TIDMHLMA
RNS Number : 6212T
Halma PLC
16 November 2023
Halma plc
HALF YEAR RESULTS 2023/24
Record first half results and continued dividend growth
Halma, the global group of life-saving technology companies focused
on growing a safer, cleaner, healthier future for everyone, every
day, today announces results for the 6 months to 30 September 2023.
Highlights
"Halma made good progress in the first half. The Group performance
reflects the strength we derive from our Sustainable Growth Model
and the long-term growth drivers that underpin our diverse portfolio.
These enabled us to deliver record revenue, profit and dividend,
while further enhancing our growth opportunities through increased
strategic investment, supported by a strong cash flow performance
and continued balance sheet strength. We remain on track to make
further progress in the second half of the year." Marc Ronchetti,
Group Chief Executive.
Change 2023/24 2022/23
Revenue +9% GBP950.5m GBP875.5m
Adjusted(1) Earnings before Interest +7% GBP189.9m GBP177.9m
and Taxation (EBIT)
Adjusted(1) Profit before Taxation +3% GBP177.5m GBP171.7m
Adjusted Earnings per Share(2) +4% 36.90p 35.65p
Statutory Earnings before Interest +7% GBP162.6m GBP151.7m
and Taxation
Statutory Profit before Taxation +3% GBP150.2m GBP145.5m
Statutory Earnings per Share +3% 31.39p 30.39p
Interim Dividend per Share(3) +7% 8.41p 7.86p
Adjusted(1) EBIT margin (30)bps 20.0% 20.3%
Return on Sales(4) (90)bps 18.7% 19.6%
Return on Total Invested Capital(5) (60)bps 13.2% 13.8%
* Record revenue and profit:
o Revenue +9%; organic constant currency(6) (OCCY) revenue +5%;
o Adjusted(1) Profit before Taxation +3%; OCCY(6) in line with
first half of last year;
o Statutory Profit before Taxation +3%.
* Healthy contribution from recent acquisitions(7) ,
adding over 5% to revenue and profit growth.
* Adjusted(1) EBIT margin resilient at 20.0% (2022/23:
20.3%).
* Return on Sales(4) of 18.7% (2022/23: 19.6%):
principally reflecting higher net finance expense;
compares to strong performance, above pre-COVID level,
in 2022/23 first half.
* Continued strategic investment to support future
growth:
o R&D investment up 5% to GBP52m, representing 5.5% of revenue;
o Five acquisitions completed in financial year to date (three
in first half) for GBP126m maximum total consideration; healthy
pipeline of potential acquisitions.
* Strong cash performance; continued balance sheet
strength: cash conversion(9) of 96% (2022/23: 63%),
above 90% target; net debt/EBITDA 1.4 times, within
operating range of up to 2 times.
* Revenue growth in all sectors:
o Safety: continued strong progress including good OCCY(6) growth
and healthy acquisition contribution;
o Environmental & Analysis: good reported and OCCY(6) growth;
includes very strong growth in photonics and water, partly offset
by weaker trends in spectroscopy;
o Healthcare: modest reported growth; flat OCCY(6) revenue reflects
strong growth in sensors & analytics and ophthalmology therapeutics,
offset by continuing OEM customer destocking, especially in Life
Sciences, and budgetary caution at healthcare providers.
* Adjusted(1) EBIT margin increase in Safety and
Healthcare sectors; lower Environmental & Analysis
margin mainly reflects reduction in higher margin
spectroscopy revenue.
* Revenue growth in all regions except Asia Pacific:
strong growth in largest regions of USA and Mainland
Europe; Asia Pacific mainly reflects weaker China
trends.
* Interim dividend +7%: reflects the Board's continued
confidence in the Group's growth prospects in a
continued uncertain environment.
Marc Ronchetti, Group Chief Executive of Halma, commented:
"Halma made good progress in the first half. The Group's performance
reflects the strength we derive from our Sustainable Growth Model
and the long-term growth drivers that underpin our diverse portfolio.
These enabled us to deliver record revenue, profit and dividend,
while further enhancing our growth opportunities through increased
strategic investment, supported by a strong cash flow performance
and continued balance sheet strength.
The current operating environment presents both challenges and
opportunities. Our continued success in current varied market
conditions is enabled by our Sustainable Growth Model. We benefit
from our focus on markets aligned to our purpose, which present
substantial opportunities for growth underpinned by resilient,
long-term growth drivers; from the portfolio and geographic diversity
of our businesses; from our talented people and our collaborative
and entrepreneurial culture; from the agility of our business
model; and from the strength of our sustainable financial model.
We remain on track to make further progress in the second half
of the year and to deliver good organic constant currency(6)
revenue growth in the full year to March 2024. Group order intake
remains ahead of the comparable period last year and close to
revenue in the year to date. Our current expectation is for full
year 2024 Adjusted(1) Profit before Taxation to be in line with
analyst consensus expectations(10) ."
Notes:
1 Adjusted to remove the amortisation of acquired intangible
assets; acquisition items; significant restructuring costs;
and profit or (loss) on disposal of operations, totalling
GBP27.3m (2022/23: GBP26.2m). See note 2 to the Condensed
Interim Financial Statements for details.
2 Adjusted to remove the amortisation of acquired intangible
assets, acquisition items, significant restructuring costs,
profit or (loss) on disposal of operations and the associated
taxation thereon. See note 2 to the Condensed Interim Financial
Statements for details.
3 Interim dividend declared per share.
4 Return on Sales is defined as Adjusted(1) Profit before
Taxation from continuing operations expressed as a percentage
of revenue from continuing operations.
5 Return on Total Invested Capital (ROTIC) is defined as post-tax
Adjusted(1) Profit as a percentage of average Total Invested
Capital. See note 9 to the Condensed Interim Financial Statements
for details.
6 Organic constant currency (OCCY) measures exclude the effect
of movements in foreign exchange rates on the translation
of revenue and Adjusted(1) Profit into Sterling, as well
as acquisitions in the year following completion and disposals.
See note 9 to the Condensed Interim Financial Statements
for details.
7 Net of disposals. The contribution to revenue or profit
(as appropriate) from acquisitions made in the 12 months
to 30 September 2023, less the effect on these measures from
disposals made in the same period.
8 Adjusted(1) Earnings before Interest and Taxation, Adjusted(1)
Profit before Taxation, Adjusted(2) Earnings per Share, organic
growth rates, Return on Sales, ROTIC and net debt are alternative
performance measures used by management. See notes 2, 6 and
9 to the Condensed Interim Financial Statements for details.
9 Cash conversion is defined as adjusted operating cash flow
as a percentage of adjusted operating profit. See note 9
to the Condensed Interim Financial Statements for details.
10 Consensus available at www.halma.com , based on an aggregation
of publicly available forecasts, collated from eleven research
analysts in the period 4 October 2023 to 11 October 2023
is for Adjusted(1) Profit before Taxation of GBP389.0m in
the full year to end March 2024, with a range of GBP377.4m
to GBP396.2m.
For further information, please contact:
Halma plc +44 (0)1494 721 111
Marc Ronchetti, Group Chief Executive
Steve Gunning, Chief Financial Officer
Charles King, Head of Investor Relations
Clayton Hirst, Director of Corporate +44 (0)7776 685948
Affairs +44 (0)7384 796013
MHP Group
Oliver Hughes/Rachel Farrington/Ollie
Hoare +44 (0)20 3128 8100
A copy of this announcement, together with other information
about Halma, may be viewed on its website: www.halma.com . The
webcast of the results presentation will be available on the
Halma website later today: www.halma.com
NOTE TO EDITORS
1. Halma is a global group of life-saving technology companies,
focused on growing a safer, cleaner, healthier future for everyone,
every day. Its purpose defines the three broad markets it operates
in:
-- Safety Protecting people's safety and the environment
as populations grow, and enhancing worker
safety.
-- Environment Addressing the impacts of climate change,
pollution and waste, protecting life-critical
resources and supporting scientific research.
-- Health Meeting the increasing demand for better
healthcare as chronic illness rises, driven
by growing and ageing populations and lifestyle
changes.
It employs over 8,000 people in more than 20 countries, with
major operations in the UK, Mainland Europe, the USA and Asia
Pacific. Halma is listed on the London Stock Exchange (LON:
HLMA) and is a constituent of the FTSE 100 index.
Halma has been named one of Britain's Most Admired Companies
for the past five years.
2. You can view or download copies of this announcement and our
latest Annual Report from the website at www.halma.com , or
request free printed copies of our Annual Report by contacting
halma@halma.com .
3. This announcement contains certain forward-looking statements
which have been made by the Directors in good faith using information
available up until the date they approved the announcement.
Forward-looking statements should be regarded with caution
as by their nature such statements involve risk and uncertainties
relating to events and circumstances that may occur in the
future. Actual results may differ from those expressed in such
statements, depending on the outcome of these uncertain future
events .
Review of Operations
Halma made further progress in the first half of the year,
achieving record results in an operating environment which, while
it presents significant opportunities for future growth, also
remains challenging and volatile.
Our continued success in these varied market conditions is
enabled by our Sustainable Growth Model and by the diversity of our
portfolio, and is underpinned by the long-term growth drivers in
our companies' markets. The key elements of our Sustainable Growth
Model are unchanged: a strong purpose which unites our people in
tackling some of the largest and most important issues facing the
planet today; an operating model which allows our companies to
respond rapidly to opportunities and changes in their individual
markets; a culture that encourages supportive collaboration and
entrepreneurialism; and a sustainable financial model that allows
for continued investment, both organically and by acquisition, in
growth opportunities and to maintain our geographic and portfolio
diversity.
The Sustainable Growth Model also allows us to evolve
continuously in response to changing circumstances and to emphasise
specific elements which have particular immediate relevance. In the
current environment, we have focused on maximising the ability of
our companies to address both the very substantial opportunities
for growth that their markets offer, and the challenges that are
presented by the wider operating environment. We have placed
particular emphasis on the value of collaboration and the network
amongst our companies, recognising the substantial benefits of
sharing experience and capabilities, and on the autonomy of our
companies to drive their own growth strategies. We are also
ensuring that our companies continue to receive the support they
ask for from our central teams to grow sustainably, with examples
including help in recruiting and retaining talented people, in
accessing new markets internationally, and in expanding their
growth opportunities and technological capabilities through bolt-on
acquisitions.
Record first half results
In our full year results announcement in June, we set out four
priorities:
1. ensuring our continued organic growth by our focus on
delivering value-added products and solutions to our customers;
2. retaining our disciplined approach to inorganic growth in
markets which are aligned with our purpose and which offer
long-term growth and high returns;
3. ensuring we maintain the agility of our business model
through our decentralised organisational structure and our
entrepreneurial and collaborative culture; and
4. optimising the returns on the substantial investments we are making.
I am pleased to report that we made good progress in these areas
in the first half of this year. Our companies' agility has enabled
good organic revenue growth in varied market conditions. We have
delivered a healthy contribution from acquisitions, supported by
the investments we have made in our M&A capabilities, our
strong cash performance and the strength of our balance sheet.
Returns, although lower than in the first half of last year mainly
as a result of higher interest rates and lower organic constant
currency(1) profit growth, remain high and well ahead of our cost
of capital.
Revenue increased by 8.6%, to GBP950.5m (2022/23: GBP875.5m),
which included revenue growth in all sectors, and in all regions
except Asia Pacific. We delivered good organic constant currency(1)
growth of 5.4%. This included price increases averaging around 2%,
with a stronger contribution in the Safety sector which underpinned
that sector's margin in the period. These price increases were
supported by continued Group-wide investment in our products and
services to ensure they continue to address our customers' needs
and resulted in a stable gross margin at the Group level. There was
a healthy contribution to revenue growth from recent acquisitions
(net of disposals)(1) of 5.3%. The appreciation of Sterling
resulted in a negative effect on revenue growth of 2.1%.
Adjusted(1) Earnings before Interest and Tax (Adjusted(1) EBIT)
increased by 6.7% to GBP189.9m (2022/23: GBP177.9m) and the
Adjusted(1) EBIT margin was resilient at 20.0% (2022/23: 20.3%).
This reflected the mix of sector performance as described
below.
Adjusted(1) Profit before Taxation was up 3.4% to GBP177.5m
(2022/23: GBP171.7m), with acquisitions contributing 5.2% to growth
(net of disposals)(1) . There was a negative effect from currency
of 1.8%. As a result, Adjusted(1) Profit before Taxation on an
organic constant currency(1) basis was unchanged. Return on
Sales(1) was 18.7% (2022/23: 19.6%), with the movement principally
driven by the increase in net finance expense to GBP12.4m (2022/23:
GBP6.2m) as a result of higher interest rates and higher average
levels of indebtedness following recent acquisition spend. This
accounted for 60 basis points of the change, with the remainder
reflecting the Adjusted(1) EBIT margin movement.
Statutory Profit before Taxation increased by 3.2% to GBP150.2m
(2022/23: GBP145.5m), in line with the change in Adjusted(1) profit
before taxation.
It is a strength of Halma's business model that we are able to
simultaneously deliver a strong operating performance and maintain
a strong balance sheet, while making substantial strategic
investments to support our future growth. We further increased
organic investment in the first half, for example through a 4.9%
increase in R&D expenditure to GBP52.0m, representing 5.5% of
Group revenue (2022/23: GBP49.6m; 5.7% of Group revenue).
We also further expanded our opportunities for growth in markets
highly aligned to our purpose through investment in acquisitions,
with three acquisitions in the first half for an aggregate maximum
total consideration of GBP79m on a cash- and debt-free basis. We
have made two further acquisitions following the period end, for an
aggregate maximum total consideration of approximately GBP47m,
bringing the total in the year to date to approximately GBP126m.
Details of these acquisitions are given later in this review.
Cash conversion (adjusted operating cash flow as a percentage of
adjusted operating profit - see note 9) was strong at 96%, a
significant improvement compared to the 63% in the first half of
last year, and above our cash conversion Key Performance Indicator
(KPI) of 90%. We maintained a strong balance sheet and ended the
period with net debt of GBP618.8m, equivalent to 1.4 times
annualised Adjusted EBITDA (31 March 2023: net debt of GBP596.7m;
1.4 times Adjusted EBITDA). The strength of our cash generation and
our balance sheet underpin our ongoing investment in future organic
growth, provide substantial capacity for acquisitions, and support
our progressive dividend policy.
Return on Total Invested Capital(1) was 13.2% (2022/23: 13.8%),
well above our KPI of 12% and our weighted average cost of capital,
which we estimate at approximately 9% (2022/23: 7%). The change
from 13.8% in the comparative period mainly reflects the effect of
higher interest rates and the lower level of organic constant
currency(1) profit growth in the period.
The Board has declared an increase of 7% in the interim dividend
to 8.41p per share (2022/23: 7.86p per share). The interim dividend
will be paid on 2 February 2024 to shareholders on the register on
22 December 2023.
Broad-based organic constant currency(1) revenue growth by
region
External revenue by destination
Half year Half year
2023/24 2022/23
--------------- -------------
% organic
growth
% of % of Change % at constant
GBPm total GBPm total GBPm growth currency(1)
------------------- ------ ------- ----- ------ ------ ------- ------------
United States of
America 402.0 42 364.2 42 37.8 10.4 9.6
Mainland Europe 203.2 22 170.5 19 32.7 19.2 9.2
United Kingdom 143.6 15 137.2 16 6.4 4.7 3.1
Asia Pacific 133.1 14 142.1 16 (9.0) (6.3) (6.6)
Other regions 68.6 7 61.5 7 7.1 11.5 2.7
------------------- ------ ------- ----- ------ ------ ------- ------------
950.5 100 875.5 100 75.0 8.6 5.4
------------------- ------ ------- ----- ------ ------ ------- ------------
Our growth in the period was broadly-based, and revenue grew in
all regions except Asia Pacific, both on a reported and organic
constant currency(1) basis. Reported growth rates in each region
were impacted to differing extents by acquisitions (net of
disposals), and effects from foreign currency translation.
