grow and protecting worker safety.
· Environment: improving food and water quality, and monitoring air pollution.
· Healthcare: meeting rising healthcare demand as growing populations age and lifestyles change.
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