ii view: Halma makes record after 22nd year of profit growth
Sales and profit grows across all divisions and geographic regions, the dividend is up 5% or more for the 46th consecutive year and the shares are as high as they've ever been. Buy, sell, or hold?
12th June 2025 11:27
by Keith Bowman from interactive investor
Full-year results to 31 March
- Revenue up 11% to £2.25 billion
- Adjusted profit (EBIT) up 15% to £486 million
- Final dividend 14.12p per share
- Total dividend for the year up 7% to 23.12p per share
- Average net debt flat at £632 million
Chief executive Marc Ronchetti said:
“This has been another successful year for Halma, reflecting the contributions and commitment of everyone in the Group. We delivered record revenue and profit, with strong margins and cash generation, and increased returns on capital.
“Achieving such a strong performance amidst varied market conditions and a challenging economic and geopolitical backdrop is a testament to the fundamental strengths of our Sustainable Growth Model.”
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ii round-up:
Halma (LSE:HLMA) today detailed profits that beat City expectations, with the industrial conglomerate predicting robust revenue growth for the year ahead (FY 2026), helped by ongoing demand for photonics, or light sciences used by datacentre operators.
Annual revenue rose 11% to a record £2.25 billion, making it a 22nd consecutive year of profit growth. Health and safety focused Halma is forecasting high single digit percentage growth in currency-adjusted revenue stripped of acquisitions for the 2026 financial year.
Shares in the FTSE 100 company rose above 3,300p for the first time today after rising as much as 10% in early deals. They came into these latest results up by just over a tenth so far in 2025. That’s ahead of a 7% gain for the FTSE 100 and similar to the gain at engineer IMI (LSE:IMI).
Halma operates across the three divisions of safety, the environment, and health. Its many products include those to aid safety such as smoke alarms, devices to measure climate change and pollution, as well as medical instruments to test eyesight and hearing.
Sales at the environmental and analysis division which includes datacentre related photonics, led the way, rising 18% year-over-year to £777 million, driving a one-quarter gain in divisional profits.
Elsewhere, safety sales climbed 9% to £902 million, taking profits up 14%, while those for medical devices improved 3% to £570 million, pushing profits up 4%.
Group-wide adjusted profit for the year rose 15% to £486 million, exceeding analyst forecasts of £475 million, with the City predicting growth for the year ahead to £510 million.
A first-half trading update is likely to be announced mid-to-late September.
ii view:
Founded in 1894, Halma today employs over 8,000 people across more than 20 countries. Headquartered in Amersham, Buckinghamshire, group customers include utility companies, commercial and public buildings, healthcare providers, as well as oil & gas and mining companies.
Geographically, the US accounted for most sales this latest financial year at 46%. That was followed by Europe at 19%, the UK and Asia each at 14% and the rest of the world the balance of 5%.
For investors, a knock-on impact of US trade tariffs to US companies could eventually result in reduced corporate spending, dampening demand for its products. Currency movements are expected to hinder performance in the year ahead. Sales i Europe, its second biggest market, only rose by 3%, while a forecast price/earnings (PE) ratio above the 10-year average may suggest the shares are not obviously cheap.
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More favourably, a diversity of products and geographical regions regularly sees challenges in one area countered by positives at another. Health and safety related products are arguably required whatever the economic backdrop. Ongoing bolt-on acquisitions continue to assist growth, while a dividend track record of more than 40 years of annual consecutive dividend increases is highly enviable despite leaving the shares on a modest dividend yield of under 1%.
In all, and despite ongoing risks, this well-managed FTSE 100 company continues to justify its place in many diversified long-term focused portfolios.
Positives:
- Diversity in both products and geographical sales
- Ongoing bolt-on acquisitions
Negatives:
- Economic and geopolitical outlook uncertainty
- Currency movements can hinder performance
The average rating of stock market analysts:
Strong hold
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