The USA remains our largest sales destination and contributed
42% of total revenue. Revenue increased by 10.4% or 9.6% on an
organic constant currency(1) basis. Reported revenue included a
contribution of 4.3% from recent acquisitions (net of disposals),
including IZI Medical, as well as a negative effect from currency
translation, of 3.5%. On an organic constant currency(1) basis, the
strongest growth was in the Environmental & Analysis sector,
led by the Optical Analysis subsector, where a very strong
performance in Photonics more than offset a decline in
Spectroscopy. The Safety sector delivered a good organic constant
currency(1) performance, while Healthcare revenue was modestly
lower on an organic constant currency(1) basis given destocking by
OEM customers and budgetary caution at healthcare providers.
Mainland Europe revenue increased by 19.2%, or 9.2% on an
organic constant currency(1) basis. All sectors grew revenue on
both a reported and organic constant currency(1) basis. There was
an acquisition contribution (net of disposals) of 8.9%, principally
from last year's acquisitions of FirePro and WEETECH in the Safety
sector, and a positive effect from currency translation of 1.1%. On
an organic constant currency(1) basis, there was good growth in
Safety, the largest sector, and a very strong performance in the
Healthcare sector, driven by Ophthalmology within the Therapeutic
Solutions subsector. The Environmental & Analysis sector
delivered a mixed performance by subsector, with growth in Water
Analysis and Treatment and Environmental Monitoring partially
offset by a decline in Optical Analysis as a result of weaker
trends in Spectroscopy.
Revenue in the UK grew 4.7%, or 3.1% on an organic constant
currency(1) basis. There was a small benefit of 1.6% from
acquisitions (net of disposals) in the period. Growth on an organic
constant currency(1) basis was driven by the Environmental &
Analysis sector, principally as a result of a strong performance in
the Water Analysis and Treatment subsector. This was partly offset
by a modest decline on an organic constant currency(1) basis in the
Safety sector, mainly reflecting the end of a significant road
safety contract in the UK.
Asia Pacific's revenue was 6.3% lower, or 6.6% down on an
organic constant currency(1) basis. Reported growth included a 5.1%
benefit from acquisitions (net of disposals) and a negative effect
from currency translation of 4.8%. The region's organic constant
currency(1) performance reflected weaker trends in China, as well
as in a number of other smaller markets, partly offset by strong
growth in Australasia. By sector, there was strong organic constant
currency(1) growth in Safety, driven by a very strong performance
in Australasia, and including good growth in China reflecting
recovery from the effects of COVID lockdowns in the prior period.
There was a very weak performance in Environmental & Analysis,
principally as a result of weakness in the Chinese spectroscopy
market and a decline in the Environmental Monitoring subsector in
India and China. Healthcare revenues were also lower, reflecting
weakness in Life Sciences OEM demand in China.
Revenue in other regions, which represent 7% of Group revenue,
grew by 11.5%, and by 2.7% on an organic constant currency(1)
basis. Reported growth included a 10.3% benefit from acquisitions
(net of disposals), mainly FirePro in the Safety sector, and a
negative effect from currency translation of 1.5%.
Sector revenue and Adjusted(1) Profit
External revenue by sector
Half year Half year
2023/24 2022/23
--------- ---------
% organic
growth at
Change % constant
GBPm GBPm GBPm growth currency1
------------------------- --------- --------- ------ ------- ----------
Safety 400.7 355.4 45.3 12.7 6.5
Environmental & Analysis 284.1 263.8 20.3 7.7 8.8
Healthcare 266.3 256.7 9.6 3.7 0.3
Inter-segmental revenue (0.6) (0.4) (0.2)
------------------------- --------- --------- ------ ------- ----------
950.5 875.5 75.0 8.6 5.4
------------------------- --------- --------- ------ ------- ----------
Adjusted (1) Profit (EBIT)
by sector
Half year Half year
2023/24 2022/23
--------- ---------
% organic
growth at
Change % constant
GBPm GBPm GBPm growth currency(1)
------------------------- --------- --------- ------ ------- ------------
Safety 89.5 75.4 14.1 18.7 6.9
Environmental & Analysis 59.3 65.4 (6.1) (9.3) (9.5)
Healthcare 62.4 56.4 6.0 10.6 4.9
------------------------- --------- --------- ------ ------- ------------
Sector profit(2)
(EBIT) 211.2 197.2 14.0 7.1 0.9
------------------------- --------- --------- ------ ------- ------------
Central administration
costs (21.3) (19.3) (2.0)
Net finance expense (12.4) (6.2) (6.2)
------------------------- --------- --------- ------ ------- ------------
Adjusted(1) Profit
before Taxation 177.5 171.7 5.8 3.4 -
------------------------- --------- --------- ------ ------- ------------
Safety sector
Revenue increased by 12.7% to GBP400.7m (2022/23: GBP355.4m) and
organic constant currency(1) revenue increased by 6.5%. There was a
positive contribution from acquisitions (net of disposals) of 8.0%
and there was a negative effect from currency translation of 1.8%.
Growth was broadly spread, with the sector delivering revenue
growth across its core markets and regions.
There was strong growth in Industrial and Power Safety,
supported by strong execution and good customer demand for
interlock and pressure management and safe storage technologies,
and last year's acquisition of WEETECH. Good organic growth in Fire
Safety was supported by demand for fire systems and specialist and
wireless fire detection products; the subsector's reported revenue
also benefited from the recent acquisitions of FirePro and
Thermocable. Performance in Urban Safety was more mixed, with good
demand for elevator safety and emergency communications solutions
in the USA and United Kingdom, but a weaker performance in people
and vehicle flow solutions reflecting order book normalisation and
the end of a significant road safety contract in the UK. Together,
these resulted in a modest decline in Urban Safety revenue
overall.
By region, there was strong growth in Mainland Europe, the
sector's largest region, and in Asia Pacific which included a
strong performance in Australia and also reflected recovery from
lockdowns in China in the first half of last year. Both regions
benefited from recent acquisitions (WEETECH, FirePro, Thermocable
and Lazer Safe). Good momentum in the USA reflected growth across
the sector, primarily in Fire Safety and elevator safety and
emergency communications. UK revenue growth was modest, and
declined slightly on an organic constant currency(1) basis, with a
strong performance in Industrial Safety offset by the end of the
road safety contract referred to above. Revenue in other regions,
which represent 9% of sector revenues, grew strongly, principally
reflecting strong growth in safe storage and transfer
solutions.
Adjusted Profit(2) was 18.7% higher at GBP89.5m (2022/23:
GBP75.4m), and included 6.9% organic constant currency(1) growth, a
benefit of 13.8% from recent acquisitions (net of disposals), and a
negative effect from currency translation of 2.0%. The sector EBIT
margin(1) increased to 22.3% (2022/23: 21.2%), reflecting good
progress as expected in recovery from last year's supply chain
challenges. R&D expenditure of GBP21.8m remained at a good
level, which, with an increase in absolute investment of GBP2.2m,
represented 5.4% of revenue (2022/23: 5.5%).
Environmental & Analysis sector
Revenue increased by 7.7% to GBP284.1m (2022/23: GBP263.8m),
comprising 8.8% organic constant currency(1) growth, a 1.7%
contribution from acquisitions (net of disposals), and a negative
effect of 2.8% from currency translation.
There was very strong growth in the Photonics segment within the
Optical Analysis subsector, reflecting continued successful
performance for a long-standing major technology customer. The
Photonics segment is expected to benefit from a further
acceleration of demand for technologies that support the
transformation of digital and data capabilities in the second half
of the year.
Within Optical Analysis, this strength in Photonics was partly
offset by a weak performance in Spectroscopy, which saw a
substantial reduction in revenue as a result of declines in a
number of end markets including biopharma (mainly as a result of
OEM destocking), and quality testing of semiconductors
(particularly in the Chinese market) and consumer electronics.
These effects were amplified by disruption relating to the
deployment of a new IT system in one Spectroscopy company, which
has since been stabilised.
There was strong growth in the Water Analysis and Treatment
subsector, reflecting an increase in project tenders from UK
utilities for our water infrastructure businesses. There was,
however, a modest revenue decline in our water testing and
disinfection companies, principally relating to products focused on
consumer discretionary end markets. Environmental Monitoring
revenues were also modestly lower, mainly reflecting a strong
comparative in the first half of the prior year, which had
benefited from a significant order from a major gas detection
customer and substantial growth in the flow and pressure control
market in India.
Revenue by region reflected these trends. The sector's largest
region, the USA, which accounts for over half of sector revenue,
grew very strongly, driven by Photonics within Optical Analysis,
while momentum in water infrastructure led strong UK growth. Asia
Pacific revenue saw a substantial decline, largely as a result of
weakness in China and India. In other smaller regions, there was
modest growth in Europe, with good performance in most business
segments partly offset by a decline in spectroscopy markets.
Adjusted Profit(2) was 9.3% lower at GBP59.3m (2022/23:
GBP65.4m) and 9.5% lower on an organic constant currency(1) basis.
There was a 2.0% contribution from acquisitions (net of disposals)
and a negative effect of 1.8% from currency translation. The sector
EBIT margin(1) was 20.9%, compared to 24.8% in the prior period
with the change reflecting a mix effect from the revenue decline in
the higher margin spectroscopy businesses. R&D expenditure of
GBP13.0m was 4.6% of sales (2022/23: 5.2%), with the change
reflecting the change in the mix of sector revenues in the
period.
Healthcare sector
Revenue increased by 3.7% to GBP266.3m (2022/23: GBP256.7m).
Organic constant currency(1) revenue was 0.3% ahead of the first
half of last year. Acquisitions made a positive contribution of
5.3% to revenue, and there was a 1.9% negative impact from currency
translation.
There was a wide range of performance by subsector. The
Therapeutics Solutions subsector performed well, driven by strong
growth in ophthalmology therapeutics, reflecting high surgical
patient caseloads, and also benefiting from the acquisition of IZI
Medical in the prior year. This strong momentum was partly offset
by OEM customer destocking and budgetary caution at healthcare
providers which had some effect on our acute therapeutics
companies.
These factors also influenced the smaller Life Sciences
subsector, which saw a substantial decline in revenues as OEM
customers managed the inventory of diagnostic devices built up to
mitigate post-COVID supply chain disruptions. This was compounded
by global macroeconomic headwinds, and low demand in China where we
have a significant Life Sciences footprint.
Our Healthcare Assessment & Analytics subsector benefited
from a strong recovery in sensors and analytics, reflecting demand
from healthcare providers for communication systems to improve
efficiency and patient outcomes. This was offset by a weaker
performance in the patient assessment and ophthalmology diagnostics
companies due to OEM customer destocking and healthcare budgetary
restraint, resulting in Healthcare Assessment & Analytics
revenue in line with the first half of last year.
In terms of performance by geographic region, in the USA, the
sector's largest region, the mix of subsector performance described
above and the benefit from the acquisition of IZI Medical resulted
in modest growth overall. Mainland Europe grew strongly, mainly
reflecting the strong demand in ophthalmology therapeutics. The UK
saw modest growth, broadly in line with the sector. Asia Pacific
revenue declined, principally reflecting its high Life Sciences
exposure.
Adjusted Profit(2) increased by 10.6% to GBP62.4m (2022/23:
GBP56.4m), and by 4.9% on an organic constant currency(1) basis.
There was a 6.2% contribution from acquisitions (net of disposals)
and a negative effect of 0.5% from currency translation. The sector
EBIT margin(1) increased to 23.4% (2022/23: 22.0%), principally
reflecting a stronger gross margin driven by favourable portfolio
mix and ongoing pricing discipline. R&D spend was GBP17.1m,
representing 6.4% of revenue (2022/23: 6.3%), and reflecting
continued healthy levels of new product development and investment
by sector companies.
Five acquisitions completed this financial year to date across
all three sectors
We have completed five acquisitions in the year to date, for a
maximum total consideration of approximately GBP126m on a cash- and
debt-free basis, three in the first half and two since the period
end. Two were standalone companies within their sectors, increasing
our opportunities to supplement our organic growth, while three
were bolt-on acquisitions made by our companies to further expand
their capabilities. The five acquisitions in the year to date were
spread across all three sectors and, by region, two of the
companies acquired were based in Mainland Europe, and one each in
the USA, the UK and Asia Pacific.
We have a healthy pipeline of potential acquisitions across all
three sectors, and continue to see good opportunities to acquire
small- to medium-sized businesses which are strongly aligned to our
purpose of growing a safer, cleaner, healthier future for everyone,
every day.
In the first half, our Environmental & Analysis sector, we
acquired Visual Imaging Resources LLC as a bolt-on to Minicam in
April and Sewertronics Sp. Z o.o. as a standalone company in May;
details of these acquisitions were previously reported in our 2023
Annual Report and Accounts released in June. In August, we acquired
Lazer Safe Pty. Ltd., an Australia-based designer and manufacturer
of safety solutions for industrial press brake applications, for
A$45m (approximately GBP23m) on a cash- and debt-free basis, as a
standalone company within the Safety sector. Further details of
acquisitions made in the half year are given in note 10 to the
Condensed Interim Financial Statements.
Since the half year end, we acquired the Alpha Instrumatics
Group and AprioMed AB. Alpha Instrumatics, a designer and
manufacturer of devices for high-precision measurement of trace
moisture found in gases, was acquired for Alicat, one of our
Environmental & Analysis sector companies, for an initial cash
consideration of GBP31m on a cash and debt free basis. Additional
earn-out consideration is payable in cash, based on its performance
over each of the two financial years to 31 March 2025, up to an
aggregate maximum of GBP5.5m.
In our Healthcare sector, we acquired AprioMed AB, a designer,
manufacturer and distributor of medical devices used for bone
biopsies, as a bolt-on for IZI Medical for SEK130m (approximately
GBP10m) on a cash- and debt-free basis. This acquisition expands
IZI's offerings for minimally invasive procedures, complementing
its products used to diagnose and treat cancer.
We also announced after the half year end that PeriGen, our
Healthcare sector company whose AI systems protect mothers and
babies during childbirth, had entered into a strategic partnership
with, and invested US$2.5m (approximately GBP2m) in, Bloomlife Inc,
a company focused on developing innovative solutions for maternal
and foetal health monitoring (see note 14 of the Condensed Interim
Financial Statements for details).
We actively manage our portfolio of global businesses to ensure
that it continues to deliver strong growth and returns and is
aligned with our purpose of growing a safer, cleaner, healthier
future for everyone, every day. We made one small disposal in the
first half, of our 70% stake in FireMate Software Pty. Ltd.
(FireMate), for a total consideration of A$6.2m (GBP3.2m), of which
A$2.1m (GBP1.1m) is deferred. A profit of GBP0.5m was recognised on
the disposal. Halma has retained FireMate's Nimbus digital solution
that enables remote connectivity for fire and evacuation systems.
See note 11 of the Condensed Interim Financial Statements for
details.
Further progress on sustainability
Sustainability has always been at the heart of our Sustainable
Growth Model and our purpose. We are driving growth in
sustainability by encouraging our companies to target markets,
products and applications in sustainable markets that help our
customers address their sustainability challenges, while supporting
our people and protecting our environment by addressing our direct
and supply chain impacts.
In this half year, we relaunched our internal sustainability
execution plan with refreshed requirements for our companies, based
on their size and their impacts, and a focus on embedding
sustainability within existing processes, sectors and functions.
During our annual strategic review process, our sector teams
continued to support their companies in identifying sustainability
trends which will drive growth in their markets. Our companies will
update their own Sustainability Action Plans, which seek to protect
their environment and support their people, as part of the budget
process during the second half of this year. We are supporting them
by creating further shared resources on sustainability topics and
training and discussion opportunities for our Divisional Chief
Executives and our company Managing Directors and board members
responsible for sustainability.
