Halma PLC HLMA Half Yearly Report

  Halma PLC (HLMA) - Half Yearly Report

RNS Number : 4937R
Halma PLC
20 November 2012




                                  HALMA plc

                                      

            HALF YEAR REPORT FOR THE 26 WEEKS TO 29 SEPTEMBER 2012

                                      

                               20 NOVEMBER 2012

                                      

                 Record results and continued dividend growth

                                      

                                      

Halma, the leading safety, health and environmental technology group, today
announces its half year results for the 26weeks to 29 September 2012.







Highlights include:


 Adjusted pre-tax profit from continuing operations^1 up 6% to £60.8m
  (2011/12: £57.5m) on revenue up 6% at £298.1m (2011/12: £280.0m).
●
 

● Organic growth^2 at constant currency: Profit up 3%, Revenue up 3%.
● Strong growth in Asia Pacific and Australasia with revenue up 17% including
  32% growth in China. Good overall revenue performance in developed regions,
  with USA up 19% offsetting weaker demand in UK and Europe.
● Health and Analysis and Industrial Safety Sectors performed strongly with
  double-digit profit growth. Infrastructure Sensors profit marginally lower
  - Elevator Safety reorganisation completed on schedule.
 

● High level of returns maintained: Return on Sales^3 of 20.4% (2011/12:
  20.5%), Return on Total Invested Capital of 16.4% (2011/12: 16.9%) and
  Return on Capital Employed of 71.6% (2011/12: 68.8%).
● Three acquisitions and one disposal completed during the period, acquisition
  pipeline remains healthy.
 Adjusted earnings per share from continuing operations^4 up 5% to 12.34p
  (2011/12: 11.75p). Statutory earnings per share up 25% to 13.14p (2011/12:
● 10.52p).
● Interim dividend of 4.06p per share, up 7% (2011/12: 3.79p).
● Net debt of £74m at period end (March 2012: £19m). Borrowing facilities of
  £260m in place until 2016, providing significant financial capacity for
  further organic growth and value adding acquisitions.







Andrew Williams, Chief Executive of Halma, commented:

"Halma made good progress during the period, achieving record revenue and
profit and strong returns.

Our focus on building strong positions in markets with sustainable, long-term
growth drivers such as Health and Safety regulation, increasing demand for
healthcare and the need for life-critical resources (including energy and
water) is providing both resilience and opportunities to grow. Order intake
continues to be slightly ahead of revenue and Halma remains on track to make
further progress in the second half of the year."



Notes:



1 Adjusted to remove the amortisation of acquired intangible assets,
  acquisition transaction costs, movement on contingent consideration and
  profit on disposal of operations of £1.4m credit (2011/12: £6.2m charge).
  See  note 2 for details.

  
2 Organic growth rates are non-GAAP performance measures used by management to
  assess underlying performance. See note 9 for details.

  
 Return on Sales is defined as adjusted^1 profit before taxation from
  continuing operations expressed as a percentage of revenue from continuing
3 operations.

  
4 Adjusted to remove the amortisation of acquired intangible assets,
  acquisition transaction costs, movement in contingent consideration, profit
  on disposal of operations and the associated tax. See note 6 for details.







For further information, please contact:



Halma plc                        +44 (0)1494 721111
Andrew Williams, Chief Executive
Kevin Thompson, Finance Director


MHP Communications               +44 (0)20 3128 8100
Rachel Hirst/Andrew Jaques



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 three business sectors:



 ● Health and Analysis    Products used to improve personal and public
                           health. We develop technologies for analysis in
                           safety, life sciences and environmental markets.

                           
 ● Infrastructure Sensors Products which detect hazards to protect assets and
                           people in public, commercial and industrial
                           buildings.

                           
 ● Industrial Safety      Products which protect assets and people in
                           industry.





   The key characteristics of Halma's businesses are that they are based on
   advanced technology and offer strong growth potential. Many Group
   businesses areclear market leadersin their specialist field and, in a
   number of cases, are the dominant world supplier.

   
2. High resolution photos of Halma senior management, including Chief
   ExecutiveAndrew Williams, and images illustrating Halma business
   activities can be downloaded from its website: www.halma.com. Click on the
   'News' link, then 'Image Library'. Photo queries: David Waller +44 (0)1494
   721111, e-mail: dwaller@halmapr.com.

   
3. You can view or download copies of this announcement and the latest Half
   Year and Annual reports from the website at www.halma.com or request free
   printed copies by contacting halma@halma.com.

   
4. This announcement contains certain forward-looking statements which have
   been made by the Directors in good faith using information available up
   until the date they approved the announcement. Forward-looking statements
   should be regarded with caution as by their nature such statements involve
   risk and uncertainties relating to events and circumstances that may occur
   in the future. Actual results may differ from those expressed in such
   statements, depending on the outcome of these uncertain future events.







HALMA plc
Half year results for the 26 weeks to 29 September 2012

Financial Highlights



                                   Change    Unaudited   Unaudited

                                           26 weeks to 26 weeks to

                                          29 September   1 October

                                                  2012        2011
Continuing Operations
Revenue                              + 6%      £298.1m     £280.0m
Adjusted Profit before Taxation^1    + 6%       £60.8m      £57.5m
Statutory Profit before Taxation    + 21%       £62.2m      £51.3m
Adjusted Earnings per Share^2        + 5%       12.34p      11.75p
Statutory Earnings per Share        + 25%       13.14p      10.52p
Interim Dividend per Share^3         + 7%        4.06p       3.79p
Return on Sales^4                                20.4%       20.5%
Return on Total Invested Capital^5               16.4%       16.9%
Return on Capital Employed^5                     71.6%       68.8%



Pro-forma information:


1 Adjusted to remove the amortisation of acquired intangible assets,
  acquisition transaction costs, movement on contingent consideration and
  profit on disposal of operations of £1.4m credit (2011/12:£6.2m charge).
  See note 2 for details.
2 Adjusted to remove the amortisation of acquired intangible assets,
  acquisition transaction costs, movement on contingent consideration, profit
  on disposal of operations and the associated tax. See note 6 for details.
3 Interim dividend declared per share.
4 Return on Sales is defined as adjusted^1 profit before taxation from
  continuing operations expressed as a percentage of revenue from continuing
  operations.
5 Organic growth rates, Return on Total Invested Capital and Return on Capital
  Employed are non-GAAP performance measures used by management in measuring
  the returns achieved from the Group's asset base. See note 9 for details.

  







Chairman's Statement

Geoff Unwin, Chairman of Halma, said:



Halma: what we do and our strategy

Our business is to make products which protect lives and improve the quality
of life for people worldwide. We do this through continuous innovation in
market-leading products, which meet the increasing demands for improvements to
safety, health and the environment. Our businesses are autonomous and
entrepreneurial, building strong positions in market niches where the demand
is global.



Half year results

In the first half, revenue from continuing operations of £298.1m increased by
6% compared with the prior year (2011/12: £280.0m); this included a net 4%
contribution from acquisitions less disposals, and a negative currency impact
of 1%, giving organic revenue^1 growth at constant currency of 3%. Adjusted^1
profit before tax from continuing operations also increased by 6% to £60.8m
(2011/12: £57.5m), with organic growth of 3% at constant currency. Statutory
profit before tax increased by 21% to £62.2m (2011/12: £51.3m). Return on
Total Invested Capital^1 was 16.4% (2011/12: 16.9%).



We spent £65.6m (excluding £3.5m of cash but including £1.4m of debt acquired)
on three acquisitions (2011/12: £14.5m) and £15.8m on earnouts for
acquisitions made in previous years (2011/12: £5.4m). We also disposed of a
business for £21.8m including £2.1m of deferred consideration. This resulted
in a net debt of £74.1m at the end of the period compared with £18.7m at 31
March 2012. Our financial position remains strong.



