Tech group Halma hikes dividend as revenues grow but shares dip as return on sales narrowly misses forecasts
- Life-saving tech group saw its shares fall by over 5% today following update
Halma has lifted its dividend following a 21 per cent rise in revenues, despite the FTSE 100 tech group posting a dip in like-for-like profits.
Statutory pre-tax profit slipped 4 per cent to £291.5million in the year to the end of March, driven by the non-recurrence of a gain on disposal of a Safety Sector business in the previous year.
On an adjusted basis, pre-tax profits came in 14 per cent higher at £361.3million, marking a 20th consecutive year of record earnings.
Dividend boost: Halma has lifted its dividend for shareholder amid a rise in revenue
Halma said bumper revenues of £1.85billion were driven by growth in all sectors and regions, with the exception of the safety sector, which saw a marginal decline.
The group’s two largest regions, the US and mainland Europe, ‘grew strongly’, it said, while UK growth was slower.
The company upped its full-year dividend by 7 per cent to 20.20p a share.
Boss Marc Ronchetti, said: ‘This performance was supported by strong and broadly-based demand for our products and services, and enabled by our Sustainable Growth Model which gives our companies considerable autonomy and agility, allowing them to respond quickly to new growth opportunities and to act rapidly to address operational challenges when they arise.
‘At the same time, we were able to make substantial investments, of over half a billion pounds in aggregate, to support our future growth.
‘These included record levels of expenditure on research and development, technology infrastructure, and acquisitions to expand our market opportunities.’
Halma shares fell 5.29 per cent or 128.54p to 2,300.46p this morning, having risen over 15 per cent in the last year.
Matt Britzman, equity analyst at Hargreaves Lansdown, put the fall down to Halma forecasting a return on sales of 20 per cent for full-year 2014, narrowly below market expectations of 20.4 per cent.
He added: ‘Halma’s pushing hard with the investment in bolt-on business, with seven in the year and another two since year-end.
‘This is all part and parcel with a business model that acts more like a holding company, bringing on tech-focused businesses and founders in the safety, health and environment markets.
‘End markets look promising over the long term, but the valuation is demanding – any hint of weakness in orders or profitability and the pressure mounts.’
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