Halma's Outlook Impacted by Strong Pound Sterling

2 min read | September 27, 2024 12:49 AM AEST | By Team Kalkine Media

Halma's Outlook Impacted by Strong Pound Sterling — Image source: shutterstock

Highlights

● Halma PLC warns of ongoing negative impacts from a strong pound affecting currency translation.

● The US and mainland Europe represent the largest revenue sources, contributing 44% and 21% respectively.

● Despite currency challenges, the company anticipates solid organic revenue growth and an adjusted EBIT margin of approximately 21%.

Overview

Safety products manufacturer Halma PLC (LSE:HLMA) has issued a cautionary statement regarding the persistent impact of a strong pound on its financial results. In a trading update, management highlighted that the appreciation of sterling is negatively affecting currency translation and indicated that this trend is likely to continue into the second half of the year.

Halma's two largest markets, the US and mainland Europe, account for 44% and 21% of revenue, respectively, as noted in its most recent annual report. In contrast, the UK contributes just 14% to the group's total revenue, making Halma particularly vulnerable to fluctuations in domestic currency markets.

Despite these currency headwinds, Halma maintains an optimistic outlook, expecting robust organic revenue growth in constant currency and an adjusted EBIT margin around 21% for the full year, consistent with prior guidance. The company reported that its order intake has exceeded both revenue and the comparable period from the previous year.

In addition to its financial updates, Halma announced four acquisitions within its Safety sector during the first half of the year, valued at approximately £85 million. These acquisitions include MK Test Systems in the UK, Global Fire Equipment in Portugal, Advantronic in Spain, and RemLive, also based in the UK, specializing in electrical safety.

Furthermore, Halma completed a small disposal during the period, selling Hydreka SAS for around £7 million, net of disposal costs. This strategic move reflects Halma's focus on optimizing its portfolio while expanding its capabilities in key safety markets. Overall, the company remains well-positioned to navigate current challenges and seize growth opportunities in the safety products sector.

Disclaimer

The content, including but not limited to any articles, news, quotes, information, data, text, reports, ratings, opinions, images, photos, graphics, graphs, charts, animations and video (Content) is a service of Kalkine Media Pty Ltd (Kalkine Media, we or us), ACN 629 651 672 and is available for personal and non-commercial use only. The principal purpose of the Content is to educate and inform. The Content does not contain or imply any recommendation or opinion intended to influence your financial decisions and must not be relied upon by you as such. Some of the Content on this website may be sponsored/non-sponsored, as applicable, but is NOT a solicitation or recommendation to buy, sell or hold the stocks of the company(s) or engage in any investment activity under discussion. Kalkine Media is neither licensed nor qualified to provide investment advice through this platform. Users should make their own enquiries about any investments and Kalkine Media strongly suggests the users to seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice), as necessary. Kalkine Media hereby disclaims any and all the liabilities to any user for any direct, indirect, implied, punitive, special, incidental or other consequential damages arising from any use of the Content on this website, which is provided without warranties. The views expressed in the Content by the guests, if any, are their own and do not necessarily represent the views or opinions of Kalkine Media. Some of the images/music that may be used on this website are copyright to their respective owner(s). Kalkine Media does not claim ownership of any of the pictures displayed/music used on this website unless stated otherwise. The images/music that may be used on this website are taken from various sources on the internet, including paid subscriptions or are believed to be in public domain. We have used reasonable efforts to accredit the source wherever it was indicated as or found to be necessary.