Halma LON: HLMA reported what management described as a “very strong” full-year 2026 performance, with broad-based organic growth across all three of its sectors and continued rapid expansion in its Photonics business.
Marc opened the results presentation by saying the group had delivered its 23rd consecutive year of profit growth, supported by “the quality of our businesses and the strength of our sustainable growth model.” He said Halma had reinvested “well over GBP 600 million” during the year in areas including research and development, talent and acquisitions.
Carole said the company exceeded its financial targets for the year, excluding a small one-off benefit from the Nuvonic transaction completed in the first half. Organic revenue rose 16.2%, while adjusted EBIT grew 20.3%, including 19% organic growth. The adjusted EBIT margin increased 110 basis points to 22.7%, and earnings per share rose 21%.
Halma also reported 93% cash conversion, ahead of its 90% target, and return on total invested capital of 16.2%, up 120 basis points. R&D spending reached GBP 123 million, equal to 4.7% of group revenue, while acquisitions contributed 8.3% profit growth, ahead of the company’s 5% KPI target.
Photonics Growth Drives Group Performance
A major contributor to Halma’s results was the continued scaling of its Photonics business, acquired through Avo Photonics in 2011. Carole said premium Photonics growth accounted for about eight percentage points of group organic revenue growth in fiscal 2026, resulting in a Photonics growth rate of 52%.
The business works with a large hyperscaler technology customer under a commercially confidential relationship. Carole said the partnership involves “close technical collaboration,” applying the customer’s intellectual property alongside Halma’s expertise in the co-design and manufacture of optical switches. The customer now accounts for 20% of group revenue.
Looking ahead, Halma expects Photonics to contribute about five percentage points to group organic growth in fiscal 2027, implying a further 30% growth rate for the business. Marc said that would represent approximately GBP 160 million of additional revenue and take the business to more than GBP 500 million in revenue.
During the question-and-answer session, Marc said the guidance was based on visibility over the next six to 12 months and reflected customer demand, the pace at which the wider data center market can deploy technology, Halma’s ability to scale and supply chain considerations. He said capacity was not currently the key constraint, but noted the need to scale resources and a broader ecosystem in a fast-growing market.
All Three Sectors Report Growth
In Safety, organic constant-currency revenue rose 6.5%, with growth across all four sub-sectors. Carole cited healthy customer demand in public safety and growth in fire and worker safety. Adjusted profit increased 16%, including 13% organic growth, and the sector margin rose 260 basis points to a record 26.8%.
Safety also invested GBP 56 million in R&D, equal to 6% of sector revenue. Halma acquired E2S for GBP 226 million and Safetec for GBP 64 million during the year, with Carole saying the deals broadened the fire safety portfolio and strengthened Halma’s position in industrial markets.
Environmental & Analysis delivered organic revenue growth of 34.4%, excluding the Nuvonic one-off, with double-digit growth across all three sub-sectors. Carole said Photonics within optical solutions was particularly strong, while environmental monitoring and measurement benefited from demand in the U.S. and Asia for gas detection and management solutions. Water analysis and treatment grew on demand for water infrastructure products and solutions in the U.S. and U.K.
Environmental & Analysis profit rose 30% to GBP 241 million, with the margin down 40 basis points to 23.5% due to mix. R&D investment in the sector rose 23% to GBP 35 million.
Healthcare continued to recover, with organic revenue up 6.3% and profit up 10%. Carole said the sector benefited from improving customer confidence and demand for products and solutions that support patient diagnosis, treatment and efficiency for healthcare providers. The healthcare margin increased 100 basis points to 23.9%.
Record Investment in Acquisitions and R&D
Halma invested GBP 475 million in acquisitions during the year, a record for the group. Carole said organic investment through R&D and capital expenditures totaled GBP 179 million. The company also returned GBP 90 million to shareholders through dividends, marking its 47th consecutive year of dividend growth of at least 5%.
Leverage ended the year at just over one times net debt to EBITDA, which Carole said was within the group’s operating range of up to two times.
Marc said Halma continued to pursue a disciplined acquisition strategy, focused on purpose-aligned companies in niches supported by long-term growth drivers. He highlighted E2S, Brownline, Ultramed and Surgistar as examples of recent deals. Since year-end, Halma has completed two additional bolt-on acquisitions for GBP 75 million.
The company also completed three disposals over the past 12 months: AAI in Safety, Labsphere in Environmental & Analysis and Cardios in Healthcare. Marc said the review process starts with the question, “Would I buy this business today?” He said the disposals allowed Halma to redeploy capital into areas with stronger long-term potential.
Fiscal 2027 Outlook
For fiscal 2027, Carole said Halma has made a positive start, although the economic and geopolitical backdrop remains uncertain and end-market conditions vary across the group. The company expects low double-digit percentage organic constant-currency revenue growth, including about five percentage points from Photonics.
Adjusted EBIT margin is expected to be in line with fiscal 2026, excluding the Nuvonic one-off. In response to analyst questions, Carole said Safety margins had reached a strong level after several years of improvement and should not be assumed to rise further. Healthcare margins may have “a little bit more” room to improve, while Environmental & Analysis margins are expected to remain at a similar level, subject to mix.
Marc said Halma’s objective remains to compound growth at a double-digit rate over the long term, even from a higher base. He said the company is using the period of premium Photonics growth to reinvest in innovation, talent, capabilities and acquisitions across the wider group.
About Halma LON: HLMA
Halma is a global group of life-saving technology companies, focused on growing a safer, cleaner, healthier future for everyone, every day. Its purpose defines the three broad markets it operates in:
- Safety - Protecting people's safety and the environment as populations grow, and enhancing worker safety.
- Environment - Addressing the impacts of climate change, pollution and waste, protecting life-critical resources and supporting scientific research.
- Health - Meeting the increasing demand for better healthcare as chronic illness rises, driven by growing and ageing populations and lifestyle changes.
Halma employs over 9,000 people in more than 20 countries, with major operations in the UK, Mainland Europe, the USA and Asia Pacific.
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