Halma PLC

Business and Financial Review • Feb 14, 2013

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RNS Number : 9080X

Halma PLC

14 February 2013

HALMA plc

NEW REPORTING SECTORS

14 February 2013

Halma, the leading safety, health and environmental technology group, today announces a change to its Business Sector reporting.

Halma's products "protect life" and "improve the quality of life" in safety, health and environmental markets.  Since 2005, we have reported our business under three sectors including two focused on Safety (Industrial Safety and Infrastructure Sensors) and one on Health and the Environment (Health & Analysis).  All our businesses operate in markets with one or more of our long-term growth drivers: increasing Health & Safety regulation, increasing demand for healthcare and the increasing need for life- critical resources (such as energy and water).

Significant M&A activity in recent years has resulted in the Health & Analysis sector growing from ~30% of Group profit in 2005 to ~50% today.  In future, the current Health & Analysis sector will be reported under two new sectors namely Medical and Environmental & Analysis.  The creation of a separate Medical sector reflects our growing presence in the medical devices market, in particular in ophthalmology and blood pressure monitoring.

The two safety-related sectors, Industrial Safety and Infrastructure Sensors, will be re-named Process Safety and Infrastructure Safety respectively.   

The new reporting sectors are intended to provide greater insight into the products, markets and market growth drivers which are supporting our strong performance and future prospects. 

A summary of these changes together with their continued alignment with Halma's long-term market growth drivers is shown below.

	New Sectors	Old Sectors	Primary Growth Drivers
H&S Regulation	Demand for Healthcare	Need for life-critical resources
"Protect life" (Safety)	Process Safety	Industrial Safety	ü		ü
Infrastructure Safety	Infrastructure Sensors	ü
"Improve the quality of life"  (Health & Environmental)	Medical	Health & Analysis		ü
Environmental & Analysis		ü	ü

These new sectors include subsidiaries with similar end-markets which will continue to help Halma further develop market-driven strategies through collaboration.  The fundamental Group philosophy of giving subsidiaries autonomy and resources to grow independently remains in place.

Group earnings are unaffected by this restatement.  No management changes are directly related to this change.  Halma's full year results for the 52-week period to 30 March 2013 will be reported under the new sectors on 13 June 2013.

Appendix A gives a financial analysis restating Halma's last two full years' and last two half years' revenues and profits before taxation under the new sector headings.  All of these schedules are unaudited although the two full years' results are based on audited accounts (under the old sector headings) which received unqualified audit reports.

Appendix B gives an outline of the alignment of sectors with Halma's major growth drivers and end-markets.

Halma today hosts a Capital Markets event for analysts and investors.  A summary of the presentation is available on www.halma.com.

For further information, please contact: Halma plc Andrew Williams, Chief Executive Kevin Thompson, Finance Director	+44 (0)1494 721111
MHP Communications Rachel Hirst/Andrew Jaques	+44 (0)20 3128 8100

A copy of this announcement, together with other information about Halma, may be viewed on its website: www.halma.com.

NOTE TO EDITORS

1.		Halma develops and markets products used worldwide to protect life and improve the quality of life.  The Group comprises four business sectors:
	·     Process Safety		Products which protect assets and people at work.
	·     Infrastructure Safety		Products which detect hazards to protect assets and people in public spaces and commercial buildings.
	·     Medical		Products used to improve personal and public health.
	·     Environmental & Analysis		Products and technologies for analysis in safety, life sciences and environmental markets.

	The key characteristics of Halma's businesses are that they are based on specialist technology and application knowledge, offering strong growth potential.  Many Group businesses are market leaders in their specialist field.

APPENDIX A

Financial Analysis and Reconciliation by Sector

New reporting sectors:

	26 weeks			52 weeks
	29 September 2012 £000	1 October 2011 £000		31 March 2012 £000	2 April 2011 £000
Revenue
Process Safety	62,535	58,007		122,240	103,058
Infrastructure Safety	100,509	101,102		204,280	197,209
Medical	59,787	48,554		100,361	82,173
Environmental & Analysis	75,499	72,547		153,351	136,165
Inter-segmental sales	(252)	(213)		(349)	(177)
Group revenue	298,078	279,997		579,883	518,428

Segment profit before adjustments*
Process Safety	15,335	13,596		29,226	24,435
Infrastructure Safety	18,907	19,364		39,099	39,023
Medical	15,388	13,152		26,252	20,425
Environmental & Analysis	15,498	14,801		31,596	25,683
	65,128	60,913		126,173	109,566
Segment profit after adjustments*
Process Safety	23,222	13,307		28,627	24,156
Infrastructure Safety	18,907	19,364		39,276	38,981
Medical	11,043	8,263		21,058	15,733
Environmental & Analysis	13,373	13,761		28,721	24,437
Segment Profit	66,545	54,695		117,682	103,307
Central administration costs	(2,548)	(2,849)		(4,266)	(3,917)
Net finance expense	(1,802)	(563)		(1,442)	(1,098)
Group profit before taxation	62,195	51,283		111,974	98,292
Taxation	(12,590)	(11,646)		(25,260)	(25,858)
Group profit after taxation	49,605	39,637		86,714	72,434

