Halma raises FY revenue guidance, hikes payout on strong H1 growth

(Sharecast News) - Safety equipment company Halma lifted its interim dividend and raised its full-year revenue guidance on Thursday, citing continued confidence in its growth prospects after delivering a strong first-half performance across all sectors. Halma now expects to deliver mid-teens organic revenue growth at constant currency for the full year, supported by continued premium growth in photonics within its environmental and analysis division. It also guided to an adjusted EBIT margin of around 22%, excluding the one-off profit booked in the first half, with order intake still running ahead of revenue year-to-date and versus the prior year.

The FTSE 100-listed firm said revenues had risen 15.2% to £1.23bn in the six months to 30 September, including around eight percentage points of premium growth from its photonics segment, pushing adjusted underlying earnings up 26.7% to £282m, with margins expanding by 210 basis points.

Halma, which hiked its H1 dividend by 7% to 9.63p, highlighted that all divisions had experienced both revenue and profit growth, as well as margin improvement.

Return on total invested capital increased 190bps to 16.2%, while cash conversion came in at 79%, with the group still expecting full-year conversion to align with its 90% KPI.

Halma also stated that its strategic investment had continued throughout the half, with R&D spend rising to £59.1m, or 4.8% of revenue, and two acquisitions completed for a combined £129m. Its net debt to EBITDA ratio stood at 1.03 times, comfortably within the firm's operating range.

Chief executive Marc Ronchetti said: "We made excellent progress in the first half, further extending our track record of delivering strong and compounding growth and returns, while growing a safer, cleaner, healthier future for everyone, every day. We delivered record revenue and profit, a very strong adjusted EBIT margin and returns well above our cost of capital, while making further substantial investments to support our growth over the longer term. The strength and breadth of our first half performance and our current expectations for the remainder of the year support a further upgrade to our guidance."

Reporting by Iain Gilbert at Sharecast.com