# Halma makes strong progress in the first half of the financial year

- Link: https://www.directorstalkinterviews.com/halma-makes-strong-progress-in-the-first-half-of-the-financial-year/4121023873
- Published: 2021-09-22T07:20:40+01:00
- Author: Amilia Stone

**[Halma plc](https://www.directorstalkinterviews.com/ftse-company/halma-plc/hlma.l)**(
LON:HLMA), the global group of life-saving technology companies focused on growing
a safer, cleaner and healthier future, has released its scheduled trading update,
for the period from 1 April 2021 to date.

**Strong progress in the first half and improved guidance for the full year**

Halma has made strong progress in the first half of the financial year, and the 
Group’s financial performance has been ahead of the Board’s expectations, with revenue
growth and return on sales exceeding expectations and historic levels. Order intake
has been ahead of both revenue this year and of order intake for the same period
last year. This performance reflects the benefits of the long-term growth drivers
in our markets, the breadth of our portfolio, and the agility of our business model
which has enabled our companies to respond rapidly to changing market conditions.

We expect to report strong organic constant currency revenue and profit growth for
the first half of the year, with profitability benefitting from a slower-than-expected
return of variable overhead costs as restrictions due to the COVID pandemic have
eased. This performance compares to a weaker comparative period in the first half
of the 2020/21 financial year when we saw the largest impacts from the pandemic.

We expect more typical rates of revenue growth and return on sales in the second
half of the year, with the latter more in line with historic levels as variable 
overhead costs gradually return. Although we expect to see continued impact on revenue,
costs and working capital from increased supply chain, logistics and labour market
disruption, we currently expect Adjusted profit before tax for the full year to 
be slightly ahead of our previous guidance (see Notes 1 and 2). Therefore, our results
for the full year are expected to be more weighted to the first half than in previous
years.

**All sectors and major geographic regions delivered strong organic constant currency
growth**

The Safety and Environmental & Analysis sectors reported the strongest organic revenue
and profit growth in the year to date, with many companies experiencing significant
increases in demand because of a rebound in customer activity as the effects of 
the COVID pandemic moderated.

The Medical sector also delivered strong growth, with revenue benefiting from a 
recovery in demand for most products and services related to elective healthcare
procedures, which offset declining demand for products and services directly related
to COVID diagnosis or treatment.

The Safety and Environmental & Analysis sectors saw a small negative impact from
recent disposals, net of acquisitions, while the Medical sector benefited from recent
acquisitions.

There was widespread growth geographically, with double-digit percentage organic
constant currency revenue increases in all major regions. There was very strong 
organic constant currency growth in the UK and Asia Pacific, while the USA and Mainland
Europe also grew strongly.

The strength of Sterling is having a negative currency translation effect on the
Group’s results (see Note 4); we expect this effect to reduce in the second half
of the year.

**Good progress in M&A, opportunities and resources for future investment**

We have made ten acquisitions in the financial year to date for a maximum total 
consideration of £108 million. We also completed the disposal of Texecom, for £65
million (see note 5), which demonstrates our disciplined approach to portfolio management.

Cash generation remained good. This, together with Halma’s strong financial position,
will support continued investment in growth, both organically and by acquisition.

We have a healthy acquisition pipeline and continue to actively manage our portfolio
of global businesses to ensure that it is aligned with our purpose of growing a 
safer, cleaner, healthier future for everyone, every day, and continues to deliver
strong growth and returns over the long term.

**Half Year Results**

Halma’s results for the half year ending 30 September 2021 will be released on Thursday
18 November 2021.

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