Growth seen in all major regions for environmental tech company.
Halma deliver record revenue and profit growth
- Revenue growth seen across all major regions, with USA and UK growing by 18% and 16% respectively.
- Results mark 40th consecutive year of dividend growth of at least 5%.
- We maintain our ‘Hold’ recommendation but those investors who are sitting on a tidy profit may want to lock in some gains.
This morning’s full year results showed Halma performing well with revenue growth in all major regions, but especially the USA and UK growing by 18% and 16% respectively. Revenues grew an impressive 13% to £1.2mn while adjusted operating profits before taxation grew by 15% to £246mn, record figures for the group and roughly in-line with expectations leaving the share price to rise by around 1% at the market open.
The market it serves is naturally a growing market given the increased needs from both consumers and regulators for safer and healthier living and working environments. These needs are longer term in nature and all the more important as populations grow and become more urbanised around the world. This reflects upon the company’s steady revenue and profitability growth over the years and the group has been proud to say it has raised the dividend by 7%, marking the 40th consecutive year of dividend growth of at least 5%.
Overall this set of good numbers and the outlook has lifted the shares to all time high, close to £20 a share, however at a forward p/e ratio of 35x we take the view that the good news is priced in and that it looks overvalued against some of its peers. While the dividend had been growing, it is still very modest at just under 1%. We continue with our ‘Hold’ recommendation but investors sitting on a tidy profit may want to lock in some gains.
All information given including prices, yields and our opinion is correct at the time of publication. Our opinions on investments can change at any time and for our latest view please go to www.share.com. To understand how our Investment research team arrive at their views please read our Investment Research Policy.