Dividends

The Board declares a 7% increase in the interim dividend to 4.06 pence per
share which will be paid on 6 February 2013 to shareholders on the register at
4 January 2013. This increase reflects the Board's continuing confidence in
Halma's long-term growth prospects.

Progress

Despite weak economic growth and uncertainties in both Europe and the USA,
Halma has made further progress, thanks to the continuous efforts of our
employees to innovate. Return on Sales^1 was virtually unchanged at 20.4%
(2011/12: 20.5%). Our investment in China again produced good results with
sales growth of 32%. We continue to actively manage our portfolio of companies
in line with our strategic objectives as illustrated by the following summary
of acquisitions and disposals.



Acquisitions and disposals

During the first half year, Halma made three acquisitions: Accutome, a
manufacturer of ophthalmic instruments, for US$20m (including US$2.3m of bank
loans) plus an earnout of up to US$5m; Sensorex, a manufacturer of water
analysis sensors, for US$38m; and Suntech Medical Group, a supplier of
non-invasive blood pressure monitoring devices, for US$46m (plus US$5m for
cash retained in the business) and up to US$6m earnout. We also sold Tritech
(subsea asset monitoring equipment) for £21.8m, following the disposal at the
very end of 2011/12 of Volumatic (cash counting equipment).



Outlook

Despite continuing global economic uncertainties, our structure of
decentralised, market responsive management and the underpinning of demand
from fundamental growth drivers have once more proved resilient in challenging
markets. Halma remains on track to make further progress in the second half of
the year.



^1 See Financial Highlights







Chief Executive's Review

Andrew Williams, Chief Executive of Halma, said:



Halma made good progress during the period, achieving record revenue and
profit and strong returns. Our focus on safety, health and environmental
markets with long-term growth drivers is enabling us to continue to find
growth opportunities.



Trading trends

We achieved strong revenue growth of 17% in Asia Pacific and Australasia
including 32% revenue growth in China. Revenue growth of 6% in Africa, Near
and Middle East and the Americas (ex-USA) contributed to the proportion of
revenue from outside the UK/Europe/USA increasing to 25% of the Group total
(2011/12: 23%), making further progress towards our goal of 30% by 2015. In
absolute terms, half of our revenue growth during the period was generated
from those regions.



There was a resilient trading performance in developed markets. Revenue grew
by 19% in the USA which offset the performances in Europe and the UK, where
revenue was down by 3% and 6% respectively. Acquisitions, disposals and
currency rate changes had a significant impact on these figures. Taking these
factors into account, we estimate that the underlying organic^1 growth rates
at constant currency were as follows: USA up 2%, Europe up 0.3% and UK down
2%.



Order intake in the first half was slightly ahead of revenue - a trading
pattern which has continued into the second half.



Sector performances

Health and Analysis grew revenue by 12% to £135.2m (2011/12: £121.1m) and
profit by 10% to £30.9m (2011/12: £28.0m). Return on Sales remained strong at
22.9% (2011/12: 23.1%). Our Water and Health Optics sub-sectors performed
well, although we expect growth in Water to slow in the second half as UK
water utilities move into the latter phases of their
5-year budget cycle. As forecast, Fluid Technology achieved a steady recovery
as we progressed through 2012, although this was in contrast to Photonics
where strong growth in Asia was insufficient to fully mitigate the impact of
lower demand from US government research customers.





Infrastructure Sensor revenue was 1% lower at £100.5m (2011/12: £101.1m)
whilst profit was down by 2% at £18.9m (2011/12: £19.4m). Return on Sales was
slightly lower at 18.8% (2011/12: 19.2%). As forecast, there were one-off
costs of £1m during the period, predominantly to complete the reorganisation
of our European and Asian Elevator Safety businesses. This was completed on
schedule in September 2012 so we expect to see the benefit of these changes
emerge more strongly during the second half. Fire Detection, Elevator Safety
and Security Sensors all achieved modest revenue increases whilst our
Automatic Door Sensors business saw lower revenue due to weakness in European
markets.



Industrial Safety had another strong performance with revenue increasing by 8%
to £62.5m (2011/12: £58.0m) and profit up by 13% to £15.3m (2011/12: £13.6m).
Return on Sales of 24.5% (2011/12: 23.4%) remained the highest of our three
sectors. Gas Detection, Safety Interlocks and Bursting Disks all performed
strongly and it was pleasing to see higher growth from regions outside the
UK/Europe/USA. The disposal of our Asset Monitoring business in August 2012
(see details below) will further increase the proportion of this sector's
revenues from developing markets. In the longer term, this will be boosted
further by the increased internal collaboration to serve Industrial customers
in South America.



Acquisitions and disposals

During the period we spent £66m (plus up to £7m in earn-outs based on future
growth) acquiring three companies for our Health and Analysis sector, details
of which were given in Halma's Annual Report 2012 and this Half Year Report.
All three businesses are trading well, with Accutome and SunTech already
progressing new opportunities through collaboration with our other Health
Optics companies and Sensorex continuing to grow sales of its water quality
sensors.



In August 2012, we sold our Asset Monitoring business, Tritech, to a UK
subsidiary of Moog Inc. for a total consideration of £21.8m. We acquired
Tritech in 2006 as our first entry into the subsea asset market and, whilst it
has performed well, we believe we can create greater shareholder value by
reallocating resources to other sub-sectors. Moog's presence in marine energy
markets will enable Tritech to make strong progress under their ownership. A
gain of £8.2m has been recognised in the Group Income Statement after
accounting for the disposal of these assets, including the associated
goodwill.



Although the first half was a busy period for M&A, our search for acquisition
opportunities continues. We are aiming to increase the number of prospects
within our two safety-related sectors (Infrastructure Sensors and Industrial
Safety) although currently the majority of opportunities in our pipeline are
still within our Medical and Environmental related sector (Health and
Analysis).



Cash generation and financial resources

There was good cash generation during the first half year, when dividend
payments tend to be greater than those made in the second half. We ended the
period with net debt of £74.1m (March 2012: £18.7m) after funding acquisitions
(net of disposals) of £62.5m (2011/12: £19.9m) and capital expenditure of
£8.1m (2011/12: £8.4m). We have a £260m 5-year revolving credit facility in
place until October 2016 so we are in a strong financial position to support
our future investment.



Investment for growth

Halma increased investment in each of the three strategic initiatives which
underpin the sustainability of our growth and high returns:



• Investment in Innovation increased across all three sectors. R&D
expenditure grew by 11% to £14.9m (2011/12: £13.4m).


• In October 2012, a group of graduates started the first Halma Graduate
Development Programme (HGDP) underpinning our commitment to People
Development. This programme will provide them with a series of six-month
placements in Halma companies across the world. The first group of nine
technical graduates includes a mix from leading universities in the UK and
USA. Recruitment for the 2013 HGDP is already underway.
                                                                             


• Halma companies are working together to accelerate the pace of
International Expansion. In China, our Fluid Technology companies have
created a combined manufacturing company, whilst in Brazil our Industrial
Safety businesses are together establishing a trading company to serve key
Oil, Gas and Process industry customers in that region.



Risks and uncertainties

There are no significant changes to the risks and uncertainties in the Annual
Report and on our website, www.halma.com. These are summarised in note 13 of
this Half Year Report.



Summary

To meet the challenge of sustaining growth and high returns, the need to
create competitive advantage is more critical than ever. Halma's business
model is to operate with a diverse group of global businesses. Each has a
management team empowered to adapt and allocate resources as the needs of
their niche markets change leaving them well positioned to succeed.



Our focus on building strong positions in markets with sustainable, long-term
growth drivers such as Health and Safety regulation, increasing demand for
healthcare and the need for life-critical resources (including energy and
water) is providing both resilience and opportunities to grow. Order intake
continues to be slightly ahead of revenue and Halma remains on track to make
further progress in the second half of the year.



