Halma reports decline in Annual profit despite revenue growth, boosts dividend by 7.0%

Halma PLC on Thursday reported a fall in annual profit despite revenue rising, but it lifted its payout by 7.0%. The safety equipment manufacturer, listed on the FTSE 100, saw its shares (LSE: HMLA) drop 4.7% to 2,314.00 pence each at the start of trading.

In the financial year ending on March 31, Halma generated revenue of £1.85 billion, representing an impressive 21% surge compared to the previous year’s £1.53 billion. This exceeded analysts’ revenue consensus of £1.80 billion. Notably, the company achieved revenue growth across all sectors and regions, including organic constant currency growth.

However, the pretax profit experienced a decline, amounting to £291.5 million, down 4.2% from the previous year’s £304.4 million. Halma explained that the decrease in profitability was primarily due to the absence of a £34.0 million gain on disposal in the previous year. Excluding this gain, the adjusted pretax profit showed a positive trend, rising by 8% year-on-year.

Halma’s adjusted pretax profit reached £361.3 million, an increase of 14% from £316.2 million in the prior year. This result falls within the company’s projected range of £353.1 million to £369.9 million and exceeds the analyst consensus of £361 million, surpassing the company’s own guidance.

Group Chief Executive Marc Ronchetti expressed satisfaction with Halma’s performance, stating, “2023 was a successful year for Halma, reflecting the contributions and continued commitment to our purpose of everyone at Halma. We delivered record revenue and profit, achieving our 20th consecutive year of profit growth and our 44th consecutive year of dividend per share growth of 5% or more.”

In line with this positive outlook, Halma declared a final dividend of 12.34 pence per share, representing a 7.0% increase compared to 11.53 pence per share in the previous year. The total dividend for the year amounted to 20.20 pence per share, also up 7.0% from the 18.88 pence per share in financial 2022. Analysts anticipate a full-year dividend payout of 20.4 pence per share.

Looking ahead, Halma remains optimistic about the new financial year, having made a strong start with a robust order book and order intake in line with revenue expectations.