WASHINGTON: Safety, health and environmental technology company Halma’s interim revenues rose and it remains on track to meet its targets for the second half of the year.
For the six months to 1 October, the FTSE 250 company’s revenue increased 16% to £442.1m (Numis: £444.0m), compared to the same period last year, including a positive currency translation effect of 7%.
Adjusted pre-tax profit was up 12% to £83.6m. Return on Sales was 18.9%, down slightly from 19.7% last year due to slower than expected progress from acquisitions made in the 2015/16 financial year coupled with increased investment across all sectors.
Revenue from Asia Pacific rose by 17% to £69.7m, including 7% organic constant currency growth – the highest of all the major regions. The US revenue soared 29% to £160.8m to contribute 36% of total revenue.
There were low single-digit organic constant currency growth rates in the UK, mainland Europe and the US. Total constant currency organic growth in sales was 2%, rising to 6% when adjusted for the 27 weeks in the prior period, the company said in a statement.
Revenue from regions outside the UK, Mainland Europe and the USA increased by 14% with the strong growth in Asia Pacific, an improved performance in South America and weaker demand in the Near and Middle East. Revenue from China was up by 17% to £29.9m with organic constant currency growth of 8%.
The revolving credit facility increased to £550m for the five years to 2021. Net debt widened to £237m, from £93.4m last year, but was down from £247m as of 2 April.
Andrew Williams, Chief Executive of Halma, commented: “Halma has continued to make good progress, delivering record revenue, profit and dividends for shareholders. The diversity of our business and the evolution of our organisational model through our four sectors is enabling us to sustain growth in varied market conditions.
“Since the period end, order intake has continued to be ahead of revenue and order intake last year and we are benefitting from the currency tailwind due to the weakening of Sterling since June. Halma remains on track to make progress in the second half of the year in line with the board’s expectations.”
The company declared an interim dividend of 5.33p per share, up 7% from last year.
“After a very strong run the stock has largely drifted since the trading update in July and is down 4% against a 3% rally in the FTSE-250. It now trades at P/E of 25x FY17E. We believe there is good scope for further upgrades following the results both from FX and organic growth and so would view the stock at current levels as an attractive entry point,” Numis analyst Nick James wrote in a preview of the company´s half-year figures published on 21 November.
