The safety and healthcare technology group upgraded profitability guidance after a first half powered by soaring demand for its photonics arm.
Halma (LSE: HLMA) shares edged up 2% on Thursday after the safety and healthcare technology group raised its full-year profit margin guidance, pointing to broad-based growth and a booming photonics division as the drivers behind the upgrade.
The FTSE 100 group now expects its adjusted operating margin for the year to March to land between 23.5% and 24%, up from previous guidance of around 22.7%, with management citing strong operational delivery and a favourable product mix. Investors welcomed the improved profitability outlook, though the shares' advance was capped by Halma leaving its revenue guidance unchanged.
Halma reaffirmed expectations of low double-digit organic revenue growth for the year, with its photonics business standing out on roughly 30% growth. Order intake is running ahead of both revenue and the prior year, a signal analysts took as evidence that current trading momentum should persist into the second half.
The group also accelerated its acquisition strategy, spending a record £515m on six deals so far this year while offloading three businesses for around £83m as it continues to reshape its portfolio. Mark Crouch, market analyst at etoro, described the margin upgrade as 'chunky' and said it suggests Halma is becoming increasingly efficient at converting sales into profit.
Halma flagged that a stronger pound would present a modest currency headwind for the remainder of the year, a factor that could temper the scale of any further upgrades. With order books ahead of revenue and photonics continuing to fire, attention now turns to whether the group can sustain this pace of growth through to full-year results in the spring.
This report is based on Halma’s announcement and coverage by UK Investor Magazine. Company announcements can be tracked via London Stock Exchange RNS and Investegate, and the full results calendar is worth watching for the next update.
This article is for general information only and does not constitute investment advice or a recommendation to buy or sell any security. Photo: Sean Pollock on Unsplash.
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