As part of our internal sustainability execution plan, we have
now initiated the creation of Scope 3 decarbonisation plans,
focused initially on a small number of companies that represent a
majority of our Scope 3 emissions. These will support our work to
set appropriate Scope 3 targets. At the Group level, we are
embedding the assessment of wider potential sustainability risks
into our enterprise risk management system as a first step towards
a fuller materiality assessment and preparation for future
reporting requirements.
Cash flow and funding
Cash conversion (adjusted operating cash flow as a percentage of
adjusted operating profit - see note 9) in the first half of the
year was 96% (2022/23: 63%) , above our annualised cash conversion
KPI of 90%. This was principally because of a reduced working
capital outflow, given that the investment in inventory to support
supply chain resilience in the prior half year was not repeated in
this period, and lower pension deficit reduction payments (See
"Pensions update" below).
Dividend payments increased to GBP46.5m (2022/23: GBP43.6m), in
line with expectations. Tax payments were also higher at GBP45.5m,
compared to GBP31.2m in the first half of 2022/23,reflecting the
increase in the UK corporation tax rate to 25% (19% for the year
ended 31 March 2023) from 1 April 2023, and the timing of US tax
deductions on R&D expenditure.
Expenditure on acquisitions, which includes debt acquired and
settled on acquisition, acquisition costs and contingent
consideration for acquisitions made in prior years, totalled
GBP65.5m (2022/23: GBP179.7m).
Capital expenditure (net of disposal proceeds) increased to
GBP19.2m, compared to GBP15.6m in the first half of 2022/23. We
continue to expect capital expenditure for the full year to be
around GBP40m.
Net debt at the end of the period was GBP618.8m (31 March 2023:
GBP596.7m). Gearing (the ratio of net debt to annualised EBITDA) at
half year end was 1.4 times (31 March 2023: 1.4 times), within our
typical operating range of up to two times.
Currency effects on reported revenue and profit
We report our results in Sterling with 48% of Group revenue
denominated in US Dollars and 13% in Euros during the period.
Average exchange rates are used to translate results in the Income
Statement. Sterling strengthened against the US Dollar and the Euro
during the first half of 2023/24. This resulted in a 2% negative
currency translation effect on Group revenue and profit in the
first half of 2023/24 relative to 2022/23. If exchange rates remain
at current levels, we expect a further similar negative currency
translation effect in the second half of 2023/24.
Pensions update
On an IAS 19 basis, the Group's defined benefit pension plans at
the half year end had a net surplus of GBP33.1m (31 March 2023:
surplus of GBP37.9m) before the related deferred tax asset. The
plans' assets decreased due to market volatility, while there was a
smaller decrease in the plans' liabilities due to an increase in
the discount rate used to value those liabilities. Together, these
movements resulted in an overall decrease in the plans'
surplus.
The plans' actuarial valuation reviews, rather than the
accounting basis, determine any cash payments by the Group to
eliminate the deficit. Following a triennial actuarial valuation of
the two UK pension plans in the 2021/22 financial year, the cash
contributions were agreed with the trustees aimed at eliminating
the deficit. During the 2022/23 financial year the aggregate
payments made since the last triennial actuarial valuation, coupled
with the performance of the plan assets and movement in the
liabilities resulted in the Halma Group Pension Plan being funded
over the trustees' secondary funding target and close to the
expected current valuation on a solvency basis. As a result, it has
been agreed with the trustees of the Halma Group Pension Plan that
contributions will be suspended until 1 April 2025, when they will
either fall due or be superseded by cash contributions agreed with
the trustees in respect of the latest triennial actuarial
valuation. We therefore expect the cash contributions in this
regard for the two UK defined benefit plans in the 2023/24
financial year to be of GBP3.6m. Together with contributions to
smaller overseas defined benefit plans of GBP0.6m, this consistent
with our previous guidance of total contributions in the year of
GBP4.2m.
Group effective tax rate higher as expected
The Group has major operating subsidiaries in a number of
countries and the Group's effective tax rate is a blend of these
national tax rates applied to locally generated profits.
The Group's effective tax rate on Adjusted(1) Profit was 21.5%
(six months to 30 September 2022: 21.5%; year to 31 March 2023:
20.2%). The rate is higher than the prior full year rate, as
expected, principally due to the increase in the UK corporation tax
rate to 25% (19% for the year ended 31 March 2023) from 1 April
2023.
On 2 April 2019, the European Commission (EC) published its
final decision that the UK controlled Finance Company Partial
Exemption (FCPE) constituted State Aid. In common with many other
UK companies, Halma has benefited from the FCPE and had appealed
against the European Commission's decision, as had the UK
Government. The EU General Court delivered its decision on 8 June
2022. The ruling was in favour of the European Commission but in
August 2022 the UK Government and the taxpayer appealed this
decision. Following receipt of charging notices from HM Revenue
& Customs (HMRC) we made a payment in February 2021 of GBP13.9m
to HMRC in respect of tax, and in May 2021 made a further payment
of approximately GBP0.8m in respect of interest.
Whilst the EU General Court was in favour of the EC, our
assessment is that there are strong grounds for appeal and we would
expect such appeals to be successful. As the amounts paid are
expected to be fully recovered, we continue to recognise a
receivable of GBP14.7m within non-current assets in the balance
sheet.
Principal risks and uncertainties
A number of potential risks and uncertainties exist, which could
have a material impact on the Group's performance over the second
half of the financial year and thereby cause actual results to
differ materially from expected and historical results.
The Group has processes in place for identifying, evaluating and
managing risk. As part of these processes, we are closely
monitoring and assessing the potential effects on revenue, costs
and working capital from macroeconomic and geopolitical volatility.
We expect that our companies' agility, and the support they receive
from across the Group to share best practice in addressing these
challenges, will continue to mitigate any potential material
effects.
Our principal risks, together with a description of our approach
to mitigating them, are set out on pages 91 to 97 of the Annual
Report and Accounts 2023, which is available on the Group's website
at www.halma.com . See note 16 to the Condensed Interim Financial
Statements for further details.
Going concern
After conducting a review of the Group's business activities,
financial position and main trends and factors likely to affect its
future development, performance and position, and considering
potential scenarios and principal risks, the Directors believe, at
the time of approving the financial statements, that the Company is
well placed to manage its business risks successfully and remains a
going concern. For this reason they deem it appropriate to continue
to adopt the going concern basis of accounting for at least the
next 12-month period. Further information is available in the
statement headed "Going concern" within note 1 to the Condensed
Interim Financial Statements.
Summary and Outlook
Halma made good progress in the first half. The Group's
performance reflects the strength we derive from our Sustainable
Growth Model and the long-term growth drivers that underpin our
diverse portfolio. These enabled us to deliver record revenue,
profit and dividend, while further enhancing our growth
opportunities through increased strategic investment, supported by
a strong cash flow performance and continued balance sheet
strength.
The current operating environment presents both challenges and
opportunities. Our continued success in current varied market
conditions is enabled by our Sustainable Growth Model. We benefit
from our focus on markets aligned to our purpose, which present
substantial opportunities for growth underpinned by resilient,
long-term growth drivers; from the portfolio and geographic
diversity of our businesses; from our talented people and our
collaborative and entrepreneurial culture; from the agility of our
business model; and from the strength of our sustainable financial
model.
We remain on track to make further progress in the second half
of the year and to deliver good organic constant currency(1)
revenue growth in the full year to March 2024. Group order intake
remains ahead of the comparable period last year and close to
revenue in the year to date. Our current expectation is for full
year 2024 Adjusted(1) Profit before Taxation to be in line with
analyst consensus expectations(1) .
Marc Ronchetti Steve Gunning
Group Chief Executive Chief Financial Officer
(1) See Highlights, above.
(2) See note 2 to the Condensed Interim Financial Statements.
Profit is Adjusted(1) operating profit before central
administration costs after share of associate which equals
Adjusted(1) EBIT.
Independent review report to Halma plc
Report on the condensed consolidated interim financial
statements
Our conclusion
We have reviewed Halma plc's condensed consolidated interim
financial statements (the "interim financial statements") in the
Half Year Results of Halma plc for the 6 month period ended 30
September 2023 (the "period").
Based on our review, nothing has come to our attention that
causes us to believe that the interim financial statements are not
prepared, in all material respects, in accordance with UK adopted
International Accounting Standard 34, 'Interim Financial Reporting'
and the Disclosure Guidance and Transparency Rules sourcebook of
the United Kingdom's Financial Conduct Authority.
The interim financial statements comprise:
-- the Consolidated Balance Sheet as at 30 September 2023;
-- the Consolidated Income Statement and Consolidated Statement
of Comprehensive Income and Expenditure for the period then
ended;
-- the Consolidated Cash Flow Statement for the period then ended;
-- the Consolidated Statement of Changes in Equity for the period then ended; and
-- the explanatory notes to the interim financial statements.
The interim financial statements included in the Half Year
Results of Halma plc have been prepared in accordance with UK
adopted International Accounting Standard 34, 'Interim Financial
Reporting' and the Disclosure Guidance and Transparency Rules
sourcebook of the United Kingdom's Financial Conduct Authority.
Basis for conclusion
We conducted our review in accordance with International
Standard on Review Engagements (UK) 2410, 'Review of Interim
Financial Information Performed by the Independent Auditor of the
Entity' issued by the Financial Reporting Council for use in the
United Kingdom ("ISRE (UK) 2410"). A review of interim financial
information consists of making enquiries, primarily of persons
responsible for financial and accounting matters, and applying
analytical and other review procedures.
A review is substantially less in scope than an audit conducted
in accordance with International Standards on Auditing (UK) and,
consequently, does not enable us to obtain assurance that we would
become aware of all significant matters that might be identified in
an audit. Accordingly, we do not express an audit opinion.
We have read the other information contained in the Half Year
Results and considered whether it contains any apparent
misstatements or material inconsistencies with the information in
the interim financial statements.
Conclusions relating to going concern
Based on our review procedures, which are less extensive than
those performed in an audit as described in the Basis for
conclusion section of this report, nothing has come to our
attention to suggest that the directors have inappropriately
adopted the going concern basis of accounting or that the directors
have identified material uncertainties relating to going concern
that are not appropriately disclosed. This conclusion is based on
the review procedures performed in accordance with ISRE (UK) 2410.
However, future events or conditions may cause the group to cease
to continue as a going concern.
Responsibilities for the interim financial statements and the
review
Our responsibilities and those of the directors
The Half Year Results, including the interim financial
statements, is the responsibility of, and has been approved by the
directors. The directors are responsible for preparing the Half
Year Results in accordance with the Disclosure Guidance and
Transparency Rules sourcebook of the United Kingdom's Financial
Conduct Authority. In preparing the Half Year Results, including
the interim financial statements, the directors are responsible for
assessing the group's ability to continue as a going concern,
disclosing, as applicable, matters related to going concern and
using the going concern basis of accounting unless the directors
either intend to liquidate the group or to cease operations, or
have no realistic alternative but to do so.
Our responsibility is to express a conclusion on the interim
financial statements in the Half Year Results based on our review.
Our conclusion, including our Conclusions relating to going
concern, is based on procedures that are less extensive than audit
procedures, as described in the Basis for conclusion paragraph of
this report. This report, including the conclusion, has been
prepared for and only for the company for the purpose of complying
with the Disclosure Guidance and Transparency Rules sourcebook of
the United Kingdom's Financial Conduct Authority and for no other
purpose. We do not, in giving this conclusion, accept or assume
responsibility for any other purpose or to any other person to whom
this report is shown or into whose hands it may come save where
expressly agreed by our prior consent in writing.
PricewaterhouseCoopers LLP
Chartered Accountants
London
16 November 2023
Consolidated Income Statement
Unaudited Unaudited Audited
six months to six months to year to
30 September 30 September 31 March
2023 2022 2023
------------------------------- ------------------------------- ---------
Adjustments* Adjustments*
Adjusted* (note 2) Total Adjusted* (note 2) Total Total
Notes GBPm GBPm GBPm GBPm GBPm GBPm GBPm
---------------------------------- ----- --------- ------------ ------ --------- ------------ ------ ---------
Continuing operations
Revenue 2 950.5 - 950.5 875.5 - 875.5 1,852.8
---------------------------------- ----- --------- ------------ ------ --------- ------------ ------ ---------
Operating profit 190.0 (27.8) 162.2 177.9 (26.2) 151.7 308.4
Share of results of associate (0.1) - (0.1) - - - -
Profit on disposal of operations 11 - 0.5 0.5 - - - -
---------------------------------- ----- --------- ------------ ------ --------- ------------ ------ ---------
Profit before interest and
taxation 189.9 (27.3) 162.6 177.9 (26.2) 151.7 308.4
Finance income 3 1.8 - 1.8 0.8 - 0.8 1.8
Finance expense 4 (14.2) - (14.2) (7.0) - (7.0) (18.7)
---------------------------------- ----- --------- ------------ ------ --------- ------------ ------ ---------
Profit before taxation 177.5 (27.3) 150.2 171.7 (26.2) 145.5 291.5
Taxation 5 (38.2) 6.5 (31.7) (36.9) 6.2 (30.7) (57.2)
---------------------------------- ----- --------- ------------ ------ --------- ------------ ------ ---------
Profit for the period 139.3 (20.8) 118.5 134.8 (20.0) 114.8 234.3
---------------------------------- ----- --------- ------------ ------ --------- ------------ ------ ---------
Attributable to:
Owners of the parent 118.5 115.0 234.5
Non-controlling interests - (0.2) (0.2)
Earnings per share from continuing
operations 6
Basic 36.90p 31.39p 35.65p 30.39p 62.04p
Diluted 31.31p 30.35p 61.86p
Dividends in respect of the period 7
Dividends paid and proposed (GBPm) 31.7 29.7 76.3
Per share 8.41p 7.86p 20.20p
---------------------------------- ----- --------- ------------ ------ --------- ------------ ------ ---------
* Adjustments include the amortisation and impairment of
acquired intangible assets; acquisition items; significant
restructuring costs; profit on disposal of operations; and the
associated taxation thereon. Note 9 provides more information on
alternative performance measures.
Consolidated Statement of Comprehensive Income and
Expenditure
Unaudited Unaudited Audited
six months to six months to year to
30 September 30 September 31 March
2023 2022 2023
GBPm GBPm GBPm
--------------------------------------------------------------------------- -------------- -------------- ---------
Profit for the period 118.5 114.8 234.3
Items that will not be reclassified subsequently to the Income Statement:
Actuarial (losses)/gains on defined benefit pension plans (8.2) 3.6 (8.8)
Tax relating to components of other comprehensive income that will not be
reclassified 2.0 (1.4) 1.2
Unrealised changes in the fair value of equity instruments at fair value
through other comprehensive
income - 9.3 6.1
Items that may be reclassified subsequently to the Income Statement:
Effective portion of changes in fair value of cash flow hedges (0.7) (1.7) 1.3
Deferred tax in respect of cash flow hedges accounted for in the hedging
reserve 0.2 0.3 (0.3)
Exchange gains on translation of foreign operations and net investment
hedge 2.4 162.1 45.1
Other comprehensive (expense)/income for the period (4.3) 172.2 44.6
--------------------------------------------------------------------------- -------------- -------------- ---------
Total comprehensive income for the period 114.2 287.0 278.9
--------------------------------------------------------------------------- -------------- -------------- ---------
Attributable to:
Owners of the parent 114.2 287.2 279.2
Non-controlling interests - (0.2) (0.3)
--------------------------------------------------------------------------- -------------- -------------- ---------
The exchange gains of GBP2.4m (six months to 30 September 2022:
GBP162.1m gain; year to 31 March 2023: GBP45.1m gain) include gains
of GBP1.6m (six months to 30 September 2022: GBP28.8m losses; year
to 31 March 2023: GBP7.4m losses), which relate to net investment
hedges.
