Interim Results - Pre-tax Profit Up 6%

Halma PLC 7 December 1999 GROUP RESULTS FOR THE 26 WEEKS TO 2 OCTOBER 1999 HALMA p.l.c. CHAIRMAN'S STATEMENT RESULTS In the Chairman's Statement in the 1999 Annual Report I expressed the view that we should be able to look to the future with confidence. I am very pleased, therefore, to report that for the twenty-fourth consecutive year the Group has produced record interim profits. Pre-tax profits increased by 6% to £20.2 million and earnings per share by 6% to 3.90p, both figures being before exceptional items and goodwill amortisation. Sales turnover increased to £110.0 million and overseas sales, having increased by 5% to £69.7 million, now amount to 63% of total Group sales which is also a new record. CASH FLOW Cash flow continued to be strong and, having spent £12.0 million on acquisitions during the first half, the Group's net cash balance as at the end of the half year was £21.2 million. TRADING PATTERN It is worthy of comment that in the five-year period from October 1994 the Group has spent some £60 million cash on acquisitions, of which approximately 75% has been overseas and 25% within the UK. The trading figures reflect this picture, with an increasing proportion of Group sales being produced overseas. Within this pattern, growth of sales turnover in the USA remained strong, Europe, excluding the UK, recorded a steady increase and the Far East and Australasia, whilst not recovering the record levels of two years ago, have stabilised and again look promising. ACQUISITION AND DEVELOPMENT The businesses which were acquired during the year to March 1999 have all continued to perform very satisfactorily. During the current financial year a further three significant acquisitions have been completed, each of which supplements the Group's existing strength in a designated growth sector. Three major Group companies are already well established in the specialist field of elevator safety. The acquisition of E-Motive Display Pte Ltd in Singapore and T. L. Jones Limited in New Zealand has added further strength in this area. The acquisition of Oklahoma Safety Equipment Co., Inc. adds to the Group's already strong position in emergency pressure relief devices. During the first half, two subsidiary companies, American Tech Manufacturing Corporation and Tradinco Instrumenten-Apparaten B.V., were sold and a further two companies, Marathon Monitors Inc. and Standard Cressall Limited, were materially re-organised. Those costs of the programme which were exceptional items were comfortably within the estimates set out in the Annual Report and all other costs have been fully provided within the half year figures. BUY-BACK OF SHARES A key factor in the Group's highly successful strategy over an extended period has been the use of internally generated funds to finance acquisitions for cash. Second only to continuing investment in our existing subsidiary companies, this remains the optimum use of our surplus cash. However, purchase of our own shares for cancellation provides an additional option when the arithmetic favours this. Following approval by shareholders at the AGM in August, it is intended to allocate initially up to £5 million for this purpose as and when appropriate buying opportunities present themselves. PREFERENCE SHARES Early in the second half the Company's Preference shares have been cancelled and repaid in accordance with the programme approved at the AGM. The cost of redemption was £0.6 million and the impact on our on-going results will be marginally favourable. DIVIDENDS The Directors have again authorised a 20% increase in the net interim dividend per share. This is now the twenty-second consecutive year in which the dividend per share has increased by 20% or more. This interim dividend, which will amount to 1.57p per share, will be paid