Trading Update

RNS Number : 1342J

Diploma PLC

28 March 2018

 

DIPLOMA PLC

                                           12 CHARTERHOUSE SQUARE, LONDON EC1M 6AX

TELEPHONE: [phone]

FACSIMILE: [phone]

FOR IMMEDIATE RELEASE

28 March 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 six months ending    31 March 2018, ahead of going into its close period.

Trading Summary

The Group has continued to trade robustly in the first half of the year supported by strong market conditions in many of its key markets and geographies. Reported Group revenues in the first half of the year are expected to be ca. 8% ahead of the comparable period, despite a ca. 4% currency headwind from the strengthening of UK sterling. At constant exchange rates, Group revenues are expected to increase by ca. 12% with acquisitions completed during the last twelve months contributing ca. 5% and underlying growth of ca. 7%. 

In the Life Sciences Sector, reported revenues are expected to be ca. 16% 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 be up ca. 8% reflecting much stronger capital sales and against a weak comparative. In the Seals Sector, reported revenues are expected to increase by ca. 4% (up 8% on an underlying basis) principally driven by strong trading activity across the North American businesses where underlying revenues are expected to grow by ca. 12%. In International Seals, underlying revenues have improved in the second quarter and are expected to grow by ca. 3% in the first half with stronger trading in the European businesses being partly offset by weaker performances in Russia and Australia. In the Controls Sector, reported revenues are expected to increase by ca. 6% (up 3% on an underlying basis) against a very strong comparative last year. The Group's adjusted operating margin remains in line with the comparable period last year.

The Group has a robust balance sheet and a proven track record of strong cash generation which the Group seeks to reinvest in both organic growth and acquiring new businesses to accelerate growth. During the first half, working capital has increased substantially to support the much stronger trading environment and is likely to reach its seasonal high-point at 31 March 2018. The Group continues to have a healthy pipeline of acquisition opportunities.

The Group is expected to hold net cash funds in excess of £16m at 31 March 2018 and retains access to a £60m revolving credit facility.

As announced on 30 January 2018, Richard Ingram will join the Board on 23 April 2018 and become Chief Executive Officer on 8 May 2018.

The Group's Half Year results will be announced on Monday, 14 May 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 may be viewed on the Company's website at www.diplomaplc.com.

Diploma PLC -	[phone]
Bruce Thompson, Chief Executive Officer
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. £1.3bn.

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

LEI: 2138008OG17VYG8FGR19

 

END

 

 

TSTEDLFLVXFFBBB