Consolidated Balance Sheet
Unaudited Unaudited Audited
30 September 30 September 31 March
2023 2022 2023
Notes GBPm GBPm GBPm
---------------------------------------------- ----- ------------- ------------- ---------
Non-current assets
Goodwill 1,157.9 1,101.8 1,120.5
Other intangible assets 481.7 418.6 472.3
Property, plant and equipment 230.2 224.5 222.9
Interests in associates and other investments 20.9 19.8 21.0
Retirement benefit asset 33.6 43.9 38.4
Tax receivable 13 14.7 14.7 14.7
Deferred tax asset 2.9 2.8 3.0
---------------------------------------------- ----- ------------- ------------- ---------
1,941.9 1,826.1 1,892.8
---------------------------------------------- ----- ------------- ------------- ---------
Current assets
Inventories 319.6 308.8 312.4
Trade and other receivables 407.2 389.9 410.7
Tax receivable 2.9 1.9 1.5
Cash and bank balances 136.4 213.4 169.5
Derivative financial instruments 12 0.7 1.2 1.5
---------------------------------------------- ----- ------------- ------------- ---------
866.8 915.2 895.6
---------------------------------------------- ----- ------------- ------------- ---------
Total assets 2,808.7 2,741.3 2,788.4
---------------------------------------------- ----- ------------- ------------- ---------
Current liabilities
Trade and other payables 263.8 256.4 280.7
Borrowings 0.6 78.8 1.0
Lease liabilities 19.5 19.4 19.2
Provisions 22.0 26.5 21.0
Tax liabilities 16.8 15.8 18.4
Derivative financial instruments 12 0.8 3.4 0.9
---------------------------------------------- ----- ------------- ------------- ---------
323.5 400.3 341.2
---------------------------------------------- ----- ------------- ------------- ---------
Net current assets 543.3 514.9 554.4
---------------------------------------------- ----- ------------- ------------- ---------
Non-current liabilities
Borrowings 667.6 545.6 677.3
Lease liabilities 67.6 69.2 68.7
Retirement benefit obligations 0.5 0.7 0.5
Trade and other payables 22.3 21.4 21.9
Provisions 12.0 7.9 9.7
Deferred tax liabilities 64.5 69.2 70.2
---------------------------------------------- ----- ------------- ------------- ---------
834.5 714.0 848.3
---------------------------------------------- ----- ------------- ------------- ---------
Total liabilities 1,158.0 1,114.3 1,189.5
---------------------------------------------- ----- ------------- ------------- ---------
Net assets 1,650.7 1,627.0 1,598.9
---------------------------------------------- ----- ------------- ------------- ---------
Equity
Share capital 38.0 38.0 38.0
Share premium account 23.6 23.6 23.6
Own shares (58.3) (46.3) (46.1)
Capital redemption reserve 0.2 0.2 0.2
Hedging reserve 0.1 (1.8) 0.6
Translation reserve 164.7 279.2 162.3
Other reserves* 4.4 7.6 4.4
Retained earnings* 1,477.7 1,326.3 1,415.8
---------------------------------------------- ----- ------------- ------------- ---------
Equity attributable to owners of the Company 1,650.4 1,626.8 1,598.8
---------------------------------------------- ----- ------------- ------------- ---------
Non-controlling interests 0.3 0.2 0.1
---------------------------------------------- ----- ------------- ------------- ---------
Total equity 1,650.7 1,627.0 1,598.9
---------------------------------------------- ----- ------------- ------------- ---------
* See footnote to the Consolidated Statement of Changes in
Equity.
Consolidated Statement of Changes in Equity
For the six months to 30 September 2023
-----------------------------------------------------------------------------------------------
Share Capital
Share premium Own redemption Hedging Translation Other Retained Non-controlling
capital account shares reserve reserve reserve reserves earnings interests Total
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
----------------- ------- ------- ------ ---------- ------- ----------- -------- -------- --------------- -------
At 1 April 2023
(audited) 38.0 23.6 (46.1) 0.2 0.6 162.3 4.4 1,415.8 0.1 1,598.9
Profit for the
period - - - - - - - 118.5 - 118.5
Other
comprehensive
income and
expense - - - - (0.5) 2.4 - (6.2) - (4.3)
----------------- ------- ------- ------ ---------- ------- ----------- -------- -------- --------------- -------
Total
comprehensive
income/(expense) - - - - (0.5) 2.4 - 112.3 - 114.2
Dividends paid - - - - - - - (46.5) - (46.5)
Share-based
payments charge - - - - - - - 9.2 - 9.2
Deferred tax on
share-based
payment
transactions - - - - - - - (0.3) - (0.3)
Excess tax
deductions
related to
share-based
payments on
exercised options - - - - - - - - - -
Purchase of own
shares - - (19.7) - - - - - - (19.7)
Performance share
plan awards
vested - - 7.5 - - - - (12.6) - (5.1)
Non-controlling
interest arising
on acquisition - - - - - - - - 0.3 0.3
Non-controlling
interest
disposed - - - - - - - (0.2) (0.1) (0.3)
----------------- ------- ------- ------ ---------- ------- ----------- -------- -------- --------------- -------
At 30 September
2023 (unaudited) 38.0 23.6 (58.3) 0.2 0.1 164.7 4.4 1,477.7 0.3 1,650.7
----------------- ------- ------- ------ ---------- ------- ----------- -------- -------- --------------- -------
Own shares are ordinary shares in Halma plc purchased by the
Company and held to fulfil the Company's obligations under the
Company's share plans. As at 30 September 2023, the number of
shares held by the Employee Benefit Trust was 2,471,283 (30
September 2022: 1,913,290 and 31 March 2023: 1,901,415).
The Capital redemption reserve was created on repurchase and
cancellation of the Company's own shares. The Hedging reserve is
used to record the portion of the cumulative net change in fair
value of cash flow hedging instruments that are deemed to be an
effective hedge.
The Translation reserve is used to record the difference arising
from the retranslation of the financial statements of foreign
operations, offset by net investment hedges with a carrying value
of GBP32.3m (30 September 2022: GBP55.3m and 31 March 2023:
GBP33.9m). The Other reserves represent the cumulative fair value
adjustments on equity instruments held at fair value through other
comprehensive income.
For the six months to 30 September 2022
------------------------------------------------------------------------------------------------
Share Capital Non-
Share premium Own redemption Hedging Translation Other Retained controlling
capital account shares reserve reserve reserve reserves earnings interests Total
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
-------------- -------- ------- ------- ---------- -------- ------------ --------- --------- ----------- -------
At 1 April
2022*
(audited) 38.0 23.6 (30.7) 0.2 (0.4) 117.1 (1.7) 1,256.6 0.4 1,403.1
Profit for the
period - - - - - - - 115.0 (0.2) 114.8
Other
comprehensive
income and
expense - - - - (1.4) 162.1 9.3 2.2 - 172.2
-------------- -------- ------- ------- ---------- -------- ------------ --------- --------- ----------- -------
Total
comprehensive
income and
expense - - - - (1.4) 162.1 9.3 117.2 (0.2) 287.0
Dividends paid - - - - - - - (43.6) - (43.6)
Share-based
payments
charge - - - - - - - 7.8 - 7.8
Deferred tax
on
share-based
payment
transactions - - - - - - - (0.8) - (0.8)
Excess tax
deductions
related to
share-based
payments on
exercised
awards - - - - - - - - - -
Purchase of
own shares - - (22.3) - - - - - - (22.3)
Performance
share plan
awards vested - - 6.7 - - - - (10.9) - (4.2)
-------------- -------- ------- ------- ---------- -------- ------------ --------- --------- ----------- -------
At 30
September
2022
(unaudited) 38.0 23.6 (46.3) 0.2 (1.8) 279.2 7.6 1,326.3 0.2 1,627.0
-------------- -------- ------- ------- ---------- -------- ------------ --------- --------- ----------- -------
For the year to 31 March 2023
------------------------------------------------------------------------------------------------
Share Capital Non-
Share premium Own redemption Hedging Translation Other Retained controlling
capital account shares reserve reserve reserve reserves earnings interests Total
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
-------------- -------- ------- ------- ---------- -------- ------------ --------- --------- ----------- -------
At 1 April
2022
(audited) 38.0 23.6 (30.7) 0.2 (0.4) 117.1 (1.7) 1,256.6 0.4 1,403.1
Profit for the
year - - - - - - - 234.5 (0.2) 234.3
Other
comprehensive
income and
expense - - - - 1.0 45.2 6.1 (7.6) (0.1) 44.6
-------------- -------- ------- ------- ---------- -------- ------------ --------- --------- ----------- -------
Total
comprehensive
income and
expense - - - - 1.0 45.2 6.1 226.9 (0.3) 278.9
Dividends paid - - - - - - - (73.3) - (73.3)
Share-based
payments
charge - - - - - - - 17.7 - 17.7
Deferred tax
on
share-based
payment
transactions - - - - - - - (0.7) - (0.7)
Excess tax
deductions
related to
share-based - - - - - - - - - -
payments on
exercised
awards
Purchase of
own shares - - (22.3) - - - - - - (22.3)
Performance
share plan
awards vested - - 6.9 - - - - (11.4) - (4.5)
-------- ------- ------- ---------- -------- ------------ --------- --------- ----------- -------
At 31 March
2023
(audited) 38.0 23.6 (46.1) 0.2 0.6 162.3 4.4 1,415.8 0.1 1,598.9
-------------- -------- ------- ------- ---------- -------- ------------ --------- --------- ----------- -------
* As disclosed in the Annual Report and Accounts for the year
ended 31 March 2023, effective for the year ended 31 March 2022,
the share-based payment reserve, which was previously presented in
Other reserves was amalgamated with Retained earnings, in the
Consolidated Statement of Changes in Equity and the Consolidated
Balance Sheet as permitted by IFRS 2. This resulted in the GBP13.2m
debit in brought forward Other reserves at 1 April 2021 being
transferred to Retained earnings. There is no change in Total
equity from this change, nor the amounts charged or credited to the
reserves during the period, which represents a change in
presentational accounting policy only.
Consolidated Cash Flow Statement
Audited Unaudited Unaudited Audited
year to six months to six months to year to
31 March 30 September 30 September 31 March
2023 2023 2022 2023
Notes GBPm GBPm GBPm
---------------------------------------------------------------- --------- -------------- -------------- ---------
Net cash inflow from operating activities 8 154.0 95.1 258.0
---------------------------------------------------------------- --------- -------------- -------------- ---------
Cash flows from investing activities
Purchase of property, plant and equipment (19.3) (16.2) (29.0)
Purchase of computer software (0.3) (0.4) (0.8)
Purchase of other intangibles (0.3) (0.1) (0.3)
Proceeds from sale of property, plant and equipment and
capitalised
development costs 0.7 1.1 3.1
Development costs capitalised (7.4) (7.1) (15.8)
Interest received 0.7 0.2 0.7
Acquisition of businesses, net of cash acquired* 10 (58.4) (116.4) (320.1)
Disposal of business, net of cash disposed 1.4 - -
Investment in associates and other equity investments - (2.2) (6.7)
---------------------------------------------------------------- --------- -------------- -------------- ---------
Net cash used in investing activities (82.9) (141.1) (368.9)
---------------------------------------------------------------- --------- -------------- -------------- ---------
Cash flows from financing activities
Dividends paid 7 (46.5) (43.6) (73.3)
Purchase of own shares (19.7) (22.3) (22.3)
Interest paid (13.7) (6.4) (17.5)
Loan arrangement fees (0.3) (4.1) (4.1)
Proceeds from bank borrowings 463.1 258.8 451.8
Repayments of bank borrowings (471.5) (361.9) (394.2)
Repayment of acquired debt on acquisition* (2.6) (58.5) (65.1)
Drawdown of loan notes - 338.1 338.1
Repayment of loan notes - - (74.4)
Repayment of lease liabilities, net of interest (9.6) (8.9) (18.0)
---------------------------------------------------------------- --------- -------------- -------------- ---------
Net cash (used in)/from financing activities (100.8) 91.2 121.0
---------------------------------------------------------------- --------- -------------- -------------- ---------
(Decrease)/increase in cash and cash equivalents (29.7) 45.2 10.1
Cash and cash equivalents brought forward 168.5 156.7 156.7
Exchange adjustments (3.0) 9.7 1.7
---------------------------------------------------------------- --------- -------------- -------------- ---------
Cash and cash equivalents carried forward 135.8 211.6 168.5
---------------------------------------------------------------- --------- -------------- -------------- ---------
* We have re-presented the cashflow for the six months to 30
September 2022 to align with the presentation at year end of debt
acquired and immediately settled. This results in a
reclassification of cash outflows of GBP58.5m from investing
activities to financing activities.
Unaudited Unaudited Audited
six months to six months to year to
30 September 30 September 31 March
2023 2022 2023
GBPm GBPm GBPm
-------------------------------------------------------------- -------------- -------------- ---------
Reconciliation of net cash flow to movement in net debt
(Decrease)/increase in cash and cash equivalents (29.7) 45.2 10.1
Net cash outflow/(inflow) from bank borrowings and loan notes 11.0 (176.5) (256.1)
Net debt acquired (2.6) (58.5) (65.1)
Lease liabilities additions and accretion of interest (9.6) (15.2) (24.9)
Lease liabilities acquired (1.1) (3.0) (9.3)
Lease liabilities and interest repaid 11.2 10.2 20.9
Exchange adjustments (1.3) (27.0) 2.5
-------------------------------------------------------------- -------------- -------------- ---------
Increase in net debt (22.1) (224.8) (321.9)
Net debt brought forward (596.7) (274.8) (274.8)
---------
Net debt carried forward (618.8) (499.6) (596.7)
-------------------------------------------------------------- -------------- -------------- ---------
Notes to the Condensed Interim Financial Statements
1 Basis of preparation
General information
The Half Year Report, which includes the Interim Management
Report and Condensed Interim Financial Statements for the six
months to 30 September 2023, was approved by the Directors on 16
November 2023.
Basis of preparation
The Report has been prepared solely to provide additional
information to shareholders as a body to assess the Board's
strategies and the potential for those strategies to succeed. It
should not be relied on by any other party or for any other
purpose.
The Report contains certain forward-looking statements which
have been made by the Directors in good faith using information
available up until the date they approved the Report.
Forward-looking statements should be regarded with caution as by
their nature such statements involve risk and uncertainties
relating to events and circumstances that may occur in the future.
Actual results may differ from those expressed in such statements,
depending on the outcome of these uncertain future events.
The Report has been prepared in accordance with UK adopted
International Accounting Standard 34, 'Interim Financial Reporting'
and the Disclosure Guidance and Transparency Rules sourcebook of
the UK's Financial Conduct Authority. The Report should be read in
conjunction with the annual consolidated financial statements for
the year ended 31 March 2023 which were prepared in accordance with
UK-adopted international accounting standards and with the
requirements of the Companies Act 2006. The same accounting
policies and presentation that were applied in the preparation of
the Group's statutory accounts for the year to 31 March 2023 have
also been applied to the interim consolidated financial statements
with the exception of the policy for taxes on income, which in the
interim period is accrued using the estimated effective tax rates
for the year on profits before taxation before adjustments, with
the tax rates applied to the adjustments being established on an
individual basis for each adjustment.
The figures shown for the year to 31 March 2023 are based on the
Group's statutory accounts for that period and do not constitute
the Group's statutory accounts for that period as defined in
Section 434 of the Companies Act 2006. These statutory accounts,
which were prepared in accordance with international accounting
standards in conformity with the requirements of the Companies Act
2006, have been filed with the Registrar of Companies. The audit
report on those accounts was not qualified, did not include a
reference to any matters to which the Auditor drew attention by way
of emphasis without qualifying the report, and did not contain
statements under Sections 498 (2) or (3) of the Companies Act
2006.
