TIDMHLMA
RNS Number : 7077G
Halma PLC
19 March 2020
Halma today releases its scheduled trading update, for the
period from 1 October 2019 to date.
The Group has made good progress during the period, although
given the COVID-19 outbreak in the fourth quarter now expects
adjusted profit before tax for the year ending 31 March 2020 to be
in a range of approximately GBP265 million to GBP270 million. This
compares to an average of current market forecasts of GBP275.5
million (see notes 1 and 2). Risks remain given the evolving and
uncertain situation; the Board will continue to monitor the impact
of the COVID-19 outbreak closely and take mitigating actions as
appropriate.
The Group's financial position remains robust, with committed
facilities totalling approximately GBP750 million (at current
exchange rates), of which around 60% are drawn. The earliest
maturity in these facilities is for GBP77 million (at current
exchange rates) in January 2021, with the remaining maturities from
2023 onwards.
Order intake is currently ahead of revenue and ahead of the same
period last year. We have continued to benefit in the period from
the long-term growth drivers in our markets, the breadth of our
portfolio and the resilience of our business model.
To date, the Group has delivered revenue growth in all four
major regions and all sectors:
- The USA grew strongly and benefited from positive
contributions from recent acquisitions. There was good growth in
the UK and more moderate growth in Mainland Europe, while strong
growth in Asia Pacific was driven by recent acquisitions.
- The Environmental & Analysis sector delivered strong
organic growth in the period, with Infrastructure Safety delivering
a strong performance, driven by positive contributions from recent
acquisitions and solid organic growth. The Medical sector delivered
solid revenue growth, although profit growth was lower. Although
Process Safety's performance in the second half was affected by
weaker oil and gas markets, the sector is expected to deliver a
satisfactory performance for the full year.
The currency translation effect on the Group's results in the
second half of the year is expected to be broadly neutral,
resulting in a positive impact for the year ending 31 March 2020 as
a whole (see note 3).
This has been a strong year for M&A activity, with ten
acquisitions completed across all four sectors, for a total initial
consideration of GBP227 million. We made seven acquisitions in the
second half (see note 4 to this announcement, and our website
www.halma.com ). The integration of all acquisitions made during
the year is currently progressing well.
The Group's next scheduled update on trading will be the
announcement of its results for the year ending 31 March 2020,
which will be released on 11 June 2020.
For further information, please
contact:
Halma plc
Andrew Williams, Chief Executive Switchboard: +44 (0)1494 721111
Marc Ronchetti, Chief Financial
Officer
Charles King, Head of Investor Mobile: +44 (0)7776 685948
Relations
MHP Communications
Rachel Hirst/ Andrew Jaques +44 (0)20 3128 8100
About Halma
Halma is a global group of life-saving technology companies,
focused on growing a safer, cleaner and healthier future for people
worldwide. Our innovative products and solutions address many of
the key issues facing the world today. We operate in four sectors:
Process Safety, Infrastructure Safety, Medical and Environmental
& Analysis. We employ over 6,000 people in more than 20
countries, with major operations in Europe, the USA and
Asia-Pacific. We target global niche markets where sustainable
growth and high returns are supported by long-term drivers. Halma
is listed on the London Stock Exchange and has been a member of the
FTSE 100 index since December 2017.
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 that current market forecasts for adjusted
profit before tax for the year ending 31 March 2020 are in the
range of GBP272.0 million to GBP278.3 million, with an average of
GBP275.5 million.
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 2020 is expected to be positive. Based on the mix
of currency denominated revenue and profit for the 2020 financial
year, a 1% movement in the US Dollar changes full year revenue by
GBP6.3 million and profit by GBP1.4 million. Similarly, a 1%
movement in the Euro changes full year revenue by GBP1.6 million
and profit by GBP0.3 million. The weighted average exchange rates
relative to Sterling used to translate revenue and profit for the
year ended 31 March 2019 were: US Dollar 1.31, Euro 1.14.
4. We made seven acquisitions in the second half of the current financial year.
In October 2019, we acquired the Trabectome and Goniotome
product platforms from NeoMedix Inc., to enter the fast-growing
minimally-invasive glaucoma surgery market. The initial cash
consideration was US$8.1 million (GBP6.6 million) on a cash- and
debt-free basis. Further earn-out considerations, capped at a total
of US$17 million (GBP14.0 million) are payable in cash, dependent
on performance in the three years to October 2022. In the same
month, we also acquired Infowave Solutions Inc., a location sensing
and software solutions provider, for CenTrak, to further expand its
addressable market and enhance its technological and data
capabilities. The initial consideration for Infowave was US$8.3
million (GBP6.8 million) with further earn-out considerations,
payable in cash, of up to US$4 million (GBP3.3 million) in total,
payable dependent on performance in each of the financial years
ended March 2021 and March 2022.
In January 2020, we acquired NovaBone Products, LLC, a designer
and manufacturer of US FDA-approved synthetic bone graft products,
for US$97.0 million (GBP74.0 million). We also purchased a 70 per
cent holding in FireMate Software Pty. Ltd, which provides
cloud-based fire protection maintenance software to fire
contractors, for an initial consideration of A$11.8 million (GBP6.2
million) and a further A$6.4 million (GBP3.3 million) contingent on
performance to 30 June 2022. We have an option to purchase the
remaining 30% of FireMate, exercisable in the six months from 31
March 2025.
In February 2020, we acquired Sensit Technologies, LLC, a gas
leak detection company, for US$51.5 million (GBP39.6 million);
Maxtec, LLC, a leader in the design, manufacture and distribution
of oxygen analysis and delivery products, for US$20.0 million
(GBP15.3 million); and Spreo, an indoor positioning and mapping
platform company, to further enhance CenTrak's capabilities, for an
initial consideration of US$0.6 million (GBP0.4 million) and
contingent consideration of US$2.0 million (GBP1.5 million).
5. This Trading Update is based upon current 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, including the
effects of the current COVID-19 outbreak.
6. A copy of this announcement, together with other information
about Halma, may be viewed on our website www.halma.com
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END
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