on 7 February 2000 to shareholders on the register at the close of business on 6 January 2000. PROSPECTS A review of the prospects for the second half of the year as against the results for the first half suggests a number of favourable factors. The first half comprised 26 weeks as against 27 weeks in the comparative period. Also the cumulative impact of our acquisition activities and of the above mentioned disposals and re-organisations should be more apparent in the second half. These factors, allied to continuing resilient performances from many of the subsidiary companies, should provide a solid platform for the Group's second half results. David S Barber 7 December 1999 Chairman CONSOLIDATED PROFIT AND LOSS ACCOUNT £000 Unaudited 26 weeks to 2 October 1999 Before Unaudited Audited except'l 27 weeks 53 weeks items and to to goodwill Except'l Goodwill 3 October 3 April amortis'n items amortis'n Total 1998 1999 Notes TURNOVER 109,991 - - 109,991 106,341 217,758 ======= ======= ======= ======= ======= ======= OPERATING PROFIT BEFORE GOODWILL AMORTISATION 19,907 - - 19,907 18,695 40,777 Goodwill amortisation 2 - - (481) (481) (121) (276) _______ _______ _______ _______ _______ _______ OPERATING PROFIT 19,907 - (481) 19,426 18,574 40,501 EXCEPTIONAL ITEMS 3 Costs of closure and sale of businesses - (3,302) - (3,302) - - Related goodwill adjustment - (4,732) - (4,732) - - _______ _______ _______ _______ _______ _______ Loss on closure and sale of businesses - (8,034) - (8,034) - - _______ _______ _______ _______ _______ _______ 19,907 (8,034) (481) 11,392 18,574 40,501 Interest 318 - - 318 459 1,046 _______ _______ _______ _______ _______ _______ PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION 20,225 (8,034) (481) 11,710 19,033 41,547 Taxation 4 (6,128) 891 - (5,237) (5,842) (12,959) _______ _______ _______ _______ _______ _______ PROFIT FOR THE FINANCIAL PERIOD 14,097 (7,143) (481) 6,473 13,191 28,588 _______ _______ _______ _______ _______ _______ DIVIDENDS Preference dividends (19) (19) (38) Ordinary dividends (5,681) (4,726) (12,021) _______ _______ _______ PROFIT TRANSFERRED TO RESERVES 773 8,446 16,529 ======= ======= ======= ORDINARY DIVIDENDS PER SHARE 1.570p 1.308p 3.327p EARNINGS PER ORDINARY SHARE BEFORE EXCEPTIONAL ITEMS AND GOODWILL AMORTISATION 3.90p 3.68p 7.99p EARNINGS PER ORDINARY SHARE 1.79p 3.65p 7.91p DILUTED EARNINGS PER ORDINARY SHARE 1.78p 3.64p 7.88p CONSOLIDATED BALANCE SHEET £000 Unaudited Unaudited Audited 2 October 3 October 3 April Notes 1999 1998 1999 FIXED ASSETS Intangible assets 2 26,353 6,801 14,058 Tangible assets 40,486 39,758 40,644 _______ _______ _______ 66,839 46,559 54,702 _______ _______ _______ CURRENT ASSETS Stocks 33,745 32,927 34,790 Debtors 55,019 50,779 59,530 Cash and short-term deposits 27,835 29,065 29,894 _______ _______ _______ 116,599 112,771 124,214 _______ _______ _______ CREDITORS: AMOUNTS FALLING DUE DUE WITHIN ONE YEAR Borrowings 6,646 7,295 7,730 Dividends payable 5,676 4,722 7,294 Current taxation 14,618 12,772 11,927 Creditors 32,220 27,599 33,639 _______ _______ _______ 59,160 52,388 60,590 _______ _______ _______ NET CURRENT ASSETS 57,439 60,383 63,624 _______ _______ _______ TOTAL ASSETS LESS CURRENT LIABILITIES 124,278 106,942 118,326 CREDITORS: AMOUNTS FALLING DUE AFTER ONE YEAR 3,374 - 2,167 _______ _______ _______ 120,904 106,942 116,159 ======= ======= ======= CAPITAL AND RESERVES Called up share capital 36,500 36,440 36,473 Share premium account 1,012 718 894 Profit and loss account 83,392 69,784 78,792 _______ _______ _______ SHAREHOLDERS' FUNDS (INCLUDING NON-EQUITY INTERESTS) 5 120,904 106,942 116,159 ======= ======= ======= CONSOLIDATED CASH FLOW STATEMENT £000 Unaudited Unaudited Audited 26 weeks 27 weeks 53 weeks to to to 2 October 3 October 3 April Notes 1999 1998 1999 CASH FLOW FROM OPERATING ACTIVITIES 