Going concern
The Group's business activities, together with the main trends
and factors likely to affect its future development, performance
and position, and the financial position of the Group as at 30
September 2023, its cash flows, liquidity position and borrowing
facilities are within in the Review of Operations section. In
addition, the Review of Operations section contains further
information concerning the security, currency, interest rates and
maturity of the Group's borrowings.
The financial statements have been prepared on a going concern
basis. In adopting the going concern basis the Directors have
considered all of the above factors, including potential scenarios
and its principal risks and uncertainties set out on note 16. Under
the potential scenarios considered, which includes a severe but
plausible downside scenario, the Group remains within its debt
facilities and the attached financial covenants for the foreseeable
future and the Directors therefore believe, at the time of
approving the financial statements, that the Company is well placed
to manage its business risks successfully and remains a going
concern. The key facts and assumptions in reaching this
determination are summarised below.
Our financial position remains robust with committed facilities
at the balance sheet date totalling approximately GBP933m which
includes a GBP550m Revolving Credit Facility (RCF). The undrawn
committed facilities as at 30 September 2023 amounted to GBP264.9m.
In May 2022 the RCF was refinanced with a maturity date of May
2028, with two one-year extension options, the first of which was
exercised during the period. During May 2022, the Group also
entered into a new Note Purchase Agreement which provided access to
loan notes totalling GBP330m, which were drawn in various
currencies in July 2022. The financial covenants across the
facilities are for leverage (net debt/adjusted EBITDA) of not more
than three and a half times and for adjusted interest cover of not
less than four times.
Our base case scenario has been prepared using forecasts from
each of our companies as well as expectations of cash outflows on
future acquisitions. In addition, a severe but plausible downside
scenario has been modelled showing a decline in trading for the
year ending 31 March 2024. This reduction in trading could be
caused by a significant resurgence in COVID-19 lockdowns or other
geopolitical crises, or continued macroeconomic volatility leading
to further inflation and interest rate increases. In mitigating the
impacts of the downside scenario there are actions that can be
taken which are entirely discretionary to the business such as
reducing acquisitions spend and dividend growth rates. In addition,
the Group has demonstrated strong resilience and flexibility to
manage its overheads and adapt the supply chain during recent
global economic uncertainty. Neither the base case nor severe but
plausible downside scenarios result in a breach of the Group's
available debt facilities or the attached covenants and,
accordingly, the Directors believe there is no material uncertainty
in the use of the going concern assumption and, therefore, deem it
appropriate to continue to adopt the going concern basis of
accounting for at least the next 12-month period.
New accounting standards and policies
The following standards, with an effective date of 1 January
2023, have been adopted without any significant impact on the
amounts reported in these financial statements:
- IFRS 17 Insurance Contracts
- Definition of Accounting Estimates - Amendments to IAS 8
- Disclosure of Accounting Policies - Amendments to IAS 1 and
IFRS Practice Statement 2
- Deferred Tax related to Assets and Liabilities arising from a
Single Transaction - Amendments to IAS 12
- Lease Liability in a Sale and Leaseback - Amendments to IFRS
16
- Classification of Liabilities as Current or Non-current and
Non-current Liabilities with Covenants - Amendments to IAS 1
- Amendments to IAS 12 International Tax Reform Pillar Two Model
Rule
The Group has not early adopted any standard, interpretation or
amendment that was issued but is not yet effective. The Group is
assessing any potential implication, but currently do not expect a
material impact on the Group.
2 Segmental analysis and revenue from contracts with
customers
Sector analysis
The Group has three main reportable segments (Safety,
Environmental & Analysis and Healthcare), which are defined by
markets rather than product type. Each segment includes businesses
with similar operating and market characteristics. These segments
are consistent with the internal reporting as reviewed by the Chief
Executive.
Segment revenue disaggregation (by location of external
customer)
Unaudited six months to 30 September 2023
Revenue by sector and destination (all continuing
operations)
-------------------------------------------------------------------------
Africa,
United Near
States Mainland United Asia and Middle Other
of America Europe Kingdom Pacific East countries Total
GBPm GBPm GBPm GBPm GBPm GBPm GBPm
------------------------- ----------- -------- -------- -------- ----------- ---------- -----
Safety 104.3 119.2 77.4 64.2 20.4 15.2 400.7
Environmental & Analysis 160.6 30.4 42.5 36.0 7.3 7.3 284.1
Healthcare 137.1 53.6 24.3 32.9 6.4 12.0 266.3
Inter-segmental sales - - (0.6) - - - (0.6)
------------------------- ----------- -------- -------- -------- ----------- ---------- -----
Revenue for the period 402.0 203.2 143.6 133.1 34.1 34.5 950.5
------------------------- ----------- -------- -------- -------- ----------- ---------- -----
Unaudited six months to 30 September 2022
Revenue by sector and destination (all continuing
operations)
Africa,
Near
United and
States Mainland United Middle Other
of America Europe Kingdom Asia Pacific East countries Total
GBPm GBPm GBPm GBPm GBPm GBPm GBPm
------------------------- ----------- -------- -------- ------------ ------- ---------- -----
Safety 99.1 98.9 75.6 54.8 14.9 12.1 355.4
Environmental & Analysis 131.3 29.7 37.9 50.8 7.0 7.1 263.8
Healthcare 134.1 41.9 23.8 36.5 7.3 13.1 256.7
Inter-segmental sales (0.3) - (0.1) - - - (0.4)
------------------------- ----------- -------- -------- ------------ ------- ---------- -----
Revenue for the period 364.2 170.5 137.2 142.1 29.2 32.3 875.5
------------------------- ----------- -------- -------- ------------ ------- ---------- -----
Audited year end 31 March 2023
Revenue by sector and destination (all continuing
operations)
---------------------------------------------------------------------------
Africa,
Near
United and
States Mainland United Middle Other
of America Europe Kingdom Asia Pacific East countries Total
GBPm GBPm GBPm GBPm GBPm GBPm GBPm
------------------------- ----------- -------- -------- ------------ ------- ---------- -------
Safety 205.1 217.1 151.4 112.7 33.2 26.1 745.6
Environmental & Analysis 277.0 67.3 79.5 96.7 15.5 16.1 552.1
Healthcare 298.8 92.0 49.2 73.0 14.9 28.5 556.4
Inter-segmental sales (0.1) - (1.2) - - - (1.3)
------------------------- ----------- -------- -------- ------------ ------- ---------- -------
Revenue for the period 780.8 376.4 278.9 282.4 63.6 70.7 1,852.8
------------------------- ----------- -------- -------- ------------ ------- ---------- -------
Inter-segmental sales are charged at prevailing market prices
and have not been disclosed separately by segment as they are not
considered material. The Group does not analyse revenue by product
group. Revenue derived from the rendering of services was GBP50.5m
(six months to 30 September 2022: GBP41.4m; year to 31 March 2023:
GBP105.4m). All revenue was otherwise derived from the sale of
products.
The majority of the Group's revenue is recognised when control
passes at a point in time.
Segment results
Profit (all continuing
operations)
---------------------------------------
Unaudited Unaudited Audited
six months six months year
to to to
30 September 30 September 31 March
2023 2022 2023
GBPm GBPm GBPm
------------------------------------------------------ ------------- ------------- ---------
Segment profit/PBIT before allocation of adjustments*
Safety 89.5 75.4 152.5
Environmental & Analysis 59.3 65.4 134.2
Healthcare 62.4 56.4 130.1
------------------------------------------------------ ------------- ------------- ---------
211.2 197.2 416.8
------------------------------------------------------ ------------- ------------- ---------
Segment profit/PBIT after allocation of adjustments*
Safety 78.6 67.1 123.9
Environmental & Analysis 52.7 58.4 121.5
Healthcare 52.6 45.5 101.6
------------------------------------------------------ ------------- ------------- ---------
Segment profit/PBIT 183.9 171.0 347.0
Central administration costs (21.3) (19.3) (38.6)
Net finance expense (12.4) (6.2) (16.9)
------------------------------------------------------ ------------- ------------- ---------
Group profit before taxation 150.2 145.5 291.5
Taxation (31.7) (30.7) (57.2)
------------------------------------------------------ ------------- ------------- ---------
Profit for the period 118.5 114.8 234.3
------------------------------------------------------ ------------- ------------- ---------
* Adjustments include the amortisation and impairment of
acquired intangible assets; acquisition items; significant
restructuring costs; and profit on disposal of operations. Note 9
provides more information on alternative performance measures.
The accounting policies of the reportable segments are the same
as the Group's accounting policies. Acquisition transaction costs,
adjustments to contingent consideration and inventory acquisition
adjustments (collectively 'acquisition items') are recognised in
the Consolidated Income Statement. Segment profit before these
acquisition items and other adjustments, is disclosed separately
above as this is the measure reported to the Group Chief Executive
for the purpose of allocation of resources and assessment of
segment performance.
These adjustments are analysed as follows:
Unaudited six months to 30 September
2023
----------------- --------------------------------------------------------------------
Acquisition items
----------------- ------------ ------------------------------------------ ------
Disposal
Total of
Release amortisation operations
of charge and
Amortisation Adjustments acquisition and restructuring
of acquired Transaction to contingent adjustments acquisition (note
intangibles costs consideration to inventory items 11) Total
GBPm GBPm GBPm GBPm GBPm GBPm GBPm
----------------- ------------ ----------- -------------- ------------- ------------- -------------- ------
Safety (9.6) (0.6) - (1.2) (11.4) 0.5 (10.9)
Environmental &
Analysis (5.4) (0.5) 0.1 (0.8) (6.6) - (6.6)
Healthcare (8.4) (0.1) (0.4) (0.9) (9.8) - (9.8)
----------------- ------------ ----------- -------------- ------------- ------------- -------------- ------
Total Segment &
Group (23.4) (1.2) (0.3) (2.9) (27.8) 0.5 (27.3)
----------------- ------------ ----------- -------------- ------------- ------------- -------------- ------
The transaction costs arose mainly on the acquisitions during
the period. In Safety, they relate to the acquisitions of Lazer
Safe (GBP0.4m) in the current period and FirePro (GBP0.2m) in the
prior year. In Environmental & Analysis, they relate to the
acquisition of Sewertronics (GBP0.4m) and Visual Imaging Resources
(GBP0.1m). In Healthcare, they related to the acquisition of
Visiometrics in a previous year (GBP0.1m).
Adjustment to contingent consideration comprised of a credit of
GBP0.1m in Environmental & Analysis arising from exchange
differences on balances denominated in Euros. In Healthcare there
was a debit of GBP0.6m arising from an increase in estimates of the
payable for IZI (GBP0.1m) and Spreo (GBP0.5m), partly offset by a
credit arising from exchange differences on balances denominated in
Euros (GBP0.2m).
The GBP2.9m release of inventory acquisition adjustments related
to WEETECH (GBP0.1m), Thermocable (GBP0.4m), FirePro (GBP0.5m) and
Lazer Safe (GBP0.2m) in Safety; Visual Imaging Resources (GBP0.8m)
in Environmental & Analysis; and IZI (GBP0.9m) in Healthcare.
All amounts have been released in relation to IZI, WEETECH and
Thermocable.
Unaudited six months to 30 September
2022
----------------- ------------------------------------------------------------------------
Acquisition items
----------------- ------------ ------------------------------------------ -------
Release Total
of amortisation
fair charge Disposal
Amortisation Adjustments value and of
of acquired Transaction to contingent adjustments acquisition operations
intangibles costs consideration to inventory items and restructuring Total
GBPm GBPm GBPm GBPm GBPm GBPm GBPm
----------------- ------------ ----------- -------------- ------------- ------------- ----------------- -------
Safety (8.1) (0.2) - - (8.3) - (8.3)
Environmental &
Analysis (6.2) (0.6) 0.2 (0.4) (7.0) - (7.0)
Healthcare (9.8) (1.9) 0.8 - (10.9) - (10.9)
----------------- ------------ ----------- -------------- ------------- ------------- ----------------- -------
Total Segment &
Group (24.1) (2.7) 1.0 (0.4) (26.2) - (26.2)
----------------- ------------ ----------- -------------- ------------- ------------- ----------------- -------
Segment results continued
The transaction costs arose mainly on the acquisitions during
the prior period. In Environmental & Analysis, they related to
the acquisition of Deep Trekker (GBP0.6m). In Healthcare, they
mostly related to the acquisition of IZI Medical Products
(GBP1.8m).
Adjustment to contingent consideration comprised of a credit of
GBP0.2m in Environmental & Analysis arising from a decrease in
the estimate of the payable for Orca. In Healthcare there was a
credit of GBP0.8m arising from a decrease in estimates of the
payable for Infinite Leap (GBP0.6m) and a credit arising from
exchange differences on balances denominated in Euros (GBP0.6m),
partially offset by an increase in the estimate of the payable for
Meditech (GBP0.4m).
The GBP0.4m release of fair value adjustments to inventory
related to Deep Trekker (GBP0.3m) and ILT (GBP0.1m) in
Environmental & Analysis. All amounts were released in relation
to Deep Trekker.
Audited year ended 31
March 2023
--------------- ------------------------------------------
Acquisition items
------------------------------------------
Total
amortisation
Amortisation Release and impairment Disposal
and impairment of charge of
of acquired Adjustments fair value and operations
intangible Transaction to contingent adjustments acquisition and
assets costs consideration to inventory items restructuring Total
GBPm GBPm GBPm GBPm GBPm GBPm GBPm
--------------- --------------- ----------- -------------- ------------- --------------- --------------- ------
Safety (25.1) (3.1) - (0.4) (28.6) - (28.6)
Environmental &
Analysis (11.4) (0.9) 0.2 (0.6) (12.7) - (12.7)
Healthcare (20.0) (1.9) (3.9) (2.7) (28.5) - (28.5)
--------------- --------------- ----------- -------------- ------------- --------------- --------------- ------
Total Segment &
Group (56.5) (5.9) (3.7) (3.7) (69.8) - (69.8)
--------------- --------------- ----------- -------------- ------------- --------------- --------------- ------
The transaction costs arose mainly on the acquisitions during
the year to March 2023. In Safety, they related to the acquisition
of FirePro (GBP1.6m), WEETECH (GBP1.0m), Thermocable (GBP0.4m) and
Zonegreen (GBP0.1m). In Environmental & Analysis, they related
to the acquisition of Deep Trekker (GBP0.5m) in the year to March
2023 and Sewertronics (GBP0.4m) that was acquired in May 2023. In
Healthcare, they related to the acquisition of IZI (GBP1.6m) in
year to March 2023, and the acquisition of Visiometrics in a
previous year (GBP0.3m).
The GBP3.7m adjustment to contingent consideration comprised of
a credit of GBP0.2m in Environmental & Analysis arising from a
decrease in the estimate of the payables for Orca (GBP0.2m) and a
debit of GBP3.9m in Healthcare arising from an increase in
estimates of the payables for Infinite Leap (GBP2.7m), IZI
(GBP1.4m) and Meditech (GBP0.3m), partially offset by a decrease in
the estimate of the payable for Clayborn Lab (GBP0.3m) and Spreo
(GBP0.2m).
The GBP3.7m release of fair value adjustments to inventory
related to WEETECH (GBP0.3m) and Thermocable (GBP0.1m) in Safety;
Deep Trekker (GBP0.3m) and International Light Technologies
(GBP0.3m) in Environmental & Analysis; and IZI (GBP2.7m) in
Healthcare. All amounts have been released in relation to
International Light Technologies and Deep Trekker.
