(Alliance News) - Safety equipment firm Halma PLC on Wednesday increased its full-year guidance after reporting "strong progress" during the first half of its current financial year.
Shares in Halma were trading up 1.2% at 3,094.00 pence each in London on Wednesday morning.
In a trading update, the FTSE 100-constituent said performance exceeded management expectations in the first half ending September 30.
Halma said it now expects to report strong organic constant currency revenue and profit growth for the first half, as revenue and return on sales surpassed historic levels.
The company noted that profitability benefited from a slower-than-expected return of variable overhead costs as Covid restrictions eased.
Order intake, meanwhile, was ahead of both revenue this year and of order intake for the same period last year, the company said.
Strongest revenue and profit rebound was visible in the Safety and Environmental & Analysis segments, Halma said, noting a return of demand as the effects of the pandemic moderated. Its medical sector also delivered growth as the number of elective procedures increased.
"This performance reflects the benefits of the long-term growth drivers in our markets, the breadth of our portfolio, and the agility of our business model which has enabled our companies to respond rapidly to changing market conditions," Halma added.
However, the company advised that comparative figures for the year prior are weaker due to the impact of the pandemic.
"We expect more typical rates of revenue growth and return on sales in the second half of the year, with the latter more in line with historic levels as variable overhead costs gradually return," it noted.
Overall, Halma said it expects pretax profit to be ahead of previous full-year guidance as a more usual level of sales returns. The company previously guided constant currency profit growth in the low double-digit percentage for its full financial year.
Despite its positive outlook, supply chain and labour market disruptions are expected to reduce the company's revenue and increase overhead costs.
In its financial year to date, Halma made ten acquisitions for a maximum total consideration of GBP108 million. Obstetrics software firm PeriGen Inc was the largest recent acquisition, purchased for a USD58 million cash consideration, or around GBP42 million.
Halma disposed of electronic security systems company, Texecom Ltd, for GBP65 million in the same period.
"We have a healthy acquisition pipeline and continue to actively manage our portfolio of global businesses to ensure that it is aligned with our purpose of growing a safer, cleaner, healthier future for everyone, every day, and continues to deliver strong growth and returns over the long term," the company said.
Halma's half-year results are due to be released on November 18.
By Scarlett Butler; scarlettbutler@alliancenews.com
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Halma (HLMA)