Press Releases - Full Year Results 2020/21

Full Year Results 2020/21

10 June 2021

Record profit for 18^th consecutive year

Halma, the global group of life-saving technology companies focused on growing a safer, cleaner and healthier future, today announces its full year results for the 12 months to 31 March 2021.

Financial Highlights

• Record profit: Adjusted¹ profit before tax up 4%; organic constant currency^3,7 profit up 1%; statutory profit before tax up 13%, including a £21.6m gain on disposal of Fiberguide Industries.
• Three out of four sectors grew profit on a reported basis; two on an organic constant currency⁷ basis.
• Revenue down 2%, with a 5% decline in the first half improving to 2% growth in the second half.
• Organic constant currency^3,7 revenue down 6%, with an 11% decline in the first half improving to a flat performance in the second half.
• Robust revenue performance in all major regions: Asia Pacific slightly up including double digit growth in China; the USA and Mainland Europe stable; a small decline in the UK.
• Strong returns: Return on Sales^3,5 of 21.1% and ROTIC³ of 14.4%.
• Continued investment in future growth: R&D expenditure at 5.3% of revenue.
• Impressive cash generation: cash conversion of 104%, driven primarily by good working capital control.
• Rebound in M&A activity since the start of the second half, with a healthy pipeline and momentum continuing into the new financial year.
• Strong balance sheet and significant liquidity supporting value-enhancing acquisitions and an increased dividend.
• Total dividend⁴ per share for the year up 7%, the 42^nd consecutive year of an increase of 5% or more.

Operational and Sustainability Highlights

• Self-financed an employee furlough programme without accessing the UK Government’s employee support scheme. Total employee numbers at end March 2021 unchanged from end March 2020.
• No balance sheet support requested or provided from the UK Government or our other stakeholders.
• Accelerated planned technology investments to support our companies’ growth, including operational IT and digital product development projects.
• Increasing our impact: new Sustainability Framework to amplify our positive impact from purpose-aligned growth and focus our efforts on the most material areas both for Halma and its stakeholders.
• Set a 1.5 degree-aligned 2030 target for Scope 1 & 2 emissions and a target to achieve net zero Scope 1 & 2 emissions by 2040.
• Made new public commitments including: paying a Real Living Wage across UK operations from 1 June 2022; signing the Change the Race Ratio charter; and disclosing for the first time the gender pay gap in our UK and US operations.
• Appointed Dame Louise Makin as Chair Designate and Dharmash Mistry as non-executive Director. Dame Louise will succeed Paul Walker as Chair at our AGM in July 2021.
• Announced a new sector organisation from April 2021 to better align Halma’s operations and reporting with its purpose and focus on the safety, environmental and health markets.

Andrew Williams, Group Chief Executive of Halma, commented:

“Halma’s purpose is to grow a safer, cleaner, healthier future, for everyone, every day. It underpins our growth strategy, financial model, culture and organisational design. The combination and interaction of these elements has created increasing value for all stakeholders on a sustainable basis for almost 50 years.

Together, they have enabled us to make further progress during the ongoing global pandemic, giving us an agility which has been crucial in allowing us to address short-term challenges while simultaneously investing for a fast-changing future. Our progress has also been supported by our teams’ relentless execution across all parts of our business, and our resilience which stems from the diversity of our market niches, their fundamental growth drivers, and the value of the solutions we provide.

For the year ahead, we expect our markets to continue to recover, albeit at varying rates, while acknowledging that there are potential headwinds including currency, inflation, and supply chain constraints. Organic constant currency revenue for the period from the beginning of January to the end of May is up 10% year-on-year. We have made a good start to the year, order intake is currently ahead of revenue and the same period last year, and we also have a good pipeline of potential acquisition opportunities. We currently expect to deliver full year low double-digit percentage organic constant currency profit growth (prior to any IAS 38 impact⁸) and a more normal level of return on sales. We look forward to making further progress, in this year and the longer term.”

Notes:

1. Adjusted to remove the amortisation and impairment of acquired intangible assets, acquisition items, restructuring costs, and profit or loss on disposal of operations totalling £25.4m (2020: £42.9m). See note 1 to the Results for details.
2. Adjusted to remove the amortisation and impairment of acquired intangible assets, acquisition items, restructuring costs, profit or loss on disposal of operations and the associated taxation thereon. See note 2 to the Results for details.
3. Adjusted¹ Profit before Taxation, Adjusted¹ Earnings per Share, organic growth rates, Return on Sales⁵ and Return on Total Invested Capital (ROTIC) are alternative performance measures used by management. See notes 1, 2 and 3 to the Results for details.
4. Total dividend paid and proposed per share, comprising interim dividend of 6.87p per share and proposed final dividend of 10.78p per share.
5. Return on Sales is defined as Adjusted¹ Profit before Taxation from continuing operations expressed as a percentage of revenue from continuing operations.
6. Includes IFRS 16 lease liabilities of £65.0m (2020: £61.5m).
7. Organic constant currency measures exclude the effect of movements in foreign exchange rates on the translation of revenue and profit¹ into Sterling, as well as acquisitions and disposals for the year following completion.
8. See “New accounting standards and interpretations” section in the Financial Review.

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