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The US is FTSE 100 safety products conglomerate Halma’s biggest market, delivering almost half of the company’s total revenue. As the new Trump administration takes office, amid concern about tariffs and global trade, the company is confident that its position across the Atlantic isn’t at risk.
Deputy head of investor relations Melanie Horton told analysts in November that “our companies are selling 90 per cent from the US into the US”. With reference to supply chains, she added that Halma is “sourcing components more locally” than comparable businesses.
In the company’s half-year results that same month, revenue came in above £1bn and adjusted operating profit rose above £200mn for the first time. Its safety and environmental and analysis markets delivered double-digit growth, while healthcare performance was muted.
Annual guidance for “good” organic growth and an adjusted operating profit margin of about 21 per cent, slap bang in the middle of its 19-23 per cent target range, was maintained.
A new chief financial officer will take the reins from April, when Carole Cran, an independent non-executive director who has been on the Halma board for almost a decade, replaces the retiring Steve Gunning. Cran bought £213,000-worth of shares on January 13.
The company’s aim of doubling earnings every five years is underpinned by acquisitions. It has more than 50 operating companies and disclosed in November that it had completed seven acquisitions so far in the current year, for a total of £158mn. Its strategy is to fund acquisitions through cash generation rather than debt.
Analysts at UBS pointed to an “attractive compounding ‘acquire and grow’ investment case” at the business.
Halma trades on 29 times forward consensus earnings. The shares have risen by almost 30 per cent over the past year but are still below the all-time high hit in January 2022.
Schultz buys as JD shares drop
It’s been a grim start to 2025 for Régis Schultz, the chief executive of JD Sports Fashion.
Once a darling of the UK retail scene with a successful international footprint to boot, a tough festive period led to JD last week issuing its second profit warning since November. Like-for-like sales dropped 1.5 per cent in the nine weeks to January 4, with management highlighting a “challenging and volatile market that saw increased promotional activity”.
This moves it further away from the £1bn pre-tax profit target that Schultz expressed confidence in hitting two years ago. At the time this didn’t look like a massive stretch — it declared a headline pre-tax profit for 2023 of £991mn.
But the FactSet consensus forecast for this year is for pre-tax profit to only edge up marginally, from £919mn last year to £936mn.
JD’s shares are down 37 per cent over the past three months and are now at their lowest since Schultz became chief executive in September 2022. They trade at under seven times forecast earnings and a 69 per cent discount to peers, according to UBS.
A £99,000 purchase of almost 110,000 shares by Schultz on January 15 suggests he thinks the sell-off is overdone. Yet despite the drop, UBS downgraded JD’s shares to a neutral rating, stating there were “too many unanswered questions” over its outlook.
JD is suffering partly because of Nike’s poor performance, given that the brand makes up about half of the retailer’s sales.
Schultz told investors that a key US competitor had discounted Nike stock by 20 per cent over the holiday period and that promotional activity “is likely to suppress market growth throughout 2025”.
Since JD plans to stick to its guns and sell at full price, it could be in for another rough year.