^1 See Financial Highlights









Half year results for the 26 weeks to 29 September 2012



Condensed Financial Statements





Consolidated Income Statement



                                                                                          Audited
                                                                                         52 weeks
                                                                                               to
                   Unaudited 26 weeks to 29 September    Unaudited 26 weeks to 1 October 31 March
                                                 2012                               2011     2012
                         Before Adjustments*                Before Adjustments*

                   adjustments*     (note 2)          adjustments*    (note 2)
                                                Total                              Total    Total
             Notes         £000         £000     £000         £000        £000     £000     £000
Continuing
operations
Revenue          2      298,078            -  298,078      279,997            -  279,997  579,883
Operating
profit                   62,700      (6,771)   55,929       58,158      (6,218)   51,940  109,910
Share of
results of
associates                (120)            -    (120)         (94)            -     (94)     (37)
Profit on
disposal of
continuing
operations                    -        8,188    8,188            -            -        -    3,543
Finance
income           3        4,407            -    4,407        4,919            -    4,919   10,070
Finance
expense          4      (6,209)            -  (6,209)      (5,482)            -  (5,482) (11,512)
Profit
before
taxation                 60,778        1,417   62,195       57,501      (6,218)   51,283  111,974
Taxation         5     (14,222)        1,632 (12,590)     (13,258)        1,612 (11,646) (25,260)
Profit for
the year
attributable
to equity
shareholders             46,556        3,049   49,605       44,243      (4,606)   39,637   86,714
Earnings per
share            6
From
continuing
operations
Basic                    12.34p                13.14p       11.75p                10.52p   23.01p
Diluted                                        13.13p                             10.50p   22.97p
Dividends in
respect
of the
period           7
Dividends
(£000)                                         15,342                             14,298   36,723
Per share                                       4.06p                              3.79p    9.74p



* Adjustments include the amortisation of acquired intangible assets,
acquisition transaction costs, movement on contingent consideration, profit on
disposal of continuing operations and the associated taxation thereon.







Consolidated Statement of Comprehensive Income and Expenditure



                                                         Unaudited     Audited
                                             Unaudited 26 weeks to 52 weeks to
                                        26 weeks to 29   1 October    31 March
                                        September 2012        2011        2012
                                                  £000        £000        £000
Profit for the period                           49,605      39,637      86,714
Exchange differences on translation of
foreign operations                            (10,862)       3,384     (5,707)
Actuarial losses on defined benefit
pension plans                                 (10,700)    (11,440)     (3,024)
Effective portion of changes in fair
value of cash flow hedges                        (162)         244         545
Tax relating to components of other
comprehensive income                             2,162       2,529        (11)
Other comprehensive expense for the
period                                        (19,562)     (5,283)     (8,197)
Total comprehensive income for the
period attributable to equity
shareholders                                    30,043      34,354      78,517



The exchange differences of (£10,862,000) (26 weeks to 1 October 2011:
£3,384,000; 52weeksto 31 March 2012: (£5,707,000)) comprises £1,488,000 (26
weeks to 1 October 2011: (£1,120,000); 52weeksto 31 March 2012: (£776,000))
which relate to net investment hedges.







Consolidated Balance Sheet



                                                   Unaudited  Audited
                                         Unaudited 1 October 31 March
                                 29 September 2012     2011     2012
                                              £000      £000     £000
Non-current assets
Goodwill                                   290,106   273,049  267,471
Other intangible assets                     96,874    80,665   74,483
Property, plant and equipment               72,860    72,508   72,118
Interests in associates                      5,023     1,914    1,968
Deferred tax asset                           9,341    11,148   11,039
                                           474,204   439,284  427,079
Current assets
Inventories                                 63,269    63,310   57,368
Trade and other receivables                116,286   109,029  114,674
Tax receivable                                 138       448      288
Cash and cash equivalents                   43,000    41,674   45,305
Derivative financial instruments               355       108      469
                                           223,048   214,569  218,104
Total assets                               697,252   653,853  645,183
Current liabilities
Borrowings                                       -     2,051        -
Loan notes                                   2,515         -        -
Trade and other payables                    84,379    86,304   93,499
Provisions                                   1,762     2,691    2,618
Tax liabilities                             12,238    12,627   11,870
Derivative financial instruments               277       380      126
                                           101,171   104,053  108,113
Net current assets                         121,877   110,516  109,991
Non-current liabilities
Borrowings                                 114,594    95,649   64,014
Retirement benefit obligations              40,611    44,590   32,997
Trade and other payables                     6,253    14,971   13,388
Provisions                                   3,193     2,108    2,301
Deferred tax liabilities                    27,167    24,927   26,258
                                           191,818   182,245  138,958
Total liabilities                          292,989   286,298  247,071
Net assets                                 404,263   367,555  398,112
Equity
Share capital                               37,869    37,841   37,856
Share premium account                       22,350    21,993   22,177
Treasury shares                            (2,958)   (3,665)  (4,569)
Capital redemption reserve                     185       185      185
Hedging and translation reserve             18,149    38,078   29,212
Other reserves                             (2,905)      (96)    1,346
Retained earnings                          331,573   273,219  311,905
Shareholders' funds                        404,263   367,555  398,112







Consolidated Statement of Changes in Equity



For the 26 weeks ended 29 September 2012
                        Share             Capital Hedging and
                Share premium Treasury redemption translation    Other Retained
              capital account   shares    reserve     reserve reserves earnings    Total

                 £000    £000     £000       £000        £000     £000     £000     £000
At 31 March
2012
(audited)      37,856  22,177  (4,569)        185      29,212    1,346  311,905  398,112
Profit for
the period          -       -        -          -           -        -   49,605   49,605
Other
comprehensive
income and
expense:
Exchange
differences
on
translation
of foreign
operations          -       -        -          -    (10,862)        -        - (10,862)
Actuarial
losses on
defined
benefit
pension plans       -       -        -          -           -        - (10,700) (10,700)
Effective
portion of
changes in
fair value of
cash flow
hedges              -       -        -          -       (162)        -        -    (162)
Tax relating
to components
of other
comprehensive
income              -       -        -          -        (39)        -    2,201    2,162
Total other
comprehensive
income
and expense         -       -        -          -    (11,063)        -  (8,499) (19,562)
Share options
exercised          13     173        -          -           -        -        -      186
Dividends
paid                -       -        -          -           -        - (22,425) (22,425)
Share-based
payments            -       -        -          -           -  (3,991)        -  (3,991)
Deferred tax
on
share-based
payment
transactions        -       -        -          -           -    (260)        -    (260)
Excess tax
deductions
related to
share-based
payments on
exercised
options             -       -        -          -           -        -      987      987
Net movement
in treasury
shares              -       -    1,611          -           -        -        -    1,611
At 29
September
2012
(unaudited)    37,869  22,350  (2,958)        185      18,149  (2,905)  331,573  404,263





For the 26 weeks ended 1 October 2011
                        Share             Capital Hedging and
                Share premium Treasury redemption translation    Other Retained
             capital account   shares    reserve     reserve reserves earnings    Total

