Interim Management Statement

RNS Number : 6213V

Diploma PLC

16 January 2013

 



DIPLOMA PLC

                                           12 CHARTERHOUSE SQUARE, LONDON EC1M 6AX

TELEPHONE: [phone]

FACSIMILE: [phone]

FOR IMMEDIATE RELEASE

16 January 2013

DIPLOMA PLC

FIRST INTERIM MANAGEMENT STATEMENT

Diploma PLC, the international group of businesses supplying specialised technical products and services, is today issuing its first Interim Management Statement in respect of the year ending 30 September 2013, ahead of the Company's AGM to be held today at midday. This Statement relates to the period from 1 October 2012 to date and is based on the first quarter's trading.

Trading Summary

Group revenues in the first quarter ended 31 December 2012, which is seasonally the quietest quarter of the year, were 14% ahead of the comparable period last year. On an underlying basis, after adjusting for currency effects and acquisitions, revenues increased by 5% against strong prior year comparatives. As anticipated, operating margins reduced as the Group continued to implement its programme of planned investments to support the future growth of the business.

In the Life Sciences sector, revenues were 17% ahead of the comparable period last year, boosted by the contribution from DSL, acquired in June 2012 and from strong sales of consumables which more than offset slightly weaker capital revenues.  In the Seals sector, revenues increased by 12%, benefiting from the acquisition of J Royal towards the end of December 2011. As expected, underlying Seals revenue growth has moderated against a very strong comparative last year. In the Controls sector, revenues benefited from the small acquisitions completed last year and were 11% ahead of the comparable period.  However the economic malaise in Continental Europe has had a broader impact across Northern European markets and underlying trading conditions across the Controls businesses remain challenging. 

Financial Position

The Group has a robust balance sheet and has a proven track record of strong cash generation. In the quarter ended 31 December 2012, operational cash flow remained strong. Free cash flow in the quarter was ca. £3m, reflecting capital expenditure incurred in completing two business relocations in the UK and Canada.  Net cash funds increased to ca. £11.0m at 31 December 2012.

On 8 January 2013, the Group acquired the remaining 20% of shares in BGS, our small Australian healthcare supplier acquired in July 2010. The initial consideration was £0.4m and further consideration of up to a maximum of £0.5m is payable based on the performance of this business in the financial years ending 30 September 2013 and 2014. The BGS operation and administrative functions will now be integrated with the DSL business based in Melbourne.

There have been no other significant changes in the position of the Group in the period since the publication of the Annual Report & Accounts for the year ended 30 September 2012.

The next update on trading is expected to be issued in March 2013, prior to entering the close period in respect of the Half Year results for the six months ending 31 March 2013.

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

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'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. 1,100 employees and its principal operating businesses are located in the UK, Germany, US, Canada and Australia.

Over the last five years, the Group has grown adjusted earnings per share at an average of ca. 20% pa through a combination of organic growth and acquisitions.  Diploma is a member of the FTSE 250 with a market capitalisation of ca. £600m.

 

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