HALMA (HLMA) £13.42

Gain to date: 6.3% Orig­i­nal en­try point: £12.62, 18 Oc­to­ber 2018


MORE RECORD-BREAK­ING re­sults from Halma (HLMA) will sur­prise no one fa­mil­iar with this health, safety and reg­u­la­tions-led elec­tron­ics equip­ment sup­plier. What does stand out is the broad spread of the per­for­mance in the half year to 30 Septem­ber, with each of its four di­vi­sions putting up dou­ble-digit or­ganic, con­stant cur­rency-ad­justed growth.

To de­liver 23% un­der­ly­ing, FX-ad­justed progress in the US is a real achieve­ment, and one that shows the scope for fur­ther growth even from seem­ingly more ma­ture mar­kets.

If or­ganic growth is one of the key mea­sures of Halma’s jour­ney so far this year, op­er­at­ing mar­gins (ad­justed for amor­ti­sa­tion charges, ac­qui­si­tions, dis­pos­als and re­struc­tur­ing costs) of 20.1% is an­other, smack bang in the mid­dle of man­age­ment’s 18% to 22% long-run tar­get. Con­vert­ing 86% of £117.9m (ad­justed) op­er­at­ing profit to cash is also right on track with its 87% long-term av­er­age.

Halma aims to dou­ble every five years or so, aided by select small ac­qui­si­tions, the lat­est of which – Li­motec and Navtech – add up to five so far in 2018. These ad­di­tions should be able to re­tain an en­tre­pre­neur­ial cul­ture with the wider group’s sup­port.

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