                £000    £000     £000       £000        £000     £000     £000     £000
At 2 April
2011
(audited)      37,824  21,744  (5,016)        185      34,511    3,634  262,503  355,385
Profit for
the period          -       -        -          -           -        -   39,637   39,637
Other
comprehensive
income and
expense:
Exchange
differences
on
translation
of foreign
operations          -       -        -          -       3,384        -        -    3,384
Actuarial
losses on
defined
benefit
pension plans       -       -        -          -           -        - (11,440) (11,440)
Effective
portion of
changes in
fair value of
cash flow
hedges              -       -        -          -         244        -        -      244
Tax relating
to components
of other
comprehensive
income              -       -        -          -        (61)        -    2,590    2,529
Total other
comprehensive
income and
expense             -       -        -          -       3,567        -  (8,850)  (5,283)
Share options
exercised          17     249        -          -           -        -        -      266
Dividends
paid                -       -        -          -           -        - (20,935) (20,935)
Share-based
payments            -       -        -          -           -  (3,261)        -  (3,261)
Deferred tax
on
share-based
payment
transactions        -       -        -          -           -    (469)        -    (469)
Excess tax
deductions
related to
share-based
payments on
exercised
options             -       -        -          -           -        -      864      864
Net movement
in treasury
shares              -       -    1,351          -           -        -        -    1,351
At 1 October
2011
(unaudited)    37,841  21,993  (3,665)        185      38,078     (96)  273,219  367,555





For the 52 weeks ended 31 March 2012
                        Share             Capital Hedging and
                Share premium Treasury redemption translation    Other Retained
              capital account   shares    reserve     reserve reserves earnings    Total

                 £000    £000     £000       £000        £000     £000     £000     £000
At 2 April
2011
(audited)      37,824  21,744  (5,016)        185      34,511    3,634  262,503  355,385
Profit for
the period          -       -        -          -           -        -   86,714   86,714
Other
comprehensive
income and
expense:
Exchange
differences
on
translation
of foreign
operations          -       -        -          -     (5,707)        -        -  (5,707)
Actuarial
losses on
defined
benefit
pension plans       -       -        -          -           -        -  (3,024)  (3,024)
Effective
portion of
changes in
fair value of
cash flow
hedges              -       -        -          -         545        -        -      545
Tax relating
to components
of other
comprehensive
income              -       -        -          -       (137)        -      126     (11)
Total other
comprehensive
income and
expense             -       -        -          -     (5,299)        -  (2,898)  (8,197)
Share options
exercised          32     433        -          -           -        -        -      465
Dividends
paid                -       -        -          -           -        - (35,232) (35,232)
Share-based
payments            -       -        -          -           -  (2,082)        -  (2,082)
Deferred tax
on
share-based
payment
transactions        -       -        -          -           -    (206)        -    (206)
Excess tax
deductions
related to
share-based
payments on
exercised
options             -       -        -          -           -        -      818      818
Net movement
in treasury
shares              -       -      447          -           -        -        -      447
At 31 March
2012
(audited)      37,856  22,177  (4,569)        185      29,212    1,346  311,905  398,112







Consolidated Cash Flow Statement



                                             Unaudited   Unaudited     Audited
                                           26 weeks to 26 weeks to 52 weeks to
                                          29 September   1 October    31 March
                                                  2012        2011        2012
                                    Notes         £000        £000        £000
Net cash inflow from operating
activities                              8       49,050      36,571      97,687
Cash flows from investing
activities
Purchase of property, plant and
equipment                                      (7,595)     (7,658)    (15,196)
Purchase of computer software                    (469)       (753)     (1,293)
Purchase of other intangibles                      (6)           -        (46)
Proceeds from sale of property,
plant and equipment                                347         370       1,244
Development costs capitalised                  (2,369)     (2,005)     (4,718)
Interest received                                   52         132         212
Acquisition of businesses, net of
cash acquired                          10     (80,004)    (18,729)    (18,667)
Acquisition of investments in
associates                                     (3,187)           -           -
Disposal of business, net of cash
disposed                               11       18,955           -       3,554
Net cash used in investing
activities                                    (74,276)    (28,643)    (34,910)
Financing activities
Dividends paid                                (22,425)    (20,935)    (35,232)
Proceeds from issue of share
capital                                            186         266         465
Purchase of treasury shares                    (3,700)     (3,045)     (3,985)
Interest paid                                  (1,150)       (580)     (1,490)
Loan arrangement fee                                 -           -     (1,903)
Proceeds from borrowings                        50,630      19,975      76,456
Repayment of borrowings                              -     (4,305)    (94,050)
Net cash from/(used in) financing
activities                                      23,541     (8,624)    (59,739)
(Decrease)/increase in cash and
cash equivalents                        8      (1,685)       (696)       3,038
Cash and cash equivalents brought
forward                                         45,305      42,610      42,610
Exchange adjustments                             (620)       (240)       (343)
Cash and cash equivalents carried
forward                                         43,000      41,674      45,305









Notes to the Condensed Financial Statements
1 Basis of preparation

General information

The Half Year Report, which includes the Interim Management Report and
Condensed Financial Statements for the 26weeksto29September 2012, has not
been audited or reviewed by the Group's auditors and was approved by the
Directors on20 November 2012.



The Report has been prepared in accordance with International Accounting
Standard 34, applying the accounting policies andpresentation that were
applied in the preparation of the Group's statutory accounts for the 52 weeks
to 31 March 2012.



The figures shown for the 52 weeks to 31 March 2012 are based on the Group's
statutory accounts for that period and do not constitute the Group's statutory
accounts for that period as defined in Section 434 of the Companies Act 2006.
These statutory accounts, which were prepared under International Financial
Reporting Standards, have been filed with the Registrar of Companies. The
audit report on those accounts was not qualified, did not include a reference
to any matters for which the auditors drew attention by way of emphasis
without qualifying the report, and did not contain statements under Sections
498 (2) or (3) of the Companies Act 2006.



The Report has been prepared solely to provide additional information to
shareholders as a body to assess the Board's strategies and the potential for
those strategies to succeed. It should not be relied on by any other party or
for any other purpose.



The Report contains certain forward-looking statements which have been made by
the Directors in good faith using information available up until the date they
approved the Report. Forward-looking statements should be regarded with
caution as by their nature such statements involve risk and uncertainties
relating to events and circumstances that may occur in the future.
Actualresults may differ from those expressed in such statements, depending
on the outcome of these uncertain future events.



The Directors believe the Group is well placed to manage its business risks
successfully. The Group's forecasts and projections, taking account of
reasonably possible changes in trading performance, show that the Group should
be able to operate within the level of its current committed facilities, which
includes a £260m five-year revolving credit facility due to expire in October
2016. The Directors have a reasonable expectation that the Company and Group
have adequate resources to continue in operational existence for the
foreseeable future. Thus they continue to adopt the going concern basis in
preparing the half-year Condensed Financial Statements.







2 Segmental Analysis



Sector analysis

The Group has three main reportable segments (Health and Analysis,
Infrastructure Sensors and Industrial Safety), which are defined by markets
rather than product type. Each segment includes businesses with similar
operating and market characteristics. These segments are consistent with the
internal reporting as reviewed by the Chief Executive Officer.



These reportable segments remain unchanged from the 31 March 2012 consolidated
accounts.





Segment revenue and results



                                         Revenue (all continuing operations)
                                                       Unaudited     Audited
                                                     26 weeks to 52 weeks to
                                           Unaudited   1 October    31 March
                       26 weeks to 29 September 2012        2011        2012
                                                £000        £000        £000
Health and Analysis                          135,157     121,070     253,647
Infrastructure Sensors                       100,509     101,102     204,280
Industrial Safety                             62,535      58,007     122,240
Inter-segmental sales                          (123)       (182)       (284)
Revenue for the period                       298,078     279,997     579,883



Inter-segmental sales are charged at prevailing market prices and have not
been disclosed separately by segment as they are not considered material. The
Group does not analyse revenue by product group and has no material revenue
derived from the rendering of services.