3 Finance income
Unaudited Unaudited Audited
six months six months year
to to to
30 September 30 September 31 March
2023 2022 2023
GBPm GBPm GBPm
-------------------------------------------- ------------- ------------- ---------
Interest receivable 0.7 0.3 0.7
Net interest credit on pension plans assets 0.9 0.5 1.1
Fair value movement on derivative financial
instruments 0.2 - -
-------------------------------------------- ------------- ------------- ---------
1.8 0.8 1.8
-------------------------------------------- ------------- ------------- ---------
4 Finance expense
Unaudited Unaudited Audited
six months six months year
to to to
30 September 30 September 31 March
2023 2022 2023
GBPm GBPm GBPm
------------------------------------------------ ------------- ------------- ---------
Interest payable on borrowings 12.0 5.1 14.5
Interest payable on lease obligations 1.6 1.3 2.9
Amortisation of finance costs 0.5 0.3 0.8
Net interest charge on pension plan liabilities - - -
Other interest payable - - 0.1
Fair value movement on derivative financial
instruments 0.1 0.3 0.4
14.2 7.0 18.7
------------------------------------------------ ------------- ------------- ---------
5 Taxation
The total Group tax charge for the six months to 30 September
2023 of GBP31.7m (six months to 30 September 2022: GBP30.7m; year
to 31 March 2023: GBP57.2m) comprises a current tax charge of
GBP43.5m (six months to 30 September 2022: GBP34.4m; year to 31
March 2023: GBP73.7m) and a deferred tax credit of GBP11.8m (six
months to 30 September 2022: deferred tax credit GBP3.7m; year to
31 March 2023: deferred tax credit GBP16.5m). The tax charge is
based on the estimated effective tax rates for the year, for profit
before taxation before adjustments. The tax rates applied to the
adjustments are established on an individual basis for each
adjustment.
The tax charge includes GBP21.5m (six months to 30 September
2022: GBP24.6m; year to 31 March 2023: GBP41.8m) in respect of
overseas tax.
The UK Finance (No. 2) Act 2023, enacted on 11 July 2023,
contains the UK's provisions in relation to a new tax framework
(part of the Organisation for Economic Co-operation and Development
(OECD) BEPS initiative), which introduces a global minimum
effective tax rate of 15% to large multinational groups, effective
for accounting periods beginning on or after 31 December 2023 (year
ended 31 March 2025 for Halma). On 27 September 2023, the UK
Government published additional updated draft legislation, for
technical consultation, relating to these rules. The Group monitors
income tax developments in the territories in which it operates, as
well as the applicable accounting standards, to understand their
potential future impacts. The Group has applied the exemption under
the IAS 12 amendment to recognising and disclosing information
about deferred tax assets and liabilities related to top-up income
taxes.
6 Earnings per ordinary share
Basic earnings per share amounts are calculated by dividing the
net profit for the year attributable to the equity shareholders of
the parent by the weighted average number of ordinary shares
outstanding during the year.
Diluted earnings per share amounts are calculated by dividing
the net profit attributable to the equity shareholders of the
parent by the weighted average number of shares outstanding during
the year plus the weighted average number of shares that would be
in issue on the conversion of all the dilutive potential
shares.
The weighted average number of shares used to calculate both
basic and diluted earnings per share exclude shares held in the
employee benefit trust.
Adjusted earnings are calculated as earnings from continuing
operations excluding the amortisation and impairment of acquired
intangible assets; acquisition items; significant restructuring
costs, profit or loss on disposal of operations and the associated
taxation thereon. The Directors consider that adjusted earnings,
which constitute an alternative performance measure, represent a
more consistent measure of underlying performance as it excludes
amounts not directly linked with trading. A reconciliation of
earnings and the effect on basic and diluted earnings per share
figures is as follows:
Unaudited Unaudited Audited
six months six months year
to to to
30 September 30 September 31 March
2023 2022 2023
GBPm GBPm GBPm
--------------------------------------------------- ------------- ------------- ---------
Earnings from continuing operations attributable
to owners of the parent 118.5 115.0 234.5
Amortisation and impairment of acquired intangible
assets (after tax) 17.6 18.3 42.3
Acquisition transaction costs (after tax) 1.2 2.4 5.3
Adjustments to contingent consideration (after
tax) 0.3 (1.1) 3.8
Release of fair value adjustments to inventory
(after tax) 2.2 0.3 2.7
Disposal of operations and restructuring (after
tax) (0.5) - -
---------
Adjusted earnings attributable to owners of
the parent 139.3 134.9 288.6
--------------------------------------------------- ------------- ------------- ---------
Unaudited Unaudited Audited
six months six months year
to to to
30 September 30 September 31 March
2023 2022 2023
shares, shares, shares,
million million million
------------------------------------------- ------------- ------------- ---------
Weighted average number of ordinary shares
in issue for basic earnings
per share 377.5 378.2 378.0
------------------------------------------- ------------- ------------- ---------
Dilutive potential ordinary shares - share
awards 1.0 0.5 1.1
------------------------------------------- ------------- ------------- ---------
Weighted average number of ordinary shares
in issue for diluted earnings
per share 378.5 378.7 379.1
------------------------------------------- ------------- ------------- ---------
Basic and diluted earnings per share
Per share
---------------------------------------
Unaudited Unaudited Audited
Six months Six months year
to to to
30 September 30 September 31 March
2023 2022 2023
pence pence pence
---------------------------------------------------- ------------- ------------- ---------
Basic earnings per share from continuing operations
attributable to owners of the parent 31.39 30.39 62.04
Amortisation and impairment of acquired intangible
assets (after tax) 4.68 4.84 11.19
Acquisition transaction costs (after tax) 0.31 0.62 1.41
Adjustments to contingent consideration (after
tax) 0.07 (0.29) 1.00
Release of fair value adjustments to inventory
(after tax) 0.59 0.09 0.70
Disposal of operations and restructuring (after
tax) (0.14) - -
---------
Basic adjusted earnings per share attributable
to owners of the parent 36.90 35.65 76.34
---------------------------------------------------- ------------- ------------- ---------
Diluted earnings per share from continuing
operations attributable to owners of the parent 31.31 30.35 61.86
---------------------------------------------------- ------------- ------------- ---------
7 Dividends
Per share
---------------------------------------
Unaudited Unaudited Audited
six months six months year
to to to
30 September 30 September 31 March
2023 2022 2023
pence pence pence
----------------------------------------------- ------------- ------------- ---------
Amounts recognised as distributions and paid
to shareholders in the period
Final dividend for the year to 31 March 2023
(31 March 2022) 12.34 11.53 11.53
Interim dividend for the year to 31 March 2023 - - 7.86
----------------------------------------------- ------------- ------------- ---------
12.34 11.53 19.39
----------------------------------------------- ------------- ------------- ---------
Dividends in respect of the period
Proposed interim dividend for the year to 31
March 2023 (31 March 2022) 8.41 7.86 7.86
Final dividend for the year to 31 March 2023 - - 12.34
----------------------------------------------- ------------- ------------- ---------
8.41 7.86 20.20
----------------------------------------------- ------------- ------------- ---------
Unaudited Unaudited Audited
six months six months year
to to to
30 September 30 September 31 March
2023 2022 2023
GBPm GBPm GBPm
----------------------------------------------- ------------- ------------- ---------
Amounts recognised as distributions and paid
to shareholders in the period
Final dividend for the year to 31 March 2023
(31 March 2022) 46.5 43.6 43.6
Interim dividend for the year to 31 March 2023 - - 29.7
----------------------------------------------- ------------- ------------- ---------
46.5 43.6 73.3
----------------------------------------------- ------------- ------------- ---------
Dividends in respect of the period
Proposed interim dividend for the year to 31
March 2023 (31 March 2022) 31.7 29.7 29.7
Final dividend for the year to 31 March 2023 - - 46.6
----------------------------------------------- ------------- ------------- ---------
31.7 29.7 76.3
----------------------------------------------- ------------- ------------- ---------
8 Notes to the Consolidated Cash Flow Statement
Unaudited Unaudited Audited
six months six months year
to to to
30 September 30 September 31 March
2023 2022 2023
GBPm GBPm GBPm
---------------------------------------------------- ------------- ------------- ---------
Reconciliation of profit from operations to
net cash inflow from operating activities
Profit on continuing operations before finance
income and expense, share of results of associates
and profit or loss on disposal of operations 162.2 151.7 308.4
Non-cash movement on hedging instruments 0.1 - 0.1
Depreciation and impairment of property, plant
and equipment 22.1 21.5 41.5
Amortisation and impairment of computer software 1.0 1.2 2.2
Amortisation of capitalised development costs
and other intangibles 5.1 4.8 9.2
Impairment of capitalised development costs - - 0.5
Amortisation of acquired intangible assets 23.4 24.1 48.7
Impairment of acquired intangible assets - - 7.8
Share-based payment expense less amounts paid 4.7 4.2 12.9
Payments to defined benefit pension plans net
of service costs (2.4) (8.7) (15.1)
Profit on sale of property, plant and equipment
and computer software (0.3) (0.2) (0.8)
---------------------------------------------------- ------------- ------------- ---------
Operating cash flows before movement in working
capital 215.9 198.6 415.4
Increase in inventories (4.3) (42.5) (54.9)
Decrease/(increase) in receivables 8.2 (19.9) (52.4)
(Decrease)/increase in payables and provisions (19.1) (7.4) 15.1
Revision to estimate and exchange difference
on contingent consideration payable less amounts
paid in excess of payable estimated on acquisition (1.1) (2.5) 2.0
---------------------------------------------------- ------------- ------------- ---------
Cash generated from operations 199.6 126.3 325.2
Taxation paid (45.6) (31.2) (67.2)
---------------------------------------------------- ------------- ------------- ---------
Net cash inflow from operating activities 154.0 95.1 258.0
---------------------------------------------------- ------------- ------------- ---------
Unaudited Unaudited Audited
30 September 30 September 31 March
2023 2022 2023
GBPm GBPm GBPm
-------------------------------------------- ------------- ------------- ---------
Analysis of cash and cash equivalents
Cash and bank balances 136.4 213.4 169.5
Overdrafts (included in current borrowings) (0.6) (1.8) (1.0)
-------------------------------------------- ------------- ------------- ---------
Cash and cash equivalents 135.8 211.6 168.5
-------------------------------------------- ------------- ------------- ---------
At Net cash/(debt) Lease At
31 March Cash acquired/ liabilities Exchange 30 September
2023 flow disposed additions adjustments 2023
GBPm GBPm GBPm GBPm GBPm GBPm
----------------------------- --------- ------ --------------- ------------ ------------- -------------
Analysis of net debt
Cash and bank balances 169.5 (31.7) 1.6 - (3.0) 136.4
Overdrafts (1.0) 0.4 - - - (0.6)
----------------------------- --------- ------ --------------- ------------ ------------- -------------
Cash and cash equivalents 168.5 (31.3) 1.6 - (3.0) 135.8
Loan notes falling due after
more than one year (376.9) - - - 0.5 (376.4)
Bank loans falling due after
more than one year (300.4) 11.0 (2.6) - 0.9 (291.1)
Lease liabilities (87.9) 11.2 (1.1) (9.6) 0.3 (87.1)
----------------------------- --------- ------ --------------- ------------ ------------- -------------
Total net debt (596.7) (9.1) (2.1) (9.6) (1.3) (618.8)
----------------------------- --------- ------ --------------- ------------ ------------- -------------
Overdrafts falling due within one year are included as current
borrowings in the Consolidated Balance Sheet. Loan notes and bank
loans falling due after more than one year are included as
non-current borrowings.
During the period, the Group has entered into an uncommitted
multi-currency loan facility up to GBP50m. This allows the Group to
manage short term cash positions more effectively than utilising
the Revolving Credit Facility. As at 30 September 2023 this
facility was undrawn. Drawings and repayments in the period under
this arrangement are presented in 'Proceeds from bank borrowings'
and 'Repayments of bank borrowings' respectively in the
Consolidated Cash Flow Statement.
The Group makes use of short-term money market deposits to
utilise excess cash. Deposits can vary in duration up to three
months but are typically overnight. The deposits are shown within
Cash and cash equivalents.
9 Alternative performance measures
The Board uses certain alternative performance measures to help
it effectively monitor the performance of the Group. The Directors
consider that these represent a more consistent measure of
underlying performance by removing non-trading items that are not
closely related to the Group's trading or operating cash flows.
These measures include Return on Total Invested Capital (ROTIC),
Return on Capital Employed (ROCE), Return on Sales (ROS), organic
growth at constant currency, Earnings before Interest and Tax
(EBIT), net debt, net debt/adjusted EBITDA, Adjusted operating
profit, cash conversion and Adjusted operating cash flow.
Note 2 provides further analysis of the adjusting items in
reaching adjusted profit measures.
Return on Total Invested Capital (ROTIC)
Unaudited Unaudited Audited
six months six months year
to to to
30 September 30 September 31 March
2023 2022 2023
GBPm GBPm GBPm
------------------------------------------------- ------------- ------------- ---------
Profit after tax 118.5 114.8 234.3
Adjustments(1) 20.8 20.0 54.1
------------------------------------------------- ------------- ------------- ---------
Adjusted profit after tax(1) 139.3 134.8 288.4
------------------------------------------------- ------------- ------------- ---------
Total equity 1,650.7 1,627.0 1,598.9
Less net retirement benefit assets (33.1) (43.2) (37.9)
Deferred tax liabilities on retirement benefit
asset 8.4 11.0 9.6
Cumulative fair value adjustments on equity
investments through other comprehensive income (4.4) (7.7) (4.4)
Cumulative amortisation and impairment of
acquired intangible assets 443.5 415.5 418.1
Historical adjustments to goodwill(2) 89.5 89.5 89.5
------------------------------------------------- ------------- ------------- ---------
Total Invested Capital 2,154.6 2,092.1 2,073.8
------------------------------------------------- ------------- ------------- ---------
Average Total Invested Capital(3) 2,114.2 1,954.7 1,945.5
------------------------------------------------- ------------- ------------- ---------
Return on Total Invested Capital (annualised)(4) 13.2% 13.8% 14.8%
------------------------------------------------- ------------- ------------- ---------
Return on Capital Employed (ROCE)
Unaudited Unaudited Audited
six months six months year
to to to
30 September 30 September 31 March
2023 2022 2023
GBPm GBPm GBPm
------------------------------------------------ ------------- ------------- ---------
Profit before tax 150.2 145.5 291.5
Adjustments(1) 27.3 26.2 69.8
Net finance costs 12.4 6.2 16.9
Lease interest (1.6) (1.3) (2.9)
------------------------------------------------ ------------- ------------- ---------
Adjusted operating profit(1) after share
of results of associate 188.3 176.6 375.3
------------------------------------------------ ------------- ------------- ---------
Computer software costs within intangible
assets 2.5 3.4 3.2
Capitalised development costs within intangible
assets 51.3 48.3 49.6
Other intangibles within intangible assets 4.0 3.8 3.4
Property, plant and equipment 230.2 224.5 222.9
Inventories 319.6 308.8 312.4
Trade and other receivables 407.2 389.9 410.7
Current trade and other payables (263.8) (256.4) (280.7)
Current lease liabilities (19.5) (19.4) (19.2)
Current provisions (22.0) (26.5) (21.0)
Net tax receivable/(payable) 0.8 0.8 (2.2)
Non-current trade and other payables (22.3) (21.4) (21.9)
Non-current provisions (12.0) (7.9) (9.7)
Non-current lease liabilities (67.6) (69.2) (68.7)
Add back contingent purchase consideration
provision 20.3 19.5 16.4
------------------------------------------------ ------------- ------------- ---------
Capital Employed 628.7 598.2 595.2
------------------------------------------------ ------------- ------------- ---------
Average Capital Employed(3) 612.0 526.1 524.7
------------------------------------------------ ------------- ------------- ---------
Return on Capital Employed (annualised)(4) 61.6% 67.1% 71.5%
------------------------------------------------ ------------- ------------- ---------
1 Adjustments include the amortisation and impairment of
acquired intangible assets; acquisition items; significant
restructuring costs and profit or loss on disposal of operations.
