Safety firm promises divi but raises alarm on profit
HEALTH and safety equipment maker Halma has promised to hand dividend-deprived shareholders an extra boost in its next payout.
Bucking a trend that has seen dozens of FTSE 100-listed firms cancel or push back handouts as they struggle to balance their books in the Covid era, Halma has raised its total dividend by 5pc, taking it to 16.5p.
This marks the 41st consecutive year of increases. But that was not enough of a sweetener to cancel out a warning that signalled the end to a 17-year run of rising profits.
The group, which makes safety equipment such as lift door sensors, fire alarms and fire extinguishers, estimates profits in the year to March 2021 will dip between 5pc and 10pc.
A small number of job cuts are also expected.
It issued the warning alongside record annual results, as revenue jumped 11pc to £1.3bn and profit edged 8pc higher to £224m. It bought ten businesses in the last financial year – and is on the lookout to buy more.
Despite the record results, the fact that its products are often crucial rather than discretionary devices, and a rise in orders, shares fell as it warned that some of its businesses would nonetheless suffer in the months to come.
Halma closed 4.5pc lower, down 104p, to 2187p – almost at the bottom of the Footsie leaderboard.
The technology-heavy investment trust Scottish Mortgage was the biggest faller, dropping 6.9pc, or 66p, to 893p, as it tracked a selloff in American and European tech stocks.
But the wider FTSE 100 eked out a gain, rising 0.06pc, or 3.56 points, to 6179.75, supported by gains in resource companies such as BP (up 2.7pc, or 7.9p, to 304.5p) and Royal Dutch Shell (up 2.5pc, or 29.8p, to 1247.6p).
The FTSE 250, however, shed 1.2pc, or 210.40 points, to 17,174.69, after a report released by the Academy of Medical Sciences warned 120,000 people could die in a ‘reasonable worst-case scenario’ this winter if there is a second wave of virus infections.
Mixer maker Fevertree lost its fizz after the widespread closure of bars in the UK, Europe and the US knocked sales.
It isn’t sure how quickly things will recover, even though sales to consumers through shops and online have been strong, as the pace of reopenings is so difficult to predict.
Its stock fell 4.9pc, or 118p, to 2300p, as it also revealed it bought its German distributor, Global Drinks Partnership, for £8.6m.
White goods giant AO World posted a smaller annual loss in the year to March and turnover rose 16pc, boosted by lockdown driving Britons to buy printers, breadmakers and video games consoles, though it warned that looming recessions in Germany and the UK could hold back spending in coming months. Shares fell 14pc, or 23p, to 141p. Cleaning products group
McBride, however, advanced 4pc, or 2.4p, to 62.4p after it said that profits are likely to be higher than expected as people and businesses scrambled to buy hand sanitisers and surface cleaning products.
But it said the Covid boost was already petering out.
Investors looked for the ejector seat from Southend Airportowner Stobart Group after it announced that it has sold its rail and civil infrastructure division to the German company Bavaria Industries.
The deal is initially worth £1,000 in cash but it could receive up to £2.9m, depending on a legacy contract. The shares fell 6.7pc, or 2.05p, to 28.6p.