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Halma (LSE:HLMA), the global group of life-saving technology companies dedicated to promoting a safer, cleaner, and healthier future, released its trading update ahead of its half-year results for the period ending 30 September 2024. The company reported further progress in the first half of the financial year and reiterated its full-year guidance for strong growth and profitability.
Steady Performance and Unchanged Full-Year Guidance
Halma announced that it remains on track to achieve good organic revenue growth, consistent with its Sustainable Growth Model. The company's diversified portfolio and agile workforce have allowed it to adapt effectively to varied market conditions. As a result, Halma's guidance for the full year ending in March 2025 remains unchanged from its June 2024 announcement. The company expects good organic constant currency revenue growth and an Adjusted EBIT margin of around 21%.
In the first half of the financial year, Halma expects to deliver solid organic growth, supported by strong order intake, which has outpaced both revenue and the same period last year. Furthermore, the company's Adjusted EBIT margin is anticipated to be modestly higher than in the first half of the previous year, aligning with its full-year expectations. The group also projects strong cash flow performance, which will enable substantial investments both organically and through acquisitions to fuel future growth opportunities.
However, the appreciation of the British pound has negatively impacted Halma's currency translation, which the company expects to continue into the second half of the year.
Strategic Acquisitions and Robust M&A Pipeline
Halma's strategy to drive growth through mergers and acquisitions continues to make progress. During the first half of the financial year, the company completed four acquisitions in its Safety sector, with a combined consideration of approximately £85 million. These acquisitions reflect Halma’s focus on expanding its portfolio in life-saving technologies.
The acquisitions include:
- MK Test Systems Limited, a UK-based company specializing in safety-critical electrical testing technology, purchased for £44 million in April. MK Test will operate as a standalone entity within Halma's Safety sector.
- G.F.E. - Global Fire Equipment, S.A., a Portuguese firm that designs and manufactures fire detection and alarm systems, acquired as a bolt-on to Halma’s fire safety company, Ampac, for €42.5 million (£36 million) in June.
- Advantronic, a Spanish manufacturer of control panels and a distributor of fire alarm systems with expertise in wireless technology, acquired as a bolt-on for Orama, another fire safety company, for €2.3 million (£2 million) in July.
- RemLive, a UK-based provider of electrical safety products, added as a bolt-on to Halma’s worker safety company, Fortress Safety, for £3.5 million in July.
Halma continues to maintain a healthy pipeline of acquisition opportunities across all three of its sectors: Safety, Health, and Environmental & Analysis. In addition to acquisitions, the company also disposed of Hydreka SAS, a small water management company, for £7 million net of disposal costs, as part of its ongoing portfolio management.
Outlook and Half-Year Results
As Halma approaches the second half of its financial year, the company is well-positioned to continue its growth trajectory. The company’s ability to balance organic growth with strategic acquisitions has strengthened its position in the life-saving technology market. Halma's strong cash flow and focus on expanding its business through key acquisitions are expected to fuel further growth in the medium and long term.
