Asia stocks rise, Japan close to record highs on trade deal, tech cheer
Investing.com -- Halma (LON:HLMA) shares jumped more than 8% on Thursday after the company raised its organic revenue growth guidance for fiscal year 2026 and reported full-year EBITA modestly ahead of consensus estimates, with strong performance in its photonics division.
The company now expects “upper single-digit” organic revenue growth for FY26, above the current consensus forecast of 6%.
The company also projected an adjusted EBIT margin “modestly above” the middle of its 19% to 23% target range.
For the fiscal year ended in March, Halma reported EBITA of £486.3m, 2% ahead of consensus estimates of £475m.
Revenue reached £2.25 billion, up 1% compared to market expectations, with organic revenue growth of 9% year over year. EBITA margin rose to 21.6%, an increase of 80 basis points from the prior year.
Adjusted profit before tax was £459.4m, 3% higher than consensus. Adjusted earnings per share increased 14% year over year and came in 2% ahead of estimates.
Net debt, including IFRS 16 lease liabilities, declined by £117.4m to £535.8m, bringing the net debt-to-EBITDA ratio to 0.97x from 1.35x in FY24. Cash conversion was 112%, exceeding the company’s target of 90%.
Research and development spending fell to 4.8% of revenue, compared to 5.3% in FY24.
Jefferies attributed the decline to Avo Photonics, which has a lower level of R&D intensity relative to other parts of the business. Return on total invested capital rose to 15%, up from 14.4% a year earlier.
Jefferies noted that Avo Photonics appeared to grow revenue by about 20% in the second half of FY25 on a half-on-half basis.
Previous guidance had indicated that Avo’s growth would moderate to group levels in FY26, but the new revenue outlook suggests continued strength in the photonics segment.
The analysts said FY26 upgrades are likely to be limited to around 2%, due to the company’s guidance for a 4% foreign exchange headwind to EBITA, which is more adverse than previously modeled.