Halma Plc - Trading update
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Halma today releases its scheduled trading update, for the period from 1 October 2020 to date.
Improved expectations for the Full Year
The Group has made good progress in the second half of the financial year and we now expect Adjusted profit before tax1 for the 2020/21 financial year to be similar to that in FY 2019/20, compared to prior guidance of around 5% below FY 2019/20. This includes a small adverse impact on the full year 2020/21 results from movements in exchange rates, compared to the broadly neutral effect forecast at the time of the half year results.
Revenue and order trends
Revenue trends have seen continued sequential improvement, and we have maintained good ongoing overhead control while accelerating our strategic investments to support future growth. Order intake is currently ahead of revenue and ahead of the same period last year, reflecting the agility of our business model, the benefits of our focus on niche markets with long-term growth drivers, and the essential nature of many of our products and services.
We have continued to see significant variations in demand in individual end markets and geographic regions in the second half of the financial year.
The Infrastructure Safety sector has made further progress, while Process Safety's performance continues to gradually improve with the sector benefiting from Sensit Technologies, which was acquired last financial year. The Medical sector has seen some modest improvement in demand for products and services related to elective healthcare procedures, and has benefited from a contribution from recent acquisitions. Environmental & Analysis has delivered a resilient performance against a very strong second half comparative last year.
Revenue grew in all four major regions, with the strongest growth being in Asia Pacific, which benefited from further recovery in China. There was good growth in Mainland Europe and the UK, and more moderate growth in the USA against a strong comparative in the second half of last year, with each of these three regions benefiting from recent acquisitions.
Cash, Balance sheet and M&A activity
Cash generation in the period was strong and our financial position remains robust, allowing us to 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 and maintains strong growth and returns over the long term.
We made one acquisition and one disposal in the period. In December, we acquired Static Systems Holdings Limited, a UK-based manufacturer of critical communication systems, for £37 million. In the same month, we divested Fiberguide Industries, Inc., a US-based manufacturer of fibre optic technology, for $38 million (equivalent to £28.1 million at the time of announcement).
The Group's results for the full year ending 31 March 2021 are expected to be released on 10 June 2021.
Appointment of new Chair
On 9 February 2021, Dame Louise Makin joined the Halma Board as an independent Non-Executive Director and Chair Designate, joining the Nomination and Remuneration committees. Louise will replace Paul Walker as Chair in July 2021 when he steps down from the Board after eight years in that role.
New sector structure: disclosure of historical financial information
As previously announced, from 1 April 2021 Halma will align its organisational structure and financial reporting with our purpose and core market focus.
We will report our performance in three sectors, namely Safety, Environmental & Analysis, and Medical. Today, we are publishing historical financial information for each of these three sectors for the financial year to March 2020, including comparatives, and for the half years to September 2019 and September 2020. This information is presented in the Appendix to this announcement.