Halma growth slows due to UK and European weakness

13th Jun 2013 12:08

Engineering and technology group Halma delivered robust profits growth last year, but at a slower rate than in previous years. Boosted by an increased number of acquisitions, the FTSE 250 group saw grew adjusted pre-tax profits 8.0% to £130.7m, lower than the increases of 15% in 2012 and 21% in 2011. Halma reported that US and China revenue were up strongly but UK and mainland Europe revenue was lower.With sales swollen 7.0% in the year to end-March to £619.2m, Halma said acquisitions during the year and the prior year, net of disposals, contributed £26.5m, indicating organic revenue was up 2.2%.The group spent £136.8m on acquisitions plus £15.8m on acquisitions made in previous years, including Longer Pump, its largest ever stand-alone acquisition in China.For the first time the Buckinghamshire-headquartered group presented results under four sectors which it said were more clearly aligned with its core markets, which are, in order of size of revenues: Infrastructure Safety, Environmental & Analysis, Medical, and Process Safety.Environmental & Analysis disappointed, with sales falling 1% to £152.4m and profits by 4% to £30.4m due largely to reduced government research spending in the USA and lower investment by water utilities in the UK. Halma said it was putting in place management and organisational changes to improve performance, with anticipated reorganisation costs of approximately £1m in the first half of the new financial year.Infrastructure had a merely "solid" year, with profits growing 7.0% to £41.8m due to the division's focus on safety-critical product niches for regulated non-residential applications. More encouragingly, Process Safety and Medical performed strongly with profits increasing by 11% to £32.3m and 37% to £35.9m respectively. Medial was boosted by improving demand for fluid control components from major medical manufacturers, steady growth in ophthalmology markets and increased product innovation.Chief Executive Andrew Williams said: "During the past year, we have continued to strengthen our business by further increasing investment in our drivers of organic growth - innovation, people development and international expansion. "We have significantly improved the fundamental quality of our portfolio through six acquisitions and one disposal." The new financial year has started well, said Williams. "Order intake since the start of 2013 has been consistent with our expectations of sustaining year-on-year organic growth and high returns. We remain confident that Halma will make further progress in the year ahead." Shares in Halma were up 0.6% to 505.5p at 13:15 on Thursday. OH