Halma posts record annual profit but warns over 2021
By Michele Maatouk
Date: Tuesday 14 Jul 2020
(Sharecast News) - Halma reported record annual profit and revenue on Tuesday, underpinned by acquisitions, and lifted its dividend but warned that profit for FY2021 will fall.
In the year to the end of March, adjusted pre-tax profit rose 9% to £267m, while statutory pre-tax profit was 8% higher at £224.1m. Revenue pushed up 11% to £1.34bn and the total dividend per share was lifted 5% to 16.50p.
Halma said this was the 17th consecutive year of record revenue and profit, with revenue growth across all sectors and operating profit growth in three out of four. In addition, the company - which completed 10 acquisitions over the year - said acquisitions made a strong contribution to revenue.
The group also said trading in the first quarter of FY2021 trading had been "resilient" despite the impact of the coronavirus pandemic. Revenue was down 4% on the same period a year ago, "reflecting the 'non-discretionary' demand for many Halma products; good cash generation; order intake ahead of revenue and the same period last year", it said.
However, Halma also warned that it expects adjusted pre-tax profit for 2021 to be around 5% to 10% lower than 2020 and more weighted to the second half than in previous years, noting that the timing and profile of recovery remains uncertain.
The company said it has a robust financial position, strong cash generation and substantial available liquidity. In the final quarter of the financial year, it consulted with its lending groups following the outbreak of the pandemic to assess the availability of further funding should it be needed.
"Our lending groups were supportive, and under the potential scenarios considered as part of our going concern review, we remain within our debt facilities and the attached financial covenants for the foreseeable future," it said. As a result, Halma does not plan to use the government's Covid Corporate Financing Facility.
Chief executive Andrew Williams said: "Halma delivered a record financial performance in the past year, and trading in the first quarter has been resilient despite the effects of the Covid-19 pandemic.
"This reflects our clear purpose and focused strategy, our flexible and agile organisation, and the resilient, long-term growth drivers in our chosen markets. We expect these strengths, combined with the quality of our people and our increasing investment in innovation and technology, to enable us to continue to create value for all of our key stakeholders in the years ahead."
At 1320 BST, the shares were down 4.7% at 2,183.00p.
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