Where after-tax measures, these also include the associated
taxation on adjusting items.
2 Includes goodwill amortised prior to 3 April 2004 and goodwill taken to reserves.
3 The ROTIC and ROCE measures are expressed as a percentage of
the average of the current period's and prior year's Total Invested
Capital and Capital Employed respectively. Using an average as the
denominator is considered to be more representative. The 1 April
2022 Total Invested Capital and Capital Employed balances were
GBP1,572.8m and GBP389.5m respectively.
4 The ROTIC and ROCE measures are calculated as annualised
Adjusted profit after tax divided by Average Total Invested Capital
and annualised Adjusted operating profit after share of results of
associates divided by Average Capital Employed respectively.
Return on Sales (ROS)
The Group Return on Sales is defined as Adjusted Profit before
Taxation as a percentage of revenue. For the sectors, Return on
Sales is defined as Adjusted segment profit as a percentage of
segment revenue. Adjusted Profit before Taxation and Adjusted
segment profit is as defined in note 2.
Organic growth and constant currency
Organic growth measures the change in revenue and profit from
continuing Group operations. The measure equalises the effect of
acquisitions by:
a. removing from the year of acquisition their entire revenue and profit before taxation,
b. in the following year, removing from the current year, the
revenue and profit for the number of months equivalent to the
pre-acquisition period in the prior year, and
c. removing from the year prior to acquisition any revenue
generated by sales to the acquired company which would have been
eliminated on consolidation had the acquired company been owned for
that period.
The resultant effect is that the acquisitions are removed from
organic results for one full year of ownership.
The results of disposals are removed from the prior period
reported revenue and profit before taxation.
Constant currency measures the change in revenue and profit
excluding the effects of currency movements. The measure restates
the current year's revenue and profit at last year's exchanges
rates.
Organic growth at constant currency has been calculated as
follows:
Adjusted profit* before
Revenue taxation
-------------------------------------- --------------------------------------
Unaudited Unaudited Unaudited Unaudited
six months six months six months six months
to to to to
30 September 30 September 30 September 30 September
2023 2022 2023 2022
GBPm GBPm % growth GBPm GBPm % growth
------------------------------------- ------------- ------------- -------- ------------- ------------- --------
Continuing operations 950.5 875.5 8.6 177.5 171.7 3.4
Acquired and disposed revenue/profit (48.4) (1.8) (8.9) 0.1
------------------------------------- ------------- ------------- -------- ------------- ------------- --------
Organic growth 902.1 873.7 3.3 168.6 171.8 (1.9)
Constant currency adjustment 18.6 3.1
------------------------------------- ------------- ------------- -------- ------------- ------------- --------
Organic growth at constant
currency 920.7 873.7 5.4 171.7 171.8 -
------------------------------------- ------------- ------------- -------- ------------- ------------- --------
* Adjustments include the amortisation of acquired intangible
assets and impairment of acquired intangible assets; significant
acquisition items; significant restructuring costs; and profit or
loss on disposal of operations.
Sector organic growth at constant currency
Organic growth at constant currency is calculated for each
segment using the same method as described above.
Safety
Adjusted* segment
Revenue profit/PBIT
-------------------------------------- --------------------------------------
Unaudited Unaudited Unaudited Unaudited
six months six months six months six months
to to to to
30 September 30 September 30 September 30 September
2023 2022 2023 2022
GBPm GBPm % growth GBPm GBPm % growth
--------------------------- ------------- ------------- -------- ------------- ------------- --------
Continuing operations 400.7 355.4 12.7 89.5 75.4 18.7
Acquisition, disposal and
currency adjustments (22.4) (0.3) (8.8) 0.1
--------------------------- ------------- ------------- -------- ------------- ------------- --------
Organic growth at constant
currency 378.3 355.1 6.5 80.7 75.5 6.9
--------------------------- ------------- ------------- -------- ------------- ------------- --------
Environmental & Analysis
Adjusted* segment
Revenue profit/PBIT
-------------------------------------- --------------------------------------
Unaudited Unaudited Unaudited Unaudited
six months six months six months six months
to to to to
30 September 30 September 30 September 30 September
2023 2022 2023 2022
GBPm GBPm % growth GBPm GBPm % growth
--------------------------- ------------- ------------- -------- ------------- ------------- --------
Continuing operations 284.1 263.8 7.7 59.3 65.4 (9.3)
Acquisition and currency
adjustments 1.3 (1.4) (0.1) -
--------------------------- ------------- ------------- -------- ------------- ------------- --------
Organic growth at constant
currency 285.4 262.4 8.8 59.2 65.4 (9.5)
--------------------------- ------------- ------------- -------- ------------- ------------- --------
Adjusted* segment
Revenue profit/PBIT
-------------------------------------- --------------------------------------
Unaudited Unaudited Unaudited Unaudited
six months six months six months six months
to to to to
30 September 30 September 30 September 30 September
2023 2022 2023 2022
GBPm GBPm % growth GBPm GBPm % growth
--------------------------- ------------- ------------- -------- ------------- ------------- --------
Continuing operations 266.3 256.7 3.7 62.4 56.4 10.6
Acquisition and currency
adjustments (8.7) - (3.2) -
--------------------------- ------------- ------------- -------- ------------- ------------- --------
Organic growth at constant
currency 257.6 256.7 0.3 59.2 56.4 4.9
--------------------------- ------------- ------------- -------- ------------- ------------- --------
Healthcare
* Adjustments include the amortisation of acquired intangible
assets and impairment of acquired intangible assets; acquisition
items; significant restructuring costs; and profit or loss on
disposal of operations.
Earnings before Interest and Tax (EBIT)
EBIT is equal to Profit before interest and taxation as
presented on the face of the Consolidated Income Statement.
Net debt/adjusted EBITDA
Net debt is the leverage defined in the Group's RCF agreement as
Borrowings plus lease liabilities net of Cash and bank balances.
Adjusted EBITDA (Earnings before Interest, Tax, Depreciation and
Amortisation) is used to calculate covenant compliance and
leverage, and is defined in the RCF agreement. The Net
debt/adjusted EBITDA is calculated as annualised EBITDA divided by
net debt.
Unaudited Unaudited Audited
six months six months year
to to to
30 September 30 September 31 March
2023 2022 2023
GBPm GBPm GBPm
----------------------------------------------------- ------------- ------------- ---------
Adjusted operating profit (below) 190.0 177.9 378.2
Add back:
Depreciation, amortisation and impairment (excluding
amortisation and impairment on acquired intangible
assets) 28.2 27.5 53.4
---------
EBITDA 218.2 205.4 431.6
----------------------------------------------------- ------------- ------------- ---------
Net Debt (note 8) 618.8 499.6 596.7
----------------------------------------------------- ------------- ------------- ---------
Net debt/adjusted EBITDA (annualised) ratio 1.4x 1.2x 1.4x
----------------------------------------------------- ------------- ------------- ---------
Adjusted operating profit
Unaudited Unaudited Audited
six months six months year
to to to
30 September 30 September 31 March
2023 2022 2023
GBPm GBPm GBPm
--------------------------------------------------- ------------- ------------- ---------
Operating profit 162.2 151.7 308.4
Add back:
Acquisition items 4.4 2.1 13.3
Amortisation and impairment of acquired intangible
assets 23.4 24.1 56.5
--------------------------------------------------- ------------- ------------- ---------
Adjusted operating profit 190.0 177.9 378.2
--------------------------------------------------- ------------- ------------- ---------
Adjusted operating cash flow
Unaudited Unaudited Audited
six months six months year
to to to
30 September 30 September 31 March
2023 2022 2023
GBPm GBPm GBPm
----------------------------------------------------- ------------- ------------- ---------
Net cash from operating activities (note 8) 154.0 95.1 258.0
Add back:
Net acquisition costs paid 3.1 3.4 4.6
Taxes paid 45.5 31.2 67.2
Proceeds from sale of property, plant and equipment
and capitalised development costs 0.7 1.1 3.1
Share awards vested not settled by own shares* 5.1 4.2 4.5
Deferred consideration paid in excess of payable
estimated on acquisition 1.4 1.4 1.7
Less:
Purchase of property, plant and equipment (excluding
Right of use assets) (19.3) (16.2) (29.0)
Purchase of computer software and other intangibles (0.6) (0.5) (1.1)
Development costs capitalised (7.4) (7.1) (15.8)
Adjusted operating cash flow 182.5 112.6 293.2
----------------------------------------------------- ------------- ------------- ---------
Cash conversion % (adjusted operating cash
flow/adjusted operating profit) 96.1% 63.3% 77.5%
----------------------------------------------------- ------------- ------------- ---------
* See Consolidated Statement of Changes in Equity.
10 Acquisitions
In accounting for acquisitions, adjustments are made to the book
values of the net assets of the companies acquired to reflect their
fair values to the Group. Other previously unrecognised assets and
liabilities at acquisition are included and accounting policies are
aligned with those of the Group where appropriate.
During the six months ended 30 September 2023, the Group made
three acquisitions namely:
1. Sewertronics' Sp. Z o.o.;
2. Lazer Safe Pty. Ltd.; and
3. Certain trade and assets of Visual Imaging Resources LLC.
Set out on the following pages are summaries of the assets
acquired and liabilities assumed and the purchase consideration
of:
a. the total of acquisitions;
b. Sewertronics' Sp. Z o.o.;
c. Lazer Safe Pty. Ltd.;
d. Visual Imaging Resources LLC; and
e. the adjustments in respect of prior year acquisitions.
Due to their contractual dates, the fair value of receivables
acquired (shown below) approximate to the gross contractual amounts
receivable. The amount of gross contractual receivables not
expected to be recovered is immaterial.
There are no material contingent liabilities recognised in
accordance with paragraph 23 of IFRS 3 (revised).
The acquisitions contributed GBP8.0m of revenue and GBP1.5m of
profit after tax for the six months ended 30 September 2023.
If these acquisitions had been held since the start of the
financial year, it is estimated that the Group's reported revenue
and profit after tax would have been GBP4.6m and GBP1.1m higher
respectively.
As at the date of approval of the financial statements, the
accounting for all acquisitions since 1 October 2022, is
provisional; relating to finalisation of the valuation of acquired
intangible assets, the initial consideration, which is subject to
agreement of certain contractual adjustments, and certain other
provisional balances.
a) Total of acquisitions
Unaudited
GBPm
------------------------------------------------------- ---------
Non-current assets
Intangible assets 34.0
Property, plant and equipment 2.3
Deferred tax 0.1
Current assets
Inventories 3.2
Trade and other receivables 3.3
Cash and cash equivalents 1.7
------------------------------------------------------- ---------
Total assets 44.6
------------------------------------------------------- ---------
Current liabilities
Payables (2.6)
Borrowings and lease liabilities (2.7)
Provisions (0.4)
Corporation tax liability (1.0)
Non-current liabilities
Borrowings and lease liabilities (1.0)
Provisions (0.4)
Deferred tax (7.8)
------------------------------------------------------- ---------
Total liabilities (15.9)
------------------------------------------------------- ---------
Net assets of business acquired 28.7
------------------------------------------------------- ---------
Attributable to:
Owners of the Company 28.4
Non-controlling interests 0.3
Initial cash consideration paid 60.4
Other adjustments (1.7)
Retention and other amounts to be (received)/paid (0.1)
Contingent purchase consideration estimated to be paid 6.1
------------------------------------------------------- ---------
Total consideration 64.7
------------------------------------------------------- ---------
Total goodwill 36.3
------------------------------------------------------- ---------
Total goodwill of GBP36.3m comprises GBP35.8m relating to
current year acquisitions and GBP0.5m relating to the prior year
acquisition of WEETECH, FirePro and IZI.
Other adjustments are primarily adjustments for acquired working
capital once balances are fully reconciled, forming part of the
contractual payment mechanisms.
Analysis of cash outflow in the Consolidated Cash Flow
Statement
Unaudited Unaudited Audited
six months six months year
to to to
30 September 30 September 31 March
2023 2022 2023
GBPm GBPm GBPm
------------------------------------------------------ ------------- ------------- -----------
Initial cash consideration paid 60.4 116.0 321.0
Cash acquired on acquisitions (1.7) (4.0) (10.1)
Initial cash consideration adjustment (received)/paid
on current year acquisitions (1.7) 3.0 6.3
Contingent consideration paid in relation to
prior year acquisitions 2.8 2.8 4.6
-----------
Net cash outflow relating to acquisitions 59.8 117.8 321.8
------------------------------------------------------ ------------- ------------- -----------
Included in cash flows from operating activities 1.4 1.4 1.7
Included in cash flows from investing activities 58.4 116.4 320.1
------------------------------------------------------ ------------- ------------- -----------
Contingent consideration included in cash flows from operating
activities reflects amounts paid in excess of that estimated in the
acquisition balance sheets.
In addition, immediately after acquisition the Group repaid
GBP2.6m of debt acquired on acquisition.
b) Sewertronics' Sp. Z o.o.
Unaudited
GBPm
------------------------------------------------------- ----------
Non-current assets
Intangible assets 17.9
Property, plant and equipment 1.1
Deferred tax 0.1
Current assets
Inventories 0.5
Trade and other receivables 1.0
Cash and cash equivalents 1.6
------------------------------------------------------- ----------
Total assets 22.2
------------------------------------------------------- ----------
Current liabilities
Payables (0.1)
Provisions (0.1)
Corporation tax liability (0.8)
Non-current liabilities
Borrowings and lease liabilities (0.5)
Deferred tax (3.3)
------------------------------------------------------- ----------
Total liabilities (4.8)
------------------------------------------------------- ----------
Net assets of businesses acquired 17.4
------------------------------------------------------- ----------
Attributable to:
Owners of the Company 17.1
Non-controlling interests 0.3
------------------------------------------------------- ----------
Initial cash consideration paid 35.7
Contingent purchase consideration estimated to be paid 4.7
------------------------------------------------------- ----------
Total consideration 40.4
------------------------------------------------------- ----------
Total goodwill 23.3
------------------------------------------------------- ----------
On 5 May 2023, the Group acquired the Sewertronics Group
('Sewertronics') for total consideration of EUR46.2m (GBP40.4m).
The acquisition comprised the entire share capital of Sewertronics'
Sp. Z o.o. and 50% of the share capital of Applied Resins Ltd which
results in a non-controlling interest arising from the acquisition.
Maximum contingent consideration of EUR18.0m is payable dependant
on profits achieved each year over the next 2 years to 31 March
2025 of which EUR5.3m (GBP4.7m) represents the fair value of the
estimated amounts payable recognised on acquisition.
The company's technology repairs and rehabilitates wastewater
pipelines without the need to dig a trench, by inserting a lining
into the pipe which is then cured using its innovative and patented
ultraviolet (UV) LED technology. Based in Rzeszów, Poland, the
company has sales and service partners globally and is now part of
the Group's Environmental & Analysis sector.
On acquisition, acquired intangibles were recognised relating to
customer related intangibles GBP11.7m; trade name GBP1.6m and
technology related intangibles GBP3.9m.
The residual goodwill of GBP23.3m represents:
a. the technical expertise of the acquired workforce;
b. the opportunity to leverage this expertise across some of the
Group's businesses through future technologies; and
c. the ability to exploit the Group's existing customer base.
Sewertronics contributed GBP2.0m of revenue and GBP0.8m of
profit after tax for the six months ended 30 September 2023. If
this acquisition had been held since the start of the financial
year, it is estimated that the Group's reported revenue and profit
after tax would have been GBP0.6m higher and GBP0.2m higher
respectively.
