Halma Shares Plunge Despite Record Revenue and Profit

Shares in Halma (LON: HLMA) plummeted more than 11% on Thursday — shedding over 510p to trade around 4,128p — as investors took fright at customer concentration risks in its fast-growing photonics division, even as the FTSE 100 safety and technology group delivered a string of record financial results.

For the 12 months to 31 March 2026, Halma grew revenue 15% to £2.58 billion and adjusted earnings before interest and tax (EBIT) 22% to £594.5 million, both surpassing City forecasts and crossing the £2.5 billion and £500 million milestones for the first time. It was also the company’s 23rd consecutive year of adjusted profit growth.

Organic revenue rose 16%, with the photonics business — which serves the booming data centre industry — contributing around eight percentage points of that growth. However, analysts and investors flagged a growing concern: revenue from a single photonics customer climbed from 15% to 20% of group sales during the year, raising concentration risk warnings.

Halma invested a record £600 million during the year, including £447 million across five acquisitions, with two further deals worth around £75 million completed after the year-end. Adjusted cash conversion remained healthy at 93%, ahead of its 90% target, while net debt stood at a comfortable 1.16 times adjusted EBITDA.

The board raised its total dividend 7% to 24.74p per share — a 47th consecutive year of growth of 5% or more — though the payout came in slightly below the 25.9p the market had anticipated.

Looking ahead, Halma guided for low double-digit organic revenue growth in FY2027, but with shares trading at roughly 36 times forward earnings — well above a sector average of 22 times — analysts at Panmure Liberum noted the premium valuation leaves little room for any disappointment.