Interim Management Statement

RNS Number : 4184L

Diploma PLC

01 August 2011

 



DIPLOMA PLC

                                           12 CHARTERHOUSE SQUARE, LONDON EC1M 6AX

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FOR IMMEDIATE RELEASE

1 August 2011

DIPLOMA PLC SECOND INTERIM MANAGEMENT STATEMENT IN RESPECT OF YEAR ENDING 30 SEPTEMBER 2011 Diploma PLC, the international group of businesses supplying specialised technical products and services, is today issuing its second Interim Management Statement which relates to the period from 1 April 2011 to date.  Group Trading Summary The strong underlying revenue and profit performance experienced in the first half of the year has continued into the second half of the year.  Revenues for the nine months to 30 June 2011 were 28% ahead of the comparable period in 2010.  After adjusting for currency effects and acquisitions, underlying revenues for the nine month period increased by ca. 18%; the underlying increase in third quarter revenues was 14% against a stronger prior year comparative.   Operating margins have remained at similar levels to those experienced in the first half of the year, despite further incremental investment being made in headcount and operating resources to meet the significant increase in activity. Sector Trading Trading conditions remain consistent with those reported in the Interim Report in May 2011. In Life Sciences, year to date revenues are 37% ahead of the prior year comparable period.  Good organic revenue growth has been boosted by currency benefits on translation and by the acquisitions of BGS and CMI in July and December 2010, respectively.  In Seals, year to date revenues are 36% ahead of the prior year comparable period.  Strong organic growth, in both the Aftermarket and Industrial OEM businesses, has been augmented by the acquisition of All Seals in September 2010.  In Controls, year to date revenues are 14% ahead of the prior year comparable period with good organic growth, unaffected by currency or acquisitions. Financial Position The Group's cash flow generation has continued to be strong and, as anticipated at the Half Year, growth in working capital has now slowed and overall working capital should begin to fall in the final quarter of the year. As at 29 July 2011, the Group had moved back into a positive net cash position (31 March 2011: £0.9m net debt) and remains well funded.  There have been no other material changes in the financial position of the Group in the period since the publication of the Half Year Report for the six months ended 31 March 2011. Outlook The Directors remain confident in the outlook for the remainder of the year, given the continuing strong overall trading performance. Looking further ahead, whilst recognising the global economic uncertainties and more demanding comparatives, the Group is confident of delivering "GDP-plus" levels of underlying revenue growth. To accelerate overall growth and build further value, we continue to pursue carefully selected, value-enhancing acquisitions, funded by the Group's strong balance sheet and free cash flow. Notes: 1.  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.  Certain statements made in this Statement 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.  The Group's results for the year ending 30 September 2011 are expected to be released in mid November 2011. 3.  A copy of this Statement, together with further information about Diploma PLC, may be viewed on its website at www.diplomaplc.com Conference Calls: A telephone conference call will be held with analysts and investors at 8.00am today. Please contact Tulchan Communications for details. Enquiries: Diploma PLC - [phone] Bruce Thompson, Chief Executive Officer Nigel Lingwood, Group Finance Director Tulchan Communications - [phone] David Allchurch Martin Robinson 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. 850 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. 14% p.a. through a combination of organic growth and acquisitions.  The current market capitalisation is ca. £420m.

 

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