                                            Profit (all continuing operations)
                                            Unaudited    Unaudited     Audited
                                          26 weeks to 26 weeks to 52 weeks to
                                         29 September    1 October    31 March
                                                 2012         2011        2012
                                                 £000         £000        £000
Segment profit before allocation of
amortisation of acquired intangible
assets, acquisition costs and profit on
disposal of continuing operations
Health and Analysis                            30,886       27,953      57,848
Infrastructure Sensors                         18,907       19,364      39,099
Industrial Safety                              15,335       13,596      29,226
                                               65,128       60,913     126,173
Segment profit after allocation of
amortisation of acquired intangible
assets,
acquisition costs and profit on disposal
of continuing operations
Health and Analysis                            24,416       22,024      49,779
Infrastructure Sensors                         18,907       19,364      39,276
Industrial Safety                              23,222       13,307      28,627
Segment profit                                 66,545       54,695     117,682
Central administration costs                  (2,548)      (2,849)     (4,266)
Net finance expense                           (1,802)        (563)     (1,442)
Group profit before taxation                   62,195       51,283     111,974
Taxation                                     (12,590)     (11,646)    (25,260)
Profit for the period                          49,605       39,637      86,714





The accounting policies of the reportable segments are the same as the Group's
accounting policies. For acquisitions after 3April 2010, acquisition
transaction costs and adjustments to contingent purchase consideration are
recognised in the Consolidated Income Statement. Segment profit before these
acquisition costs, the amortisation of acquired intangible assets and the
profit on disposal of continuing operations is disclosed separately above as
this is the measure reported to the Chief Executive Officer for the purpose of
allocation of resources and assessment of segment performance.



The amortisation of acquired intangible assets, acquisition transaction costs,
movements on contingent consideration (including any arising from foreign
exchange revaluation) and profit on disposal of continuing operations are
analysed as follows:



                                             For the 26 weeks ended 29 September 2012
                                    Acquisition costs
                                                             Total   Disposal
               Amortisation               Adjustments amortisation         of
                of acquired                        to   charge and continuing
                 intangible Transaction    contingent  acquisition operations
                     assets       costs consideration        costs  (note 11)   Total
                       £000        £000          £000         £000       £000   £000l
Health and
Analysis            (6,128)     (1,468)         1,126      (6,470)          - (6,470)
Infrastructure
Sensors                  -           -             -            -          -       -
Industrial
Safety                (301)           -             -        (301)      8,188   7,887
Total Group         (6,429)     (1,468)         1,126      (6,771)      8,188   1,417





The transaction costs mainly arose on the acquisitions in note 10 of Accutome,
Inc. (£225,000), Sensorex Inc. (£295,000) and SunTech Medical Group Limited
(£939,000).





                                                For the 26 weeks ended 1 October 2011
                                    Acquisition costs
                                                             Total   Disposal
               Amortisation                           amortisation         of
                of acquired               Adjustments   charge and continuing
                 intangible Transaction to contingent  acquisition operations
                     assets       costs consideration        costs  (note 11)   Total
                       £000        £000          £000         £000       £000   £000l
Health and                                                 (5,929)          -
Analysis            (4,901)        (66)         (962)                         (5,929)
Infrastructure                                                   -          -
Sensors                   -           -             -                               -
Industrial                                                   (289)          -
Safety                (244)        (45)             -                           (289)
Total Group         (5,145)       (111)         (962)      (6,218)          - (6,218)





                                                 For the 52 weeks ended 31 March 2012
                                    Acquisition costs
                                                             Total   Disposal
               Amortisation                           amortisation         of
                of acquired               Adjustments   charge and continuing
                 intangible Transaction to contingent  acquisition operations
                     assets       costs consideration        costs  (note 11)   Total
                       £000        £000          £000         £000       £000   £000l
Health and                                                (11,612)
Analysis            (9,804)       (667)       (1,141)                   3,543 (8,069)
Infrastructure
Sensors                  -           -           177          177          -     177
Industrial                                                   (599)
Safety                (548)        (51)             -                       -   (599)
Total Group        (10,352)       (718)         (964)     (12,034)      3,543 (8,491)



The total assets of the Health and Analysis sector were £385,299,000 at 29
September 2012 (£332,051,000 at 1 October 2011; £317,280,000 at 31 March
2012), the increase in the period being primarily due to additional goodwill
and acquired intangible assets arising from the three acquisitions (see note
10). The other two sectors' total assets have not been disclosed as there have
been no material changes to those disclosed in the 2012 Annual Report.





Geographical information



The Group's revenue from external customers (by location of customer) is as
follows:



                                                       Revenue by destination
                                                        Unaudited     Audited
                                            Unaudited 26 weeks to 52 weeks to
                             26 weeks to 29 September   1 October    31 March
                                                 2012       2011        2012
                                                 £000        £000        £000
United States of America                       93,491      78,598     161,951
Mainland Europe                                73,306      75,264     154,428
United Kingdom                                 57,213      60,638     125,613
Asia Pacific and Australasia                   48,826      41,611      87,277
Africa, Near and Middle East                   14,240      13,024      27,750
Other countries                                11,002      10,862      22,864
Group revenue                                 298,078     279,997     579,883





3 Finance income                                                          
                                                         Unaudited     Audited
                                             Unaudited 26 weeks to 52 weeks to
                                        26 weeks to 29   1 October    31 March
                                        September 2012        2011        2012
                                                  £000        £000        £000
Interest receivable                                 52         132         212
Expected return on pension assets                4,355       4,772       9,529
                                                 4,407       4,904       9,741
Fair value movement on derivative
financial instruments                                -          15         329
                                                 4,407       4,919      10,070





4 Finance expense                                                        
                                             Unaudited   Unaudited     Audited
                                           26 weeks to 26 weeks to 52 weeks to
                                          29 September   1 October    31 March
                                                  2012        2011       2012
                                                  £000        £000        £000
Interest payable on bank loans and
overdrafts                                       1,107         543       1,383
Amortisation of finance costs                      317           -         282
Interest charge on pension scheme
liabilities                                      4,615       4,845       9,684
Other interest payable                              43          37         107
                                                 6,082       5,425      11,456
Fair value movement on derivative
financial instruments                              108           -           -
Unwinding of discount on provisions                 19          57          56
                                                 6,209       5,482      11,512





5 Taxation
The total Group tax charge for the 26 weeks to 29 September 2012 of
£12,590,000 (26 weeks to 1 October 2011: £11,646,000; 52weeksto 31 March
2012: £25,260,000) comprises a current tax charge of £13,130,000 (26 weeks to
1October 2011: £11,457,000; 52 weeks to 31 March 2012: £25,409,000) and a
deferred tax credit of £540,000 (26 weeks to 1October 2011: charge of
£189,000; 52weeks to 31 March 2012: credit of £149,000). The tax charge is
based on the estimated effective tax rate for the year.



The tax charge includes £9,501,000 (26 weeks to 1 October 2011: £7,903,000; 52
weeks to 31 March 2012: £15,635,000) in respect ofoverseas tax.



Deferred tax assets have been recognised at the rate at which they are
expected to reverse. In the UK, this is at the standard rate of corporation
tax, which from 1 April 2013 will reduce from 24% to 23%. This reduction in
rate has resulted in a credit to the deferred tax asset of £282,000, of which
£406,000 was charged to Other Comprehensive Income and £124,000 credited to
the Income Statement.





6 Earnings per ordinary share
Basic earnings per ordinary share are calculated using the weighted average of
377,388,541 (1 October 2011: 376,659,210; 31March 2012: 376,926,013) shares
in issue during the period (net of shares purchased by the Company and held as
treasury shares). Diluted earnings per ordinary share are calculated using
377,927,267 (1 October 2011: 377,319,197; 31March 2012: 377,473,142) shares
which includes dilutive potential ordinary shares of 538,726 (1 October 2011:
659,987; 31 March 2012: 547,129). Dilutive potential ordinary shares are
calculated from those exercisable share options where the exercise price
isless than the average price of the Company's ordinary shares during the
period.