Acquisition costs totalling GBP0.4m were recorded in the
Consolidated Income Statement.
The goodwill arising on this acquisition is not expected to be
deductible for tax purposes.
c) Lazer Safe Pty. Ltd.
Unaudited
GBPm
--------------------------------- ---------
Non-current assets
Intangible assets 14.9
Property, plant and equipment 0.5
Current assets
Inventories 1.1
Trade and other receivables 2.0
Cash and cash equivalents 0.1
--------------------------------- ---------
Total assets 18.6
--------------------------------- ---------
Current liabilities
Payables (1.0)
Borrowings and lease liabilities (2.7)
Provisions (0.2)
Non-current liabilities
Borrowings and lease liabilities (0.2)
Provisions (0.4)
Deferred tax (4.5)
--------------------------------- ---------
Total liabilities (9.0)
--------------------------------- ---------
Net assets of business acquired 9.6
--------------------------------- ---------
Initial cash consideration paid 22.3
Other adjustments (1.5)
Amounts to be received (0.4)
--------------------------------- ---------
Total consideration 20.4
--------------------------------- ---------
Total goodwill 10.8
--------------------------------- ---------
On 4 August 2023, the Group acquired the Lazer Safe Group
('Lazer Safe'), for total consideration of A$39.4m (GBP20.4m). The
initial consideration comprised the cash-and debt-free purchase
price of A$45.0m (GBP23.3m) less debt of A$4.9m (GBP2.5m) plus
amounts due from the shareholders of A$2.9m (GBP1.5m). This initial
consideration was adjusted for debt from shareholders of A$2.9m
(GBP1.5m) and closing working capital of A$0.7m (GBP0.4m). The debt
acquired of A$4.9m (GBP2.5m) was settled immediately
post-acquisition. There is no contingent consideration payable.
The acquisition comprised of the entire share capital of Lazer
Safe Investments Pty. Ltd and its subsidiary Lazer Safe Pty. Ltd.
Lazer Safe, based in Perth, Australia, designs and manufactures
control, safety and operator protection systems relating to press
brake and associated sheet metal machinery. The technology is
designed to protect workers when they are operating machinery and
are used in a wide range of industrial markets. Lazer Safe will
continue to be run under its own management team and has become
part of the Group's Safety sector.
On acquisition acquired intangibles were recognised relating to
customer related intangibles GBP9.5m; trade names GBP1.6m and
technology related intangibles GBP3.8m.
The residual goodwill of GBP10.8m represents:
a. the technical expertise of the acquired workforce;
b. the opportunity to leverage this expertise across some of the
Group's businesses through future technologies; and
c. the ability to exploit the Group's existing customer base.
Lazer Safe contributed GBP2.0m of revenue and GBP0.4m of profit
after tax for the six months ended 30 September 2023. If this
acquisition had been held since the start of the financial year, it
is estimated that the Group's reported revenue and profit after tax
would have been GBP3.8m higher and GBP0.9m higher respectively. The
lower margin post-acquisition is due to seasonality.
Acquisition costs totalling GBP0.4m were recorded in the
Consolidated Income Statement.
The goodwill arising on this acquisition is not expected to be
deductible for tax purposes.
d) Visual Imaging Resources LLC
Unaudited
GBPm
------------------------------------------------------- -----------
Non-current assets
Intangible assets 1.6
Property, plant and equipment 0.8
Current assets
Inventories 1.4
Trade and other receivables 0.5
Total assets 4.3
------------------------------------------------------- -----------
Current liabilities
Payables (1.5)
Provisions (0.1)
Non-current liabilities
Borrowings and lease liabilities (0.3)
Deferred tax (0.2)
------------------------------------------------------- -----------
Total liabilities (2.1)
------------------------------------------------------- -----------
Net assets of business acquired 2.2
------------------------------------------------------- -----------
Initial cash consideration paid 2.4
Other adjustments (0.2)
Retention and other amounts to be paid 0.3
Contingent purchase consideration estimated to be paid 1.4
------------------------------------------------------- -----------
Total consideration 3.9
------------------------------------------------------- -----------
Total goodwill 1.7
------------------------------------------------------- -----------
On 24 April 2023, the Group acquired certain trade and assets of
Visual Imaging Resources LLC ('VIR') for an initial cash
consideration of US$3.0m (GBP2.4m), adjustable for working capital
balances determined to be US$0.2m (GBP0.2m) receivable. The
consideration includes a retention amount of US$0.3m (GBP0.3m) held
in place of escrow balances and is due 12 months from the date of
acquisition. Contingent consideration is payable based on gross
margin of a maximum of US$1.2m (GBP1.0m) per year for the three
years ending 31 March 2026. The current contingent consideration
payable represents the fair value of the total estimated amount
payable.
VIR is the USA service and distribution partner for Minicam, a
company in the Group's Environmental & Analysis sector.
The excess of the fair value of the consideration paid over the
fair value of the assets acquired is represented by customer
related intangibles of GBP1.6m; with residual goodwill arising of
GBP1.7m.
VIR contributed GBP4.0m of revenue and GBP0.3m of profit after
tax for the six months ended 30 September 2023. If this acquisition
had been held since the start of the financial year, it is
estimated that the Group's reported revenue and profit after tax
would have been GBP0.2m higher and GBP0.0m higher respectively.
Acquisition costs totalling GBP0.1m were recorded in the
Consolidated Income Statement.
e) Adjustments in respect of prior year acquisitions
Unaudited
Total
GBPm
-------------------------------- ---------
Non-current assets
Intangible assets (0.4)
Property, plant and equipment (0.1)
Current assets
Inventories 0.2
Trade and other receivables (0.2)
-------------------------------- ---------
Total assets (0.5)
-------------------------------- ---------
Current liabilities
Corporation tax liability (0.2)
Non-current liabilities
Deferred tax 0.2
-------------------------------- ---------
Total liabilities -
-------------------------------- ---------
Net assets of business acquired (0.5)
-------------------------------- ---------
Total goodwill 0.5
-------------------------------- ---------
In finalising the acquisition accounting for the prior year
acquisition of WEETECH, an adjustment of GBP0.3m was made to
increase inventories and GBP0.1m was made to reduce property, plant
and equipment. Overall this resulted in a corresponding decrease in
goodwill of GBP0.2m.
In finalising the acquisition accounting for the prior year
acquisition of FirePro, an adjustment of GBP0.2m was made to
increase corporation tax payable. Overall this resulted in a
corresponding increase in goodwill of GBP0.2m.
In finalising the acquisition accounting for the prior year
acquisition of IZI, the following adjustments were made: GBP0.4m
decrease to intangible assets, GBP0.1m decrease to inventory and
GBP0.2m decrease to receivables. There was an adjustment made to
decrease the deferred tax liability of GBP0.2m. Overall this
resulted in an increase in goodwill of GBP0.5m.
The adjustments were not material and as such the comparative
balance sheet was not restated; instead the adjustments have been
made through the current year.
11 Disposal of operations
On 4 August 2023, the Group disposed of its 70% interest in
FireMate Software Pty. Ltd. to a third party for proceeds of
GBP3.2m. This transaction resulted in the recognition of a gain in
the Consolidated Income Statement as follows:
Total
GBPm
-------------------------------------- -----
Proceeds of disposal 3.2
Less: net assets on disposal (1.2)
Less: allocation of goodwill disposed (1.4)
Less: costs of disposal (0.4)
Less: non-controlling interest 0.3
Profit on disposal 0.5
-------------------------------------- -----
Cash received on disposal of operations of GBP1.5m comprised
proceeds of GBP3.2m, less loan note receivable of GBP1.1m, less
GBP0.2m of cash disposed and GBP0.4m of disposal costs. The loan
note receivable accrues interest at 8% per annum and is receivable
in 5 years.
Immediately prior to the disposal, the Group transferred
FireMate's wholly owned subsidiary Nimbus Digital Solutions Ltd
(formerly FireMate Limited) to another Group company. This resulted
in the Group retaining the entity on disposal of FireMate and
extinguishing the non-controlling interest in relation to this
entity.
12 Fair values of financial assets and liabilities
As at 30 September 2023, with the exception of the Group's fixed
rate loan notes, there were no significant differences between the
book value and fair value (as determined by market value) of the
Group's financial assets and liabilities.
The fair value of floating rate borrowings approximates to the
carrying value because interest rates are reset to market rates at
intervals of less than one year.
The fair value of the Group's fixed rate loan notes arising from
the United States Private Placement completed in January 2016 and
the Private Placement completed in May 2022 is estimated to be
GBP341.2m, against a carrying value of GBP376.4m.
The fair value of financial instruments is estimated by
discounting the future contracted cash flow using readily available
market data and represents a level 2 measurement in the fair value
hierarchy under IFRS 7.
As at 30 September 2023, the total forward foreign currency
contracts and swaps outstanding were GBP75.2m. The contracts mostly
mature within one year and therefore the cash flows and resulting
effect on profit and loss are expected to occur within the next 12
months.
The fair values of the forward contracts are disclosed as a
GBP0.7m (30 September 2022: GBP1.2m; 31 March 2023: GBP1.5m) asset
and GBP0.8m (30 September 2022: GBP3.4m; 31 March 2023: GBP0.9m)
liability in the Consolidated Balance Sheet.
Any movements in the fair values of the forward contracts are
recognised in equity until the hedge transaction occurs, when
gains/losses are recycled to finance income or finance expense.
The fair value of equity investments held at fair value through
other comprehensive income is based on the latest observable price
where available. Where there are no recent observable prices,
adjustments are made based on qualitative indicators, such as the
financial performance of the entity, performance against
operational milestones and future outlook. This represents a level
3 measurement in the fair value hierarchy under IFRS 7.
The fair values of the equity instruments held at fair value
through other comprehensive income at 30 September 2023 were
GBP18.9m (30 September 2022: GBP17.6m; 31 March 2023: GBP18.9m).
This is within 'Interests in associates and other investments' on
the Consolidated Balance Sheet.
The fair value adjustment recognised in other comprehensive
income for the six months to 30 September 2023 was GBPNil (six
months to 30 September 2022: gain of GBP9.3m; year to 31 March
2023: gain of GBP6.1m).
13 Contingent liability
Group financing exemptions applicable to UK controlled foreign
companies
On 2 April 2019, the European Commission (EC) published its
final decision that the UK controlled Foreign Company Partial
Exemption (FCPE) constitutes State Aid. As previously reported, the
Group has benefited from the FCPE, which amounts to GBP15.4m of tax
for the period from 1 April 2013 to 31 December 2018.
Appeals had been made by the UK Government, the Group and other
UK-based groups to annul the EC decision. On 8 June 2022, the EU
General Court delivered its decision in favour of the EC. In August
2022, the UK Government appealed this decision.
Notwithstanding this appeal, under EU law, the UK Government is
required to commence collection proceedings. In January 2021, the
Group received a Charging Notice from HM Revenue & Customs
(HMRC) for GBP13.9m assessed for the period from 1 April 2016 to 31
December 2018. The Group has appealed against the notice but, as
there is no right of postponement, the amount charged was paid in
full in February 2021 with a further GBP0.8m of interest paid in
May 2021. In February 2021, the
Group received confirmation from HMRC that it was not a
beneficiary of State Aid for the period from 1 April 2013 to 31
March 2016.
Whilst the EU General Court was in favour of the EC, the Group's
assessment is that there are strong grounds for appeal and it would
expect such appeals to be successful. As the amounts paid are
expected to be fully recovered, the Group continues to recognise a
receivable of GBP14.7m (30 September 2022: GBP14.7m; 31 March 2023:
GBP14.7m) on the Consolidated Balance Sheet within non-current
assets.
Other contingent liabilities
The Group has widespread global operations and is consequently a
defendant in many legal, tax and customs proceedings incidental to
those operations. In addition, there are contingent liabilities
arising in the normal course of business in respect of indemnities,
warranties and guarantees. These contingent liabilities are not
considered to be unusual in the context of the normal operating
activities of the Group. Provisions have been recognised in
accordance with the Group accounting policies where required. None
of these claims are expected to result in a material gain or loss
to the Group.
14 Events subsequent to the end of the reporting period
On 2 October 2023, the Group acquired the entire share capital
of AprioMed AB ('AprioMed'), based in Uppsala, Sweden, for a cash
consideration of SEK130.0m (approximately GBP10m) on a cash-and
debt-free basis. AprioMed manufactures and distributes medical
devices used for bone biopsies. Its products help diagnose patients
suffering from a range of conditions, principally cancer. AprioMed
will be a bolt-on for IZI Medical Products within the Group's
Healthcare Sector.
On 23 October 2023, the Group acquired the entire share capital
of Alpha Instrumatics Holding Company Limited and its subsidiaries
('Alpha Instrumatics'), based in Bradford, UK for a cash
consideration of GBP30.5m on a cash and debt free basis. Additional
deferred consideration is payable in cash, based on its performance
over each of the two financial years to 31 March 2025, up to an
aggregate maximum of GBP5.5m. Alpha Instruments designs and
manufactures devices for high-precision measurement of trace
moisture found in gases. It extends Alicat's product offering in
its existing and adjacent end markets within the Group's
Environmental and Analysis sector.
A detailed purchase price allocation exercise is currently being
performed to calculate the goodwill arising on these
acquisitions.
On 18 October 2023, the Group invested US$2.5m (approximately
GBP2m) in Bloomlife Inc., a maternal and foetal health monitory
company as part of a strategic partnership with Perigen, within the
Group's Healthcare sector. The investment took the form of a
convertible promissory note, bearing interest of 11% per annum and
repayable in 3 years.
There were no other known material non-adjusting events which
occurred between the end of the reporting period and prior to the
authorisation of these financial statements on 16 November
2023.
15 Other matters
Seasonality
The Group's financial results have not historically been subject
to significant seasonal trends.
Equity and borrowings
Issues and repurchases of Halma plc's ordinary shares and
drawdowns and repayments of borrowings are shown in the
Consolidated Cash Flow Statement.
Related party transactions
There were no significant changes in the nature and size of
related party transactions for the period to those reported in the
Annual Report and Accounts 2023.
16 Principal risks and uncertainties
A number of potential risks and uncertainties exist that could
have a material impact on the Group's performance over the second
half of the financial year and could cause actual results to differ
materially from expected and historical results.
The Group has in place processes for identifying, evaluating and
managing key risks. These risks, together with a description of the
approach to mitigating them, are set out on pages 91 to 97 in the
Annual Report and Accounts 2023, which is available on the Group's
website at www.halma.com . The Directors do not consider that the
principal risks and uncertainties have changed since the
publication of the Annual Report and Accounts.
The principal risks and uncertainties relate to:
- Cyber
- Organic growth
- Acquisitions and investments
- Talent and diversity
- Innovation and digital
- Economic and geopolitical uncertainty
- Natural hazards, including climate change
- Business model and its communications
- Non-compliance with laws and regulations
- Financial controls
- Liquidity
- Product failure or Non-compliance
17 Responsibility statement
The Directors confirm that these Condensed Interim Financial
Statements have been prepared in accordance with UK adopted
International Accounting Standard 34, 'Interim Financial Reporting'
and the Disclosure Guidance and Transparency Rules sourcebook of
the United Kingdom's Financial Conduct Authority and that the
interim management report includes a fair review of the information
required by DTR 4.2.7 and DTR 4.2.8, namely:
- an indication of important events that have occurred during
the first six months and their impact on the condensed set of
financial statements, and a description of the principal risks and
uncertainties for the remaining six months of the financial year;
and
- material related party transactions in the first six months
and any material changes in the related party transactions
described in the last annual report.
By order of the Board
Marc Ronchetti Steve Gunning
Group Chief Executive Chief Financial Officer
16 November 2023
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END
IR DDBDBSDBDGXU
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