Interim Management Statement

RNS Number : 3990K

Diploma PLC

30 July 2013

 



DIPLOMA PLC

                                           12 CHARTERHOUSE SQUARE, LONDON EC1M 6AX

TELEPHONE: [phone]

FACSIMILE: [phone]

FOR IMMEDIATE RELEASE

30 July 2013

DIPLOMA PLC

SECOND INTERIM MANAGEMENT STATEMENT

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 2013 to date and is based on the third quarter's trading.

Trading Summary

Revenues in the nine months ended 30 June 2013 were 10% ahead of the comparable period last year. After adjusting for currency effects and acquisitions, revenues increased by 4%, with underlying revenue growth stronger in the third quarter against a less challenging prior year comparative. Operating margins for the nine months have reduced towards 19%, mainly reflecting the phasing of costs incurred in the Group's Investment for Growth programme; the weakening in the Canadian and Australian Dollars is also beginning to impact Healthcare gross margins.

In the Life Sciences sector, revenues for the nine months ended 30 June 2013 were 21% ahead of the comparable period last year, boosted by the contribution from DSL, acquired in June 2012 and from strong sales of consumables across the Healthcare businesses. In the Seals sector, revenues have increased by 5%, benefiting from the acquisition of J Royal towards the end of December 2011; underlying Seals revenue growth, while improving, has remained modest. In the Controls sector, revenues benefited from the small acquisitions completed last year and were 7% ahead of the comparable period.  However despite some improvement in certain markets since the half year, 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 good cash generation. In the nine months ended 30 June 2013, free cash flow remained strong at ca. £21m; this was after incurring capital expenditure of £3.4m and after funding the Company's Employee Benefit Trust with £4.7m to meet its commitments under the Group's LTIP scheme. After payment of the interim dividend in June of £5.6m, net cash funds at 30 June 2013 were ca. £10m.

Acquisitions remain an integral part of the Group's growth strategy and a promising pipeline of opportunities is growing with the additional resources invested.  The principal focus now is on bringing opportunities to completion in the face of lengthened transaction processes.

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 late September 2013, prior to entering the close period in respect of the Full Year results for the year ending 30 September 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. 1,200 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. £650m.

 

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