6 22,042 19,536 42,972 RETURN ON INVESTMENTS AND SERVICING OF FINANCE Interest received 686 729 1,690 Interest paid (318) (266) (632) Preference dividends paid (19) (38) (57) _______ _______ _______ 349 425 1,001 _______ _______ _______ TAXATION Current taxation paid (2,794) (3,016) (10,998) CAPITAL EXPENDITURE Purchase of tangible fixed assets (3,762) (3,353) (6,960) Sale of tangible fixed assets 645 476 796 _______ _______ _______ (3,117) (2,877) (6,164) _______ _______ _______ ACQUISITIONS AND DISPOSALS Acquisition of businesses (11,981) (7,357) (14,622) Cash and overdrafts acquired 192 751 822 Sale of businesses 949 165 282 Overdrafts sold 313 - - _______ _______ _______ (10,527) (6,441) (13,518) _______ _______ _______ EQUITY DIVIDENDS PAID (7,299) (6,072) (10,795) _______ _______ _______ (1,346) 1,555 2,498 _______ _______ _______ MANAGEMENT OF LIQUID RESOURCES Decrease/(increase) in short-term deposits 2,336 (6,815) (7,282) FINANCING Issue of ordinary share capital 145 125 334 (Decrease)/increase in loans (770) 4,359 3,312 _______ _______ _______ (625) 4,484 3,646 _______ _______ _______ INCREASE/(DECREASE) IN CASH 6 365 (776) (1,138) ======= ======= ======= SEGMENTAL ANALYSIS £000 GEOGRAPHICAL ANALYSIS By destination By origin Unaudited Unaudited Unaudited Unaudited 26 weeks 27 weeks 26 weeks 27 weeks to to to to 2 October 3 October 2 October 3 October 1999 1998 1999 1998 TURNOVER United Kingdom 40,333 40,087 74,462 76,456 United States of America 31,047 27,660 31,030 27,365 Europe excluding UK 21,728 20,896 8,471 8,396 Far East and Australasia 10,342 10,353 3,619 2,221 Africa, Near and Middle East 2,858 3,813 - - Other 3,683 3,532 1,487 895 Inter-segmental sales - - (9,078) (8,992) _______ _______ _______ _______ 109,991 106,341 109,991 106,341 ======= ======= ======= ======= PROFIT BEFORE TAXATION United Kingdom 12,925 13,822 United States of America 5,627 4,036 Other countries 1,355 837 _______ _______ 19,907 18,695 Goodwill amortisation (481) (121) Exceptional items (8,034) - Interest 318 459 _______ _______ Profit on ordinary activities before taxation 11,710 19,033 ======= ======= SECTOR ANALYSIS Unaudited Unaudited 26 weeks 27 weeks to to 2 October 3 October 1999 1998 TURNOVER Detection 52,018 51,278 Protection 49,299 47,075 Other 8,982 8,411 Inter-segmental sales (308) (423) _______ _______ 109,991 106,341 ======= ======= PROFIT BEFORE TAXATION Detection 9,030 8,659 Protection 8,750 8,205 Other including holding companies 2,127 1,831 _______ _______ 19,907 18,695 Goodwill amortisation (481) (121) Exceptional items (8,034) - Interest 318 459 _______ _______ Profit on ordinary activities before taxation 11,710 19,033 ======= ======= NOTES ON THE INTERIM REPORT £000 1 BASIS OF PREPARATION The interim report for the 26 weeks to 2 October 1999 is prepared on the basis of the accounting policies set out in the accounts for the 53 weeks to 3 April 1999, except for the adoption of accounting standards applicable since that date. The figures shown for the 53 weeks to 3 April 1999 are an abridged version of the Group's statutory accounts, which received an unqualified auditors' report and have been filed with the Registrar of Companies. 2 INTANGIBLE ASSETS Goodwill arising on acquisitions after 28 March 1998 is capitalised and is classified as an intangible asset in the Consolidated Balance Sheet. Capitalised goodwill is amortised through the Consolidated Profit and Loss Account on a straight line basis over 20 years. Goodwill arising on earlier acquisitions has not been restated. 