Trading Statement

RNS Number : 0518Z

Diploma PLC

29 August 2018

 

DIPLOMA PLC

                                           12 CHARTERHOUSE SQUARE, LONDON EC1M 6AX

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FOR IMMEDIATE RELEASE

29 August 2018

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 year ending 30 September 2018. Trading Summary The Group has continued to trade robustly in the second half of the year and remains on track to report results for the full year in line with expectations. Reported Group revenues for the year ending 30 September 2018 are expected to increase by ca. 7%. The headwind from the appreciation of UK sterling against the previous year has eased in the second half and is expected to impact revenues by ca. 3%. The acquisitions completed during the last eighteen months are expected to contribute ca. 3%, net of a small disposal. On an underlying basis, after adjusting for the impact of acquisitions and currency effects, Group revenues for the year are expected to increase by ca. 7%. In the Life Sciences Sector, reported revenues are expected to be ca. 6% ahead of the comparable period, with a strong contribution from Abacus dx, the Australian diagnostic business acquired in April last year. On an underlying basis, Life Sciences revenues are expected to increase ca. 4% reflecting the benefit of good growth from the introduction of a new supplier in the Healthcare business and despite some capital project delays. In the Seals Sector, reported revenues have continued to benefit from strong trading conditions in both North America and Europe and are expected to increase by ca. 6% (up 9% on an underlying basis). In North America underlying revenues are expected to increase by ca. 11% although this rate of growth eases against a strong comparative in the final quarter of the financial year. In International Seals, underlying revenues have strengthened further in the second half of the year and are expected to grow by ca. 6% with strong trading in the European businesses supported by improved trading in Russia and Australia. In the Controls Sector, reported revenues are expected to increase by ca. 7% (up 4% on an underlying basis) against a strong comparative last year and reflecting generally positive trading conditions in its major European markets. The Group's operating margin remains in line with expectations and is likely to be similar to that reported in the first half of the year. Acquisitions As announced on 22 August 2018, the Group has acquired FS Cables, a UK supplier of specialist cable products, for an initial cash consideration of £17.0m. The pipeline of acquisition opportunities remains healthy. The Group has a robust balance sheet and a proven track record of strong cash generation which the Group continues to reinvest in acquiring new businesses to accelerate growth. At 30 September 2018, the Group's net cash funds are expected to be ca. £30m and the Group retains access to a £60m revolving credit facility. In June 2018, the North American Seals business disposed of its engine and transmission gasket business for net asset value of ca. £4.5m. The Group's results for the year ending 30 September 2018 will be announced on Monday, 19 November 2018.  Notes: 1.     This Trading Update, which is based upon unaudited management accounts, has been prepared solely to provide additional information to the shareholders of Diploma PLC. 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] Nigel Lingwood, Group Finance Director Tulchan Communications - [phone] Martin Robinson David Allchurch

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. 1,700 employees and its principal operating businesses are located in the UK, Northern Europe, North America and Australia.

Over the last ten years, the Group has grown adjusted earnings per share at an average of ca. 14% p.a. through a combination of underlying growth and acquisitions.  Diploma is a member of the FTSE 250 with a market capitalisation of ca. £1.5bn.

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

LEI: 2138008OG17VYG8FGR19

 

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