- 21st year of record earnings
- ‘Mini-Berkshire’ beats targets
- Positive start to new year
Environment, health and safety technology group Halma (HLMA) reported its 21st year of record revenue and profit and said it had made a ‘positive start’ to the current financial year.
The shares climbed as much as 180p or 8% to £25.35 taking them to the top of the FTSE 100 performance table.
QUALITY COMPOUNDER
Halma, which is often compared with US conglomerate Berkshire Hathaway (BRK.B:NYSE) in terms of its diverse portfolio and hands-off management style, posted a 10% increase in revenue to just over £2 billion for the 12 months to March, driven by an 8% increase in underlying constant-currency sales.
Adjusted EBIT (earnings before interest and tax) rose 12% to £424 million, helped by 7% underlying growth, lifting the margin on sales to 20.8% against 20.4% previously and above the firm’s target of a minimum 19% margin.
Cash conversion increased from 78% to 103%, well ahead of Halma’s 90% target, reflecting good working capital control but also a reduction in inventory levels across the group’s companies after the strategic build-up post-Covid.
On top of its organic growth, the firm made eight acquisitions last year comprising four standalone businesses and four bolt-ons and has spent more in the last two years than in the previous five years, which will drive even faster growth going forward even allowing for a couple of disposals.
Chief executive Marc Ronchetti said the financial year to March 2025 was already off to a good start with order intake ahead of both revenue and the same period last year.
‘We expect to deliver good organic constant-currency revenue growth in the year ahead and an adjusted EBIT margin of 21%. We remain well-positioned to make further progress this year and in the longer term’, added Ronchetti.
Disclaimer: The author owns shares in Halma.
