Half Year Trading Update

RNS Number : 0784U

Diploma PLC

27 March 2019

 

DIPLOMA PLC

                                           12 CHARTERHOUSE SQUARE, LONDON EC1M 6AX

TELEPHONE: [phone]

FACSIMILE: [phone]

FOR IMMEDIATE RELEASE

27 March 2019

DIPLOMA PLC

HALF YEAR TRADING UPDATE

ROBUST FIRST HALF TRADING

ON TRACK FOR GOOD PROGRESS IN FY2019 IN LINE WITH EXPECTATIONS

Diploma PLC, the international group of businesses supplying specialised technical products and services, today issues a trading update for the six months ending 31 March 2019, ahead of entering its close period.

Group

Trading has remained robust with good underlying growth across all Sectors, particularly within Controls. Underlying revenues are expected to be up 5% on the prior period. Reported revenues are expected to be up 10% at constant exchange rates, including a 4% contribution from acquisitions, net of disposals.

Operating margin is expected to be in line with the comparable period last year.

Life Sciences

Underlying and reported revenues are expected to be up ca. 5% with good growth across most business areas, particularly in Canadian Surgical and Endoscopy and Australian Diagnostics.

Seals

Underlying revenues are expected to be up ca. 4%. North American Seals revenues showed solid underlying growth in the second quarter against a very strong comparative. This offset a weaker first quarter which, as previously announced, was impacted by initial delivery delays in Industrial OEM, following the new ERP implementation. International Seals has continued to deliver strong underlying growth.

Controls 

Underlying revenues are expected to be up ca. 8% with strong growth from deeper penetration into the Aerospace market, supported by generally positive end markets.  Good initial contribution from the recent acquisitions of FS Cables and Gremtek.

Financial position

The Group's balance sheet remains strong. Working capital at 31 March 2019 will increase to ca. 17% of revenues reflecting increase in inventories to meet strategic priorities. Cash funds at 31 March 2019 will be ca. £18m.

Acquisitions

Encouraging acquisition pipeline, while opportunities remain competitive.

Johnny Thomson, who became Group CEO in February 2019, commented:

"Diploma's performance in the first half has been robust. Despite the global macroeconomic uncertainties, the Group remains on track to deliver good growth and modest margin progression for the full year in line with expectations. As I continue to learn more about the Diploma businesses, I am encouraged by the quality and passion of the people, the constant commitment to add value to our customers and the exciting prospects for continued growth."

The results for the six months ending 31 March 2019 will be released on 13 May 2019.

Notes:

1.   This trading update is based upon unaudited management accounts and has been prepared solely to provide additional information on trading to the shareholders of Diploma PLC.  It should not be relied on by any other party for other purposes.  Certain statements made in this update are forward-looking statements.  Such statements have been made by the Directors in good faith using information available up until the date that they approved this Statement.  Forward-looking statements should be regarded with caution because of the inherent uncertainties in economic trends and business risks.

2.   Diploma PLC uses alternative performance measures as key financial indicators to assess the underlying performance of the Group.  All references in this Statement to "underlying" revenues refer to reported results on a constant currency basis and before any contribution from acquired or disposed businesses.

3.   A copy of this Statement, together with further information about Diploma PLC, may be viewed on its website at www.diplomaplc.com

Diploma PLC - Johnny Thomson, Group Chief Executive Officer	[phone]
Nigel Lingwood, Group Finance Director
Tulchan Communications -	[phone]
Martin Robinson
David Allchurch

NOTE TO EDITORS:

Diploma PLC is an international group of businesses supplying specialised technical products and services to the Life Sciences, Seals and Controls industries.

Diploma's businesses are focussed on supplying essential products and services which are funded by the customers' operating rather than their capital budgets, providing recurring income and stable revenue growth.

Our businesses then design their individual business models to closely meet the requirements of their customers, offering a blend of high quality customer service, deep technical support and value adding activities.  By supplying essential solutions, not just products, we build strong long term relationships with our customers and suppliers, which support attractive and sustainable margins.

Finally we encourage an entrepreneurial culture in our businesses through our decentralised management structure.  We want our managers to feel that they have the freedom to run their own businesses, while being able to draw on the support and resources of a larger group.  These essential values ensure that decisions are made close to the customer and that the businesses are agile and responsive to changes in the market and the competitive environment.

The Group employs ca. 1,800 employees and its principal operating businesses are located in the UK, Northern Europe, North America and Australia.

Over the last ten years, the Group has grown adjusted earnings per share at an average of ca. 13% p.a. through a combination of underlying growth and acquisitions.  Diploma is a member of the FTSE 250 with a market capitalisation of ca. £1.6bn.

Further information on Diploma PLC can be found at www.diplomaplc.com

LEI: 2138008OG17VYG8FGR19

 

END

 

 

TSTBLGDXGBDBGCL