Halma shares rose on Thursday after the group upgraded its revenue growth guidance after stronger-than-expected performance in the first half of its financial year.
The company now expects low double-digit organic growth for the full year, up from previous guidance of upper single digits. A driving force behind the upgrade was the strength in its photonics business within the Environmental & Analysis division.
Halma shares were up over 1% at the time of writing.
Order intake has outpaced both current revenue and last year’s comparable period, providing momentum for continued expansion. The group maintains its profit margin guidance of modestly above the midpoint of its 19-23% target range.
Investors should be pleased with the update, and the gains for shares would likley be stronger if Halma shares were not already up 25% year to date.
Acquisition Activity Continues
Halma has grown through acquisitions over the years and completed two acquisitions during the period. The larger deal saw it purchase Brownline, a specialist in gyroscopic locating systems for underground drilling, for €150m in August. It also acquired cryogenic therapy company Nu Perspectives for £1.5m as an add-on to its healthcare business.
The group disposed of AAI for approximately £10m whilst maintaining what it describes as a “healthy acquisition pipeline” for future deals.
Currency headwinds from sterling’s strength are expected to continue impacting results through the second half. Despite this, the company’s cash generation remains robust, supporting both organic investment and acquisitions.