3 EXCEPTIONAL ITEMS Exceptional items arise on the closure and sale of parts of the business of Marathon Monitors Inc., the sale of the business of American Tech Manufacturing Corporation and the shoe machinery business of Standard Cressall Limited, and the sale of the entire share capital of Tradinco Instrumenten-Apparaten B.V. 4 TAXATION The tax charge for the 26 weeks to 2 October 1999 of £5,237,000 is based on the estimated effective tax rate for the year and includes £1,139,000 (1998: £1,379,000) in respect of overseas tax. The tax credit on exceptional items predominantly relates to overseas tax. 5 RECONCILIATION OF SHAREHOLDERS' FUNDS Unaudited Unaudited Audited 26 weeks 27 weeks 53 weeks to to to 2 October 3 October 3 April 1999 1998 1999 SHAREHOLDERS' FUNDS BROUGHT FORWARD 116,159 98,249 98,249 Profit transferred to reserves 773 8,446 16,529 Net proceeds of shares issued 145 125 334 Goodwill adjustment on closure and sale of businesses 4,732 - - Exchange adjustments (905) 122 1,047 _______ _______ _______ SHAREHOLDERS' FUNDS CARRIED FORWARD 120,904 106,942 116,159 _______ _______ _______ The only non-equity interest included within shareholders' funds is £344,000 (1998: £344,000) 11% cumulative preference share capital which was cancelled and repaid in October 1999. 6 NOTES ON CASH FLOW STATEMENT Unaudited Unaudited Audited 26 weeks 27 weeks 53 weeks to to to 2 October 3 October 3 April 1999 1998 1999 RECONCILIATION OF OPERATING PROFIT TO NET CASH INFLOW FROM OPERATING ACTIVITIES Operating profit 19,426 18,574 40,501 Depreciation 3,001 2,866 5,748 Goodwill amortisation 481 121 276 (Profit)/loss on sale of tangible fixed assets (60) 23 58 Increase in stocks (654) (2,809) (2,632) Decrease in debtors 5,053 7,620 294 Decrease in creditors (4,752) (6,322) (582) Net cash flow relating to exceptional items (453) (537) (691) _______ _______ _______ Net cash inflow from operating activities 22,042 19,536 42,972 _______ _______ _______ RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET CASH Increase/(decrease) in cash 365 (776) (1,138) (Decrease)/increase in liquid resources (2,336) 6,815 7,282 Short-term deposits acquired 227 - - Loans acquired (126) - (281) Cash outflow/(inflow) from loans 770 (4,359) (3,312) Exchange adjustments 125 235 (242) _______ _______ _______ (975) 1,915 2,309 Net cash brought forward 22,164 19,855 19,855 _______ _______ _______ Net cash carried forward 21,189 21,770 22,164 _______ _______ _______ 7 MILLENNIUM Each Group company has assessed the impact of the Millennium software issue on information systems and other aspects of its operations and is responsible for ensuring that necessary actions are being taken to address any issues in a timely manner. Issues arising in each Group company in relation to the Millennium are discussed, evaluated and monitored principally by the Divisional Finance Directors who report individual division's progress to Head Office. The Audit Committee reviews the progress. It should be noted that Group companies are stand-alone businesses and predominantly use standard computer software. Each Group company has assessed its own position and all significant systems and products are already Millennium compliant. As regards Millennium issues relating to key customers and suppliers, each Group company has assessed the risk to its business and sought assurances of Millennium compliance. Because internal and external assurances can never be absolute and Group companies may be adversely affected by the inability of third parties to manage Millennium issues, contingency plans have been developed to mitigate risk. The total incremental costs to the Group to address all identified issues is not significant. A copy of the Interim Report will be sent to all shareholders and will be available to the general public on written request to the Company's registered office at: Misbourne Court Rectory Way Amersham Bucks HP7 0DE Contact for further information: Mr Stephen R O'Shea Chief Executive, Halma p.l.c. Tel: +44 (0)1494 721111

Companies

Halma (HLMA)
UK 100
FTSE quotes by TradingView

Latest directors dealings

All directors dealings today