Adjusted earnings are calculated as earnings from continuing operations
excluding the amortisation of acquired intangible assets, acquisition
transaction costs, movement on contingent consideration and profit on disposal
of continuing operations after tax. The Directors consider that adjusted
earnings represent a more consistent measure of underlying performance.
Areconciliation of earnings and the effect on basic earnings per share
figures is presented below:





                                             Unaudited   Unaudited     Audited
                                        26 weeks to 29 26 weeks to 52 weeks to
                                             September   1 October    31 March
                                                  2012        2011       2012
                                                  £000        £000        £000
Earnings from continuing operations             49,605      39,637      86,714
Add back amortisation of acquired
intangible assets (after tax)                    4,530       3,783       7,561
Acquisition transaction costs (after
tax)                                             1,468         111         691
Adjustments to contingent consideration
(after tax)                                      (859)         712         786
Profit on disposal of continuing
operations (after tax)                         (8,188)           -     (3,543)
Adjusted earnings                               46,556      44,243      92,209



                                                            Per ordinary share
                                             Unaudited   Unaudited     Audited
                                        26 weeks to 29 26 weeks to 52 weeks to
                                             September   1 October    31 March
                                                  2012        2011       2012
                                                 pence       pence       pence
Earnings from continuing operations              13.14       10.52       23.01
Add back amortisation of acquired
intangible assets (after tax)                     1.21        1.01        2.00
Acquisition transaction costs (after
tax)                                              0.39        0.03        0.18
Adjustments to contingent consideration
(after tax)                                     (0.23)        0.19        0.21
Profit on disposal of continuing
operations (after tax)                          (2.17)           -      (0.94)
Adjusted earnings                                12.34       11.75       24.46





7 Dividends
                                                            Per ordinary share
                                             Unaudited   Unaudited     Audited
                                           26 weeks to 26 weeks to 52 weeks to
                                          29 September   1 October    31 March
                                                  2012        2011       2012
                                                  £000        £000        £000
Amounts recognised as distributions to
shareholders in the period
Final dividend for the year to 31 March
2012 (2 April 2011)                               5.95        5.56        5.56
Interim dividend for the year to 31 March
2012                                                 -           -        3.79
                                                  5.95        5.56        9.35
Dividends in respect of the period
Interim dividend for the year to 30 March
2013 (31 March 2012)                              4.06        3.79        3.79
Final dividend for the year to 31 March
2012                                                 -           -        5.95
                                                  4.06        3.79        9.74



                                             Unaudited   Unaudited     Audited
                                           26 weeks to 26 weeks to 52 weeks to
                                          29 September   1 October    31 March
                                                  2012        2011       2012
                                                  £000        £000        £000
Amounts recognised as distributions to
shareholders in the period
Final dividend for the year to 31 March
2012 (2 April 2011)                             22,425      20,935      20,934
Interim dividend for the year to 31 March
2012                                                 -           -      14,298
                                                22,425      20,935      35,232
Dividends in respect of the period
Interim dividend for the year to 30 March
2013 (31 March 2012)                            15,342      14,298      14,298
Final dividend for the year to 31 March
2012                                                 -           -      22,425
                                                15,342      14,298      36,723





8 Notes to the Consolidated Cash Flow
Statement
                                             Unaudited   Unaudited     Audited
                                        26 weeks to 29 26 weeks to 52 weeks to
                                             September   1 October    31 March
                                                  2012        2011        2012
                                                  £000        £000        £000
Reconciliation of profit from
operations to net cash inflow from
operating activities
Profit on continuing operations before
finance income and expense, share of
results of associates and profit on
disposal of continuing operations               55,929      51,940     109,910
Depreciation of property, plant and
equipment                                        6,262       6,077      12,178
Amortisation of computer software                  677         588       1,319
Amortisation of capitalised development
costs and other intangibles                      1,824       1,879       3,820
Amortisation of acquired intangible
assets                                           6,429       5,145      10,352
Share-based payment expense in excess
of amounts paid                                  1,378       1,250       2,432
Additional payments to pension scheme          (3,346)     (3,160)     (6,419)
Loss/(profit) on sale of property,
plant and equipment and computer
software                                            13        (64)       (495)
Operating cash flows before movement in
working capital                                 69,166      63,655     133,097
Increase in inventories                        (3,021)     (7,504)     (3,777)
Decrease/(increase) in receivables               1,831       3,140     (1,190)
Decrease in payables                           (7,543)     (9,553)     (2,671)
Cash generated from operations                  60,433      49,738     125,459
Taxation paid                                 (11,383)    (13,167)    (27,772)
Net cash inflow from operating
activities                                      49,050      36,571      97,687
Reconciliation of net cash flow to
movement in net debt
(Decrease)/increase in cash and cash
equivalents                                    (1,685)       (696)       3,038
Cash (inflow)/outflow from
(drawdowns)/repayment of borrowings           (50,630)    (15,670)      17,594
Bank loan acquired                             (1,438)     (1,144)     (1,144)
Loan notes issued                              (2,515)           -           -
Exchange adjustments                               868     (1,438)     (1,119)
                                              (55,400)    (18,948)      18,369
Net debt brought forward                      (18,709)    (37,078)    (37,078)
Net debt carried forward                      (74,109)    (56,026)    (18,709)
Analysis of net debt
Cash and cash equivalents                       43,000      41,674      45,305
Loan notes falling due within one year*        (2,515)           -           -
Bank loans falling due within one year               -     (2,051)           -
Bank loans falling due after more than                                (64,014)
one year                                     (114,594)   (95,649)
                                              (74,109)   (56,026)    (18,709)





* The loan notes were issued on 6 June 2012 and are convertible at par into
cash at any time between six and twelve months from date of issue.







9 Non-GAAP measures

Return on Capital Employed                                                 
                                                         Unaudited     Audited
                                             Unaudited 26 weeks to 52 weeks to
                                           26 weeks to   1 October    31 March
                                     29 September 2012        2011       2012
                                                  £000        £000        £000
Operating profit before amortisation
of acquired intangible assets,
acquisition transaction costs and
movement on contingent
consideration, but after share
of results of associates                        62,580      58,064     121,907
Computer software costs within
intangible assets                                2,421       2,948       2,678
Capitalised development costs within
intangible assets                               10,602       9,823      10,508
Other intangibles within intangible
assets                                             179         216         215
Property, plant and equipment                   72,860      72,508      72,118
Inventories                                     63,269      63,310      57,368
Trade and other receivables                    116,286     109,029     114,674
Trade and other payables                      (84,379)    (86,304)    (93,499)
Provisions                                     (1,762)     (2,691)     (2,618)
Net tax liabilities                           (12,100)    (12,179)    (11,582)
Non-current trade and other payables           (6,253)    (14,971)    (13,388)
Non-current provisions                         (3,193)     (2,108)     (2,301)
Add back accrued contingent purchase
consideration                                   16,870      29,142      29,110
Capital employed                               174,800     168,723     163,283
Return on capital employed
(annualised)                                     71.6%       68.8%       74.7%



Return on Total Invested Capital                                           
                                             Unaudited   Unaudited     Audited
                                        26 weeks to 29 26 weeks to 52 weeks to
                                             September   1 October    31 March
                                                  2012        2011       2012
                                                  £000        £000        £000
Post-tax profit before amortisation of
acquired intangible assets, acquisition
transaction costs, movement on
contingent consideration and profit on
disposal of continuing operations               46,556      44,243      92,209
Total shareholders' funds                      404,263     367,555     398,112
Add back retirement benefit obligations         40,611      44,590      32,997
Less associated deferred tax assets            (9,341)    (11,148)     (7,920)
Cumulative amortisation of acquired
intangible assets                               41,850      31,663      36,306
Goodwill on disposals                            5,441       5,441       5,441
Goodwill amortised prior to 3 April
2004                                            13,177      13,177      13,177
Goodwill taken to reserves prior to 3
April 1998                                      70,931      70,931      70,931
Total invested capital                         566,932     522,209     549,044
Return on total invested capital
(annualised)                                     16.4%       16.9%       16.8%



Organic growth

Organic growth measures the change in revenue and profit from continuing Group
operations. The effect of acquisitions and disposals made during the current
and prior financial periods has been equalised by adjusting the results for a
pro-rated contribution based on their revenue and profit before taxation at
the date of acquisition or disposal.







