Halma made good progress in its latest year said broker Shore Capital, with record revenue/profit for the 21st consecutive year.
Importantly, Halma continues to see good organic momentum and has made a positive start to the current year with a strong order book (Shore Cap believes 8-10+ weeks/visibility).
Order intake is ahead and close to year-to-date revenue, while Halma expects to continue to deliver continued good organic currency growth with adj. EBIT margin is 21%, which implies a 2-3% upgrade to previous numbers.
The M&A pipeline remains ‘healthy’ across all three sectors and current dynamics provide the croup with opportunities to further accelerate its strategy, noting the average cost of debt is still relatively low.
“Assuming Halma can grow adj. EPS by around 10% per annum (split organically and acquisition), 2,350p is the fair value share price target with a hold recommendation.
Shares today were up 12.7% at 2,649p.