Halma’s record profit streak set to end
Health, safety and environmental electronics equipment designer
Halma (HLMA) says a 17-year track record of consecutive annual revenue and profit growth won’t extend into next year.
The downgrade – with management suggesting pre-tax profit will drop between 5% and 10% in the financial year to 31 March 2021 – disappointed the market and sent the shares down more than 5% to £21.75 on 14 July.
This fall is worth keeping in perspective with Halma still within sight of the record high of £23.77 set in June and, assuming a 10% fall in earnings, trading on a forward price-to-earnings ratio of 49.7-times.
Over the last 10 years it has delivered a total return of nearly 700% according to SharePad, covering share price gains and dividends. These gains have been underpinned by a successful strategy built on modest acquisitions and exposure to trends around health and safety regulation and demand for healthcare and life-critical resources.
Halma’s order book continues to grow and revenue in the three months to 30 June was down just 4%. The dividend was lifted for the 41st consecutive year, up 5% to 15.7p.