10 Acquisitions



The Group made three acquisitions during the period. Below are summaries of
the assets and liabilities acquired and the purchase consideration of:



a) the total of all three acquisitions, including an adjustment to a prior
period acquisition;

b) the three acquisitions, namely Accutome, Inc., Sensorex Inc. and
SunTech Medical Group Limited.





(A) Total of all three acquisitions
and adjustments to prior period
acquisition
                                          Book Provisional fair value
                                         value            adjustments    Total
                                          £000                   £000     £000
Non-current assets
Intangible assets                           12                 31,436   31,448
Property, plant and equipment            1,641                  (305)    1,336
Deferred tax                               212                    698      910
Current assets
Inventories                              7,379                (1,211)    6,168
Trade and other receivables              6,132                    494    6,626
Cash and cash equivalents                3,641                    (5)    3,636
Total assets                            19,017                 31,107   50,124
Current liabilities
Trade and other payables               (3,219)                  (595)  (3,814)
Overdrafts                               (116)                      -    (116)
Bank loans                             (1,307)                      -  (1,307)
Provisions                               (100)                  (316)    (416)
Corporation tax                           (44)                    539      495
Non-current liabilities
Bank loans                               (131)                      -    (131)
Provisions                                (21)                   (25)     (46)
Deferred tax                                 -                (7,123)  (7,123)
Total liabilities                      (4,938)                (7,520) (12,458)
Net assets of businesses acquired       14,079                 23,587   37,666
Cash consideration paid                                                 67,760
Cash consideration to be paid
(estimated)                                                                804
Contingent purchase consideration
(current period acquisitions)                                            6,977
Total consideration                                                     75,541
Goodwill arising on current period
acquisitions                                                            37,875
Goodwill arising on prior period
acquisitions                                                                 -
Goodwill arising on acquisitions                                        37,875



Due to their contractual dates, the fair value of receivables acquired (shown
above) approximates to the gross contractual amounts receivable. The amount of
gross contractual receivables not expected to be recovered is immaterial.



There are no material contingent liabilities recognised in accordance with
paragraph 23 of IFRS 3 (Revised).



£9,586,000 of the goodwill arising on acquisitions in the period is expected
to be deductible for tax purposes.



Together, all three acquisitions contributed £16,647,000 of revenue and
£2,502,000 of profit after tax for the 26 weeks ended 29September 2012. If
these acquisitions had been held since the start of the financial period, it
is estimated the Group's reported revenue and profit after tax would have been
£2,621,000 and £418,000 higher, respectively.



Adjustments were made to the book values of the net assets of the companies
acquired to reflect their provisional fair values tothe Group. Acquired
inventories were valued at the lower of cost and net realisable value adopting
Group bases and any liabilities for warranties relating to past trading were
recognised. Other previously unrecognised assets and liabilities at
acquisition were included and accounting policies were aligned with those of
the Group where appropriate.



The adjustment to a prior period acquisition resulted in a reclassification of
balances between asset and liability categories, although overall the net
asset adjustment was £nil.





Analysis of cash outflow in the
Consolidated Cash Flow Statement
                                             Unaudited   Unaudited     Audited
                                           26 weeks to 26 weeks to 52 weeks to
                                          29 September   1 October    31 March
                                                  2012        2011        2012
                                                  £000        £000        £000
Cash consideration in respect of current
period acquisitions                             67,760      13,383      13,305
Cash acquired on acquisitions                  (3,636)        (49)        (49)
Overdrafts acquired on acquisitions                116           -           -
Contingent consideration paid in relation
to prior period acquisitions*                   15,764       5,395       5,411
Net cash outflow relating to acquisitions
(per cash flow statement)                       80,004      18,729      18,667
Bank loans acquired                              1,438       1,144       1,144
Net cash outflow, including repayment of
acquired bank loans                             81,442      19,873      19,811





* Of the £15,764,000 (26 weeks to 1 October 2011: £5,395,000; 52weeksto 31
March 2012: £5,411,000) contingent purchase consideration payment, £15,764,000
(26weeks to 1 October 2011: £5,395,000; 52weeksto 31 March 2012:
£5,411,000) was provided in the prior period's financial statements.





(Bi) Accutome, Inc.
                                          Provisional
                                     Book  fair value
                                    value adjustments   Total
                                     £000        £000    £000
Non-current assets
Intangible assets                       3       6,161   6,164
Property, plant and equipment         683        (39)     644
Deferred tax                            -         375     375
Current assets
Inventories                         2,768         111   2,879
Trade and other receivables         1,809       (527)   1,282
Total assets                        5,263       6,081  11,344
Current liabilities
Trade and other payables          (1,418)       (392) (1,810)
Overdrafts                          (116)           -   (116)
Bank loans                        (1,307)           - (1,307)
Provisions                           (49)        (94)   (143)
Non-current liabilities
Bank loans                          (131)           -   (131)
Provisions                              -        (25)    (25)
Deferred tax                            -     (2,342) (2,342)
Total liabilities                 (3,021)     (2,853) (5,874)
Net assets of businesses acquired   2,242       3,228   5,470
Cash consideration                                     11,230
Contingent purchase consideration                       3,120
Total consideration                                    14,350
Goodwill arising on acquisition                         8,880





On 2 April 2012, the Group acquired 100% of the issued share capital of
Accutome, Inc. (Accutome) for US$17,995,000 (US$20,298,000 including repayment
of US$2,303,000 bank loans). Accutome, based in Pennsylvania, USA, with a
wholly owned subsidiary located in The Netherlands, designs, manufactures and
sells surgical and diagnostic instruments and a variety of pharmaceuticals for
the ophthalmic marketplace. Accutome is best known for its leading ultrasound
diagnostic equipment (used prior to cataract surgery and to diagnose certain
eye conditions) and for its surgical instrumentation, featuring its leading
diamond bladed surgical knives. Accutome forms part of the Health and Analysis
sector and was acquired to further expand Halma's footprint in ophthalmic
diagnostic and surgical instrumentation. The excess of the fair value of the
consideration paid over the fair value of the assets acquired is represented
by supplier arrangement intangibles of £2,102,000, customer-related
intangibles of £2,861,000 and brand intangibles of £1,201,000 with residual
goodwill arising of £8,880,000. The goodwill represents:



a) the value of the acquired workforce;

b) the ability to exploit Accutome's distribution arrangements;

c) potential synergies with other Halma companies within the ophthalmic
market; and

d) the ability to exploit the Group's existing distribution arrangements,
particularly outside North America.



Contingent consideration of between US$nil and US$5,000,000 is payable
dependent on the profits of the acquired business for the period up to
September 2013. The Directors estimate that contingent consideration of
US$5,000,000 will be paid.





