Halma a 'hold' after trading update, says Investec

Halma’s strong performance should not come as a surprise to investors, Investec said on Thursday following the company’s trading update.

The safety, health and environmental technology group said, based on current trading and forecasts, it expected adjusted profit before tax for the year to 2 April to be in line with market expectations.

Halma's board said the company was continuing to benefit from its market diversity, and resilient growth drivers with all four sectors trading in line with the “broad pattern established in the first half of the financial year”.

The Infrastructure Safety, Medical and Environmental & Analysis sectors all made good progress while the Process Safety experienced weakening demand from its oil and gas related customers.

“Halma’ strong performance should not come as a surprise to investors who understand its model, strategy and record, but it is likely to stand in greater contrast to other industrials whose markets are more challenging,” said Investec analyst Michael Blog.

"Today’s in-line Q3 16 trading update extends the record of progress for Halma, a shining beacon in an uncertain Industrial landscape. The shape of trading is very much as in H1, with three sectors advancing and one down.”

Investec expects overall organic constant currency revenue growth of 5% in the second half with margins at least maintained and acquisitions contributing well.

Since the end of the first half, Halma has made three acquisitions including infrastructure safety group Firetrace and medical firms Visiometrics and CenTrak.

Investec reiterated its ‘hold’ rating and target price at 833p.

Shares fell 2.42% to 786p at 1005 GMT.