Trading Statement

RNS Number : 7560I

Diploma PLC

30 March 2015

 

DIPLOMA PLC

                                           12 CHARTERHOUSE SQUARE, LONDON EC1M 6AX

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FOR IMMEDIATE RELEASE

30 March 2015

DIPLOMA PLC

TRADING UPDATE

Diploma PLC, the international group of businesses supplying specialised technical products and services, is today issuing a trading update for the six months ending 31 March 2015, ahead of going into its close period.

Trading Summary

The businesses acquired during the past year have made a good contribution to the Group's overall results and revenues for the six months ending 31 March 2015 are expected to be ca. 9% ahead of the comparable period.  The acquired businesses have contributed ca. 9% to Group revenues, but currency volatility has continued to impact the Group's results, reducing revenues by ca. 2%. On an underlying basis, after adjusting for the impact of currencies and acquisitions, revenues are expected to increase by ca. 2%. 

The main driver to revenue growth has been from the Seals businesses where revenues have benefited both from acquisitions completed last year and from strong demand, particularly in the North American Seals businesses. In Life Sciences, the recent acquisition of the TPD business has contributed to a strong increase in headline revenues. Underlying growth has been flat as the Canadian Healthcare businesses have faced tougher markets, with hospitals increasing their focus on controlling costs as they approach the end of their budgetary fiscal year. In Controls, underlying revenues have reduced against the strong prior year comparative, reflecting lower activity in the Motorsport and Aerospace fastener sectors and softer European industrial markets. 

Currency movements have continued to impact the Group's results on both a translational and transactional basis.  Further depreciation against UK sterling, relative to last year, of the Euro and the Canadian and Australian dollars, more than offset the impact from the appreciation of the US dollar.  The transactional impact from currency depreciation on the Life Sciences businesses has contributed to a slightly lower Group operating margin, as anticipated. 

Financial Position

After spending ca. £34m on completing the acquisitions of TPD (Life Sciences) in October 2014 and Kubo (Seals) in early March 2015, the Group expects to have net debt of ca. £18m at 31 March 2015, compared with cash balances of £21.3m at 30 September 2014.

The Board will provide a further update on trading prospects for the year when the Group's Half Year's results are announced on Monday, 11 May 2015.

Note:  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 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. 1,300 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 20% p.a. through a combination of organic growth and acquisitions.  Diploma is a member of the FTSE 250 with a market capitalisation of ca. £900m.

Further information on Diploma PLC, together with a copy of this Announcement, is available at www.diplomaplc.com

 

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