* Adjustments include the amortisation of acquired intangible assets, acquisition transaction costs, adjustments to contingent purchase consideration (including any arising from foreign exchange revaluation) and profit on disposal of continuing operations, which are analysed as follows:

						26 weeks to 29 September 2012
		Acquisition costs
	Amortisation of acquired intangible assets £000	Transaction costs  £000	Adjustments to contingent consideration £000	Total amortisation charge and acquisition costs £000	Disposal of continuing operations £000	Total £000
Process Safety	(301)	-	-	(301)	8,188	7,887
Infrastructure Safety	-	-	-	-	-	-
Medical	(4,298)	(1,173)	1,126	(4,345)	-	(4,345)
Environmental  & Analysis	(1,830)	(295)	-	(2,125)	-	(2,125)
Total Group	(6,429)	(1,468)	1,126	(6,771)	8,188	1,417

							26 weeks to 1 October 2011
		Acquisition costs
	Amortisation of acquired intangible assets £000	Transaction costs  £000		Adjustments to contingent consideration £000	Total amortisation charge and acquisition costs £000	Disposal of continuing operations £000	Total £000
Process Safety	(244)	(45)		-	(289)	-	(289)
Infrastructure Safety	-	-		-	-	-	-
Medical	(3,866)	(61)		(962)	(4,889)	-	(4,889)
Environmental & Analysis	(1,035)	(5)		-	(1,040)	-	(1,040)
Total Group	(5,145)	(111)		(962)	(6,218)	-	(6,218)

							52 weeks to 31 March 2012
		Acquisition costs
	Amortisation of acquired intangible assets £000	Transaction costs  £000		Adjustments to contingent consideration £000	Total amortisation charge and acquisition costs £000	Disposal of continuing operations £000	Total £000
Process Safety	(548)	(51)		-	(599)	-	(599)
Infrastructure Safety	-	-		177	177	-	177
Medical	(7,599)	(409)		(729)	(8,737)	3,543	(5,194)
Environmental & Analysis	(2,205)	(258)		(412)	(2,875)	-	(2,875)
Total Group	(10,352)	(718)		(964)	(12,034)	3,543	(8,491)

						52 weeks to 2 April 2011
		Acquisition costs
	Amortisation of acquired intangible assets £000	Transaction costs  £000	Adjustments to contingent consideration £000	Total amortisation charge and acquisition costs £000	Disposal of continuing operations £000	Total £000
Process Safety	(279)	-	-	(279)	-	(279)
Infrastructure Safety	-	(42)	-	(42)	-	(42)
Medical	(3,278)	(1,183)	(231)	(4,692)	-	(4,692)
Environmental & Analysis	(1,203)	(43)	-	(1,246)	-	(1,246)
Total Group	(4,760)	(1,268)	(231)	(6,259)	-	(6,259)

Reconciliation of old to new sectors:

The former Health & Analysis sector's results comprise the combined results of the Medical and Environmental & Analysis sectors.  Process Safety (formerly Industrial Safety) and Infrastructure Safety (formerly Infrastructure Sensors) sectors' results are unchanged.  Therefore, reconciliations to only the Health & Analysis sector's results are shown below.

	26 weeks			52 weeks
	29 September 2012 £000	1 October 2011 £000		31 March 2012 £000	2 April 2011 £000
Revenue
Medical	59,787	48,554		100,361	82,173
Environmental & Analysis	75,499	72,547		153,351	136,165
Inter-segmental sales between Medical and Environmental & Analysis	(129)	(31)		(65)	(8)
Total (formerly Health & Analysis)	135,157	121,070		253,647	218,330

Segment profit before adjustments*
Medical	15,388	13,152		26,252	20,425
Environmental & Analysis	15,498	14,801		31,596	25,683
Total (formerly Health & Analysis)	30,886	27,953		57,848	46,108
Segment profit after adjustments*
Medical	11,043	8,263		21,058	15,733
Environmental & Analysis	13,373	13,761		28,721	24,437
Total (formerly Health & Analysis)	24,416	22,024		49,779	40,170

* Adjustments include the amortisation of acquired intangible assets, acquisition transaction costs, adjustments to contingent purchase consideration (including any arising from foreign exchange revaluation) and profit on disposal of continuing operations.

APPENDIX B

Growth drivers and major end-markets by sector

	Halma Growth Drivers			Major end-markets
	Health & Safety	Healthcare	Life-critical resources
Process Safety	ü		ü	Oil & Gas; Process industries
Infrastructure Safety	ü			Fire; Access control & safety
Medical		ü		Ophthalmology; Blood pressure monitoring
Environmental & Analysis		ü	ü	Water, Scientific research & analysis (including Life Sciences); Environmental monitoring

ENDS

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