- Record profits keep rolling for 19th consecutive year
- CEO Andy Williams announces retirement after 18 years in top job
- Orders strong and analyst predicts further growth this year
Even a 19th consecutive year of record profit was not enough to lift the grim investor mood on 16 June.
Shares in electronics engineer Halma (HLMA) slumped more than 6% as markets grapple with steep interest rate hikes being aggressively pushed through by central banks to deal with the world’s inflation problem.
It means the stock has now fallen 40% year to date despite completing two value-adding acquisitions and releasing a reassuring trading update in March.
The shares were trading at £18.78, or similar to Covid sell-off levels of early 2020.
Some may feel that the announcement of chief executive Andrew Williams retirement has added uncertainty, yet the company’s clear succession plan undermines that view. Williams, who has run health, safety and environmental-technology company Halma for the past 18 years, will be succeeded by Marc Ronchetti, chief financial officer since 2018 and a Halma man for the past six years.
Longer-term investors will gleefully note Halma’s underlying financial and operating strength. Today’s full year to 31 March 2022 figures showed pre-tax profit (adjusted for acquired and sold businesses) up 14% at £316.2 million on revenues of £1.52 billion, 16% higher on the previous year.
This was roughly 3% ahead of consensus forecasts. Dividends increased 7% for the year.
RARE OPTIMISM DISMISSED BY INVESTORS
This was a year of notable achievements for Halma, with revenue exceeding £1.5 billion and profit £300 million for the first time,’ outgoing CEO Williams said.
‘We delivered our 19th consecutive year of record profit, and our 43rd consecutive year of dividend growth of 5% or more, while substantially increasing strategic investment including further strengthening our leadership, teams and culture to support our future growth.’
Even the immediate future looks stable, optimism that investors have seen precious little of for so many companies this year.
Order intake exceeded revenue and is in line with very strong intake in the same period of the previous year, the company said.
‘At this stage, we leave our full year March 2023 adjusted pre-tax profit at £336 million, unchanged given the wider macro-economic uncertainty, noting this implies a circa 6% increase year-on-year,’ said Shore Cap analysts today.
