Halma Earnings: Strong First Half Tracking in Line With Our Expectations

Narrow-moat Halma reported 5% organic revenue growth for the first half of its financial year, which is tracking in line with our expectations. Bolt-on acquisitions added a further 5% to top-line growth, removing any concerns about the acquisition pipeline weakening as the business grows. The safety segment was the standout, benefiting from price increases and supply chain constraints that boosted sales (against a high comparable) and profitability. Management expects full-year profit before tax to be approximately GBP 389 million, broadly in line with our forecasts. The shares are trading 4% higher but remain slightly undervalued relative to our GBX 2,310 fair value estimate, which we maintain.