Will Halma plc surge higher than Rolls-Royce Holding PLC, BAE Systems plc and Spectris plc after trading update?

Does Halma plc (LON:HLMA) (HLMA.L) offer more capital growth potential than Rolls-Royce Holding PLC (LON:RR) (RR.L), BAE Systems plc (LON:BA) (BA.L) and Spectris plc (LON:SXS) (SXS.L)?

Halma plc
Halma plc

Halma plc (LON:HLMA) (HLMA.L) has released a trading update today. It covers the period from 1 October 2017 to today.

The company expects adjusted profit before tax for the full year to be in line with market expectations. It has benefitted from the diversity of its markets and robust growth drivers during the period. Although there was a positive currency impact in the earlier part of the financial year, this has now reversed and a net neutral currency impact is expected for the full year.

All of Halma’s sectors have traded in line with its forecasts. Its order intake has remained ahead of expectations, with organic constant currency revenue and profit growth continuing into the second half of the year.

The acquisition of Argus and Sterling was undertaken in December 2017. The integration of the business is progressing well, and it could provide a growth stimulus over the long run in my opinion.

In the last year the Halma share price has risen by 19%. That’s a better performance than industrial sector peers such as Rolls-Royce Holding PLC (LON:RR) (RR.L), BAE Systems plc (LON:BA) (BA.L) and Spectris plc (LON:SXS) (SXS.L). Rolls-Royce is up 17%, BAE is down 10% and the Spectris stock price has moved 10% higher during the same one year time period.

In my view, Halma is performing well and has a bright future ahead of it. It seems to have a good mix of organic growth potential, with its financial position providing it with the potential to engage in acquisition activity. With all of its business units performing well in recent months, it seems to be in a strong position to deliver on its forecast profit for the full year.

Therefore, I believe it could continue to perform well on a relative basis from an investment perspective over the long run.

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Robert Stephens is a CFA Charterholder and an Equity Analyst by trade. He is a passionate private investor who has been buying and selling shares for many years, owning a wide range of UK shares in the process. He has written for Citywire and The Motley Fool US and now runs his own business. To contact Robert, please email [email protected] or use one of the other contact methods available on the 'Contact Us' page