Interim Management Statement

RNS Number : 4316F

Diploma PLC

13 January 2010

 



DIPLOMA PLC

          12 CHARTERHOUSE SQUARE, LONDON EC1M 6AX

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FOR IMMEDIATE RELEASE

13 January 2010

DIPLOMA PLC

INTERIM MANAGEMENT STATEMENT

Diploma PLC, the international group of businesses supplying specialised technical products and services, is today issuing its first Interim Management Statement of its new financial year, ahead of the Company's AGM to be held today at Brewers Hall, Aldermanbury Square, London, EC2V 7HR at 12.00 midday. This Statement relates to the period from 1 October 2009 to date and includes the first quarter's trading.

Trading

The Group has made a solid start to the new financial year with further evidence that key markets have stabilised. Revenues in the first quarter were 7% ahead of the comparable period last year and operating margins continued to benefit from cost reductions implemented last year. On an underlying basis, adjusting for currency effects and the acquisition of RTD Seals in January 2009, revenues for the first quarter remained unchanged from last year. 

The Life Sciences sector reported revenues 16% ahead of the prior comparable period driven by further growth in the Canadian Healthcare businesses and currency benefits. Revenue from the European environmental business remained stable.

The Seals sector reported revenues 11% ahead of the prior comparable period, benefiting from a full quarter contribution from RTD Seals; after adjusting for the acquisition of RTD Seals and currency effects, revenues were 4% below the comparable prior period. In North America and the UK, underlying revenues have stabilised and are showing signs of recovery. However, Continental European revenues were well below strong prior year comparatives, reflecting the later arrival of the economic downturn in these markets last year.

The Controls sector reported revenues 3% below the comparable prior period, again largely reflecting strong prior year comparatives from the Continental European businesses. The UK businesses achieved revenues broadly in line with the comparable period last year, with strong sales to Military Aerospace and Defence offsetting weaker activity in the general Industrial markets. 

Disposal of Anachem Limited 

The Group completed the disposal of the Manual Liquid Handling business of Anachem on 7 January 2010, as previously announced in the Group's Preliminary Statement on 16 November 2009. Cash proceeds of £7.8m were received on completion, of which £0.8m will be held in escrow. Further sale proceeds of up to £0.8m may be receivable, depending on the revenues earned in the twelve months ending 31 December 2010.

Acquisition of Minority Interests

Pursuant to the Sale and Purchase Agreement for the acquisition of Somagen Diagnostics Inc, dated 15 July 2004, the Group has now completed the acquisition of the final 8.8% of the outstanding shares in Somagen Diagnostics Inc from the minority shareholders for consideration of £2.5m (C$4.3m), following the exercise of put/call 

options, agreed at the time of acquisition. The Group's shareholding in Somagen Diagnostics Inc has now increased from 91.2% to 100%. The Group has also paid dividends to minority shareholders of ca £1.0m, of which £0.4m was paid during December 2009.

Financial Position

The improvement in underlying trading, together with the continuing focus on carefully managing any expansion in working capital, has resulted in another quarter of strong cash flow. At 31 December 2009, the Group's cash balances had increased to ca. £25.0m; this is before accounting for the proceeds from the sale of the Anachem business and the purchase of the minority interests in Somagen.

The Group also maintains a committed multi-currency facility of £20m which expires in November 2010; this will be reviewed during the next six months.

There have been no other significant changes in the position of the Group in the period since the publication of the Annual Report for the year ended 30 September 2009.

The next update on trading is expected to be issued as part of the Half Year results for the six months ending 31 March 2010, which are expected to be released on 10 May 2010.

Notes:

• This Interim Management Statement, which is based upon unaudited management accounts, has been prepared solely to provide additional information to the shareholders of Diploma PLC in order to meet the requirements of the UK Listing Authority's Disclosure and Transparency Rules. It should not be relied on by any other party, for other purposes.  
  

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

For further enquiries please contact:
Bruce Thompson, Chief Executive Officer	020 7549 5700
Nigel Lingwood, Group Finance Director	020 7549 5705
Simon Bloomfield, Bankside Consultants	020 7367 8861

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 achieves stable growth and attractive margins from its focus on supplying specialised technical products to markets which value high levels of customer service, technical support and value adding activities. A high proportion of revenues are generated from essential products and services funded by operating, rather than capital budgets.

The Group employs ca. 825 employees and its principal operating businesses are located in the UK, Germany, US and Canada.

Over the last five years, the Group has grown adjusted earnings per share at an average of ca. 16% p.a. through a combination of organic growth and acquisitions. The current market capitalisation is ca. £200m.

 

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