Trading Statement

RNS Number : 7871Z

Diploma PLC

15 January 2020

 

DIPLOMA PLC

                                           12 CHARTERHOUSE SQUARE, LONDON EC1M 6AX

TELEPHONE: [phone]

FACSIMILE: [phone]

FOR IMMEDIATE RELEASE

15 January 2020

DIPLOMA PLC

FIRST QUARTER TRADING UPDATE

 POSITIVE TRADING IN LINE WITH EXPECTATIONS

Diploma PLC, the international group supplying specialised products and services, is today issuing its first quarter trading update in respect of the year ending 30 September 2020, ahead of the Company's AGM to be held today at 12.00, midday.

The Group has made a positive start to the year with overall trading in line with expectations. Reported Group revenues in the first quarter ended 31 December 2019 increased by 9% over the comparable period.  At constant exchange rates, Group revenues increased by 11%, with acquisitions completed last year contributing 9% and underlying growth of 2%. The Group's operating margin in the first quarter remained in line with expectations.

Life Sciences Sector revenues on a reported and underlying basis were up 2% and 3% respectively, with revenues being held back by the timing of product delivered to customers. We expect that these revenues will be recovered in the second fiscal quarter. Seals Sector reported revenues were up 18%, which included a strong contribution from businesses acquired last year, in particular VSP Technologies. Underlying revenues were marginally ahead of the comparable period reflecting challenging industrial markets in both North America and Europe. Controls Sector revenues on a reported and underlying basis were up 3% and 4% respectively and included another strong contribution from Clarendon Specialty Fasteners.

The Group invested a further ca. £14m in acquiring two businesses since the previous year end comprising CR System Components, a Fastener business, based in Germany and PumpNSeal, a Seals business, based in Australia. The pipeline of acquisition opportunities remains healthy and the Group's balance sheet continues to benefit from strong cash generation.

Our expectations for the full year remain positive and unchanged. 

Notes:

1.   This trading update is based upon unaudited management accounts and has been prepared solely to provide additional information on trading to the shareholders of Diploma PLC.  It should not be relied on by any other party for other purposes.  Certain statements made in this update 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.   Diploma PLC uses alternative performance measures as key financial indicators to assess the underlying performance of the Group.  All references in this Statement to "underlying" revenues refer to reported results on a constant currency basis and before any contribution from acquired or disposed businesses.

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

Diploma PLC - Johnny Thomson, Chief Executive Officer	[phone]
Nigel Lingwood, Group Finance Director
Tulchan Communications -	[phone]
Martin Robinson
David Allchurch Guy Bates

NOTE TO EDITORS:

Diploma PLC is an international group supplying specialised products and services to a wide range of end segments in our three Sectors of Life Sciences, Seals and Controls.

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. 2,100 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. 16% p.a. through a combination of underlying growth and acquisitions.  Diploma is a member of the FTSE 250 with a market capitalisation of ca. £2.2bn.

Further information on Diploma PLC can be found at www.diplomaplc.com

LEI: 2138008OG17VYG8FGR19

 

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