Good Eggs - Halma PLC

An insight into the impact of your investments 🌍
Scientist in lab | Wealthify
Reading time: 5 mins

When you think about lifesaving technology, the first thing that usually comes to mind may be the machines doctors and nurses use, but lifesaving technology is something Halma take pride in. In the US, 38% of home fire deaths result from fires in which no smoke alarms are present. There are around 37,000 house fires every year in the UK, resulting in approximately 200 fire related deaths. You are 4 times more likely to survive with a working smoke alarm. Nearly 32% of Halma’s annual revenue is derived from the production and sale of smoke detectors and other infrastructural sensors designed to save lives.

Our Ethical Investment Plans include Halma, which is held in the Royal London Sustainable Leaders Fund, Stewart Investors Worldwide Fund and the Pictet Global Environment Opportunities Fund.

The finance stuff 📈
Company value: £9bn
Share price: £23.70
2019 Profits: £171.7m


What does Halma do?
🤷
With a long line of history and transformations, Halma PLC was established as a Tea Company in the 1890s. They switched to Rubber production in 1937 and became The Nahalma Rubber Estate Company Limited. Once the rubber production in Sri-Lanka was nationalised by the government, the company moved into the investment industry, brokering deals with their Tea and Rubber connections. Early in the 1970s, the company acquired a series of different companies in a combination of mechanical and engineering sectors.

Halma's acquisition strategy targets companies who operate in niche sectors of highly regulated industries such as health, safety, and the environment. Halma owns and operates around 50 companies whose core products include fire/smoke detectors, safety systems for controlling hazardous industrial processes, gas detection instruments for personnel and plant safety and UV equipment for water treatment to name just a few. Halma has been listed on the London Stock Exchange for the last 45 years and solidified its spot in the FTSE 100 in December 2017.

What positive impact is Halma having? 🌱
Halma's industry leading companies address global issues which are key to human wellbeing. The main environmental focuses for Halma's companies include water leakage detection and wireless monitoring, gas emissions monitoring and detecting gas leaks within pipelines. Halma targets UV water sterilisation as the primary method due to the non-biological nature of the process, thus preventing the need to use dangerous chemicals.

So far in 2020, Halma has made progress in a number of different sustainability points which were part of their objectives, and remains a constituent of the FTSE4Good, the ethical equivalent of the FTSE All-Share. Halma has continued to drive home the importance of workplace diversity and inclusion and has achieved 40% gender balance on its plc Board, 58% gender balance on its Executive Board and 50% gender balance among its Divisional Chief Executives. The Group CEO, Andrew Williams, has been an active member of the 30% club since 2017. This club campaigns and advocates for at least 30% of board seats to be held by women.

 

What Halma has to say 📣
“Halma has a clear purpose, and integral to delivering it is being a socially responsible company which demonstrates strong ethical behaviour within a framework of transparent and robust governance. These attributes are well-embedded within our organisation and are closely monitored by the Board. I am very pleased that our achievements have been recognised, for example by an improvement this year in our CDP Climate Change rating to B (Management) and our continued membership of the FTSE4Good Index. In last year’s Annual Report, we selected four of the UN Sustainable Development Goals to be the focus of our sustainability initiatives – being the areas where Halma could have the most impact. We made progress in the year in supporting each of these goals, as well as in other aspects of sustainability, such as reducing our environmental impact, risk-assessing modern slavery risks in our supply chain, and enhancing our sustainability disclosure and reporting.

Our focus in the year ahead will be to ensure Halma’s long-term sustainability as we continue to adapt to the challenges and opportunities of the COVID-19 environment. Our priorities will be: the health and wellbeing of our employees; ensuring safe working practices; supporting our communities and the evolving needs of our customers and suppliers; and preserving our financial strength so that we are well-placed to benefit from new opportunities for products, services or market applications, as they arise.”

Paul Walker

Chairman - Halma PLC

What Royal London think… 🤓
“Halma's products play a significant role in ensuring safety in industrial processes and in public spaces; improving healthcare diagnosis and treatment; and addressing key environmental challenges through innovative monitoring, analysis and treatment solutions. Halma's principal environmental technologies are water leakage detection and wireless monitoring, gas emissions monitoring and detection of leakage from natural gas pipelines, water and effluent analysis, ultraviolet (UV) water treatment and optical sensing. It promotes the use of UV water sterilisation, which eliminates the need to use dangerous chemicals, as well as making products that minimise the waste of clean water.

Marc Ronchetti (CFO) is the appointed Board member responsible for leading Halma's approach to sustainability and health & safety, and he regularly updates the Board on our progress in these areas. This is impressive and unusual. Halma is a long-standing constituent of the FTSE4Good Index which is another hallmark of having strong ESG practices. Halma's strategy is to focus on acquiring and growing businesses in niche markets with global reach, within its chosen market areas of Safety, Health and the Environment. These markets have resilient, long-term growth drivers, and high levels of defensibility. Key drivers for Halma's end markets would be population growth, urbanisation, higher regulatory standards, increasing energy demand.”

To wrap up 🎁
With life-saving technology at the forefront of Halma’s companies, and a continuing effort for diversity and inclusion, it is easy to see why Halma is held in 3 separate funds used in our Ethical Plans. With quite a unique arrangement unlike many sustainable companies, Halma is the parent aiming to nurture and develop smaller companies with incredible technology to help reach the masses. Halma is not only focused on the products, but also how the companies are run, ensuring that every company they own and manage is developing their principles and practices to make sustainability, diversity, governance and the environment core pillars in their operations.

Please remember the value of your investments can go down as well as up, and you could get back less than invested.

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