Halma had a robust start to the year, raising its full-year profit margin guidance on Thursday as broad-based growth and a booming photonics business helped bolster the safety and healthcare technology group.
The company said it now expects its adjusted operating margin for the year to March to be between 23.5% and 24%, up from previous guidance of around 22.7%, helped by good operational delivery and a favourable product mix.
“That is a chunky upgrade and suggests Halma is becoming increasingly efficient at turning sales into profit,” said Mark Crouch, market analyst for etoro.
“Orders are also running ahead of revenue, giving investors some comfort that the momentum has legs, while photonics is emerging as a particularly bright spot with growth of around 30%.”
It reaffirmed its expectation of low double-digit organic revenue growth for the year, including a roughly 30% jump in its photonics business, and said order intake was running ahead of both revenue and the prior year.
Halma also stepped up its dealmaking, spending a record £515m on six acquisitions so far this year, while disposing of three businesses for about £83m as it reshaped its portfolio. It flagged that the recent strengthening of the pound would create a modest currency headwind.
Halma shares rising 2% on Thursday reflected satisfaction with today’s update, but the maintenance of revenue guidance prevented an enthusiastic response.
Half-year results are due on 19 November.