(Bii) Sensorex Inc.
                                 Book
                                value            Provisional fair value  Total
                                 £000                  adjustments £000   £000
Non-current assets
Intangible assets                   -                            12,689 12,689
Property, plant and equipment     286                                 -    286
Current assets
Inventories                       564                             (110)    454
Trade and other receivables     1,177                               (5)  1,172
Total assets                    2,027                            12,574 14,601
Current liabilities
Trade and other payables        (268)                              (10)  (278)
Provisions                          -                             (193)  (193)
Total liabilities               (268)                             (203)  (471)
Net assets of businesses
acquired                        1,759                            12,371 14,130
Cash consideration                                                      23,716
Contingent purchase
consideration                                                                -
Total consideration                                                     23,716
Goodwill arising on acquisition                                          9,586



On 2 April 2012, the Group acquired the trade and assets of Sensorex Inc.
(Sensorex) for US$38,003,000. Sensorex, based in California, USA, manufactures
electrochemical sensors for water analysis applications. Sensorex forms part
of the Health and Analysis sector and was acquired for its range of sensors
and associated accessories, which are incorporated by OEMs manufacturing
single and multi-parameter probes and instruments for monitoring water
quality, a market that is forecast to see continued growth. The excess of the
fair value of the consideration paid over the fair value of the assets
acquired is represented by customer-related intangibles of £9,998,000 and
technological know-how intangibles of £2,691,000 with residual goodwill
arising of £9,586,000. The goodwill represents:



a) the value of the acquired workforce;

b) potential synergies with other Halma companies within the Water market,
especially the hubs in China and India; and

c) the ability to exploit the Group's existing distribution arrangements,
particularly outside the USA.

There are no contingent consideration payment arrangements.





(Biii) SunTech Medical Group Limited
                                           Book
                                          value Provisional fair value   Total
                                           £000       adjustments £000    £000
Non-current assets
Intangible assets                             9                 12,586  12,595
Property, plant and equipment               672                  (266)     406
Deferred tax                                212                    323     535
Current assets
Inventories                               4,047                (1,212)   2,835
Trade and other receivables               3,146                  1,026   4,172
Cash and cash equivalents                 3,641                    (5)   3,636
Total assets                             11,727                 12,452  24,179
Current liabilities
Trade and other payables                (1,540)                  (191) (1,731)
Provisions                                 (51)                   (29)    (80)
Corporation tax                            (37)                    539     502
Non-current liabilities
Provisions                                 (21)                      -    (21)
Deferred tax                                  -                (4,783) (4,783)
Total liabilities                       (1,649)                (4,464) (6,113)
Net assets of businesses acquired        10,078                  7,988  18,066
Cash consideration                                                      32,814
Cash consideration to be paid
(estimated)                                                                804
Contingent purchase consideration                                        3,857
Total consideration                                                     37,475
Goodwill arising on acquisition                                         19,409



On 31 May 2012 the Group acquired 100% of the issued share capital of the
SunTech Medical Group Limited (SunTech), which is primarily based in the USA,
UK and China. The initial cash consideration of US$51,000,000 is adjustable
based on the final level of agreed working capital. SunTech forms part of the
Health and Analysis sector and is a pre-eminent supplier of clinical grade
non-invasive blood pressure monitoring products and technologies. The excess
of the fair value of the consideration paid over the fair value of the assets
acquired is represented by customer-related intangibles of £6,103,000,
technological know-how intangibles of £3,641,000 and brand intangibles of
£2,842,000 with residual goodwill arising of £19,409,000. The goodwill
represents:



a) the value of the acquired workforce; and

b) potential synergies with other Halma companies within the blood
pressure monitoring market.

Contingent consideration of between US$nil and US$6,000,000 is payable
dependent on the profits of the acquired business for the twelve months to
December 2012. The Directors estimate that contingent consideration of
US$6,000,000 will be paid.







11 Disposal of business



On 22 August 2012, the Group disposed of its Asset Monitoring sub-sector,
comprising Tritech Holdings Limited and its subsidiary Tritech International
Limited (together known as "Tritech"), for an initial cash consideration of
£18.9 million. Afurther £0.8 million was paid in October 2012 in respect of
cash and working capital held in the business at the time of sale. In
addition, £2.1 million is retained in escrow and will be released to Halma on
the anniversary of the transaction subject to any valid warranty/indemnity
claims being made by the purchaser. The Directors estimate that the entire
£2.1million will be received. The profit on disposal is estimated to be £8.2
million, being the total £21.8 million consideration above less £1.3million
of transaction costs, £8.0 million of goodwill and £4.3 million of net assets.
Due to the nature and size of the disposed operation, it has not been
separately disclosed as a discontinued operation as defined by IFRS 5.



The cash inflow in the Consolidated Cash Flow Statement of £18,955,000
comprises £18,900,000 initial consideration for Tritech and £1,500,000
released from escrow for the prior year disposal of Volumatic Limited less
£1,249,000 of transaction costs and £196,000 cash held by the disposed
business.



The profit on disposal of £3.5 million and cash inflow of £3,554,000 in the 52
weeks to 31 March 2012 related entirely to the disposal of Volumatic Limited
on 30 March 2012. Due to the nature and size of the disposed operation, it was
not separately disclosed as a discontinued operation as defined by IFRS 5.







12 Other matters



Seasonality

The Group's financial results have not historically been subject to
significant seasonal trends.



Equity and borrowings

Issues and repurchases of Halma plc's ordinary shares and drawdowns and
repayments of borrowings are shown in the Consolidated Cash Flow Statement.



Related party transactions

There were no significant changes in the nature and size of related party
transactions for the period to those reported in the 2012 Annual Report.







13 Principal risks and uncertainties



A number of potential risks and uncertainties exist which could have a
material impact on the Group's performance over the second half of the
financial year and could cause actual results to differ materially from
expected and historical results.

The Group has in place processes for identifying, evaluating and managing key
risks. These risks, together with a description ofthe approach to mitigating
them, are set out on pages 61 to 63 in the 2012 Annual Report, which is
available on the Group's website at www.halma.com.



The principal risks and uncertainties relate to:



● Operational risk
● Organic growth, supplier risk and competition
● Research and Development
● Intangible resources
● Laws and regulations
● Acquisitions
● Information Technology/Business Interruption
● Financial irregularities and international expansion
● Cash
● Treasury risks
● Economic conditions
● Pension deficit.



The Directors do not consider that the principal risks and uncertainties have
changed since the publication of the 2012 Annual Report. However
macro-economic uncertainty continues and movements in foreign exchange rates
remain a risk to financial performance.



The macro-economic and political circumstances particularly in the Eurozone,
but also globally, continue to generate uncertainty for our business. The
Group operates in a broad spread of markets, which substantially limits the
risk associated with instability in any given territory. Sales into Greece,
Ireland, Italy, Portugal and Spain represented just £12 million in the first
half of 2012/13 (4% of total Group sales). The Group does not have any
significant operations within these countries. Group sales into Mainland
Europe were £73 million (25% of total Group sales).



We mitigate the risk to demand by operating in markets underpinned by
regulatory drivers (where customer spending is often non-discretionary),
maintaining a diverse product portfolio and targetting continued growth in
developing markets. In addition, Halma's model of autonomy allows local
management to change strategy quickly when reacting to variable market
conditions.



Although the Group uses forward foreign exchange contracts to mitigate its
transactional currency exposure risk, it does not hedge the translation of its
currency profits. In the first half year, the US$ was on average 3% stronger
and the Euro and Swiss Franc on average 10% weaker relative to Sterling than
in the first half of the previous year. The net result was a 2% negative
impact on reported profit.







14 Responsibility statement



We confirm that to the best of our knowledge:


(a) these Condensed Financial Statements have been prepared in accordance with
    International Accounting Standard 34 'Interim Financial Reporting' as
    adopted by the European Union;

    
(b) this Half Year Report includes a fair review of the information required
    by Disclosure and Transparency Rule (DTR) 4.2.7R (indication of important
    events during the period and description of principal risks and
    uncertainties for the remainder of the financial year); and

    
(c) this Half Year Report includes a fair review of the information required
    by DTR 4.2.8R (disclosure of related party transactions and changes
    therein).







By order of the Board 

                     

Andrew Williams       Kevin Thompson

Chief Executive       Finance Director



20 November 2012







                     This information is provided by RNS
           The company news service from the London Stock Exchange

END


IR DMMMMVLZGZZM -0- Nov/20/2012 07:00 GMT
 
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