Trading Statement

RNS Number : 4012U

Diploma PLC

18 January 2017

 

DIPLOMA PLC

                                           12 CHARTERHOUSE SQUARE, LONDON EC1M 6AX

TELEPHONE: [phone]

FACSIMILE: [phone]

FOR IMMEDIATE RELEASE

18 January 2017

DIPLOMA PLC

FIRST QUARTER TRADING UPDATE

Diploma PLC, the international group of businesses supplying specialised technical products and services, is today issuing its first quarter trading update in respect of the year ending 30 September 2017, ahead of the Company's AGM to be held today at 12.00, midday.

Trading Summary

The Group has made a robust start to the year with overall trading in line with expectations. Group revenues in the first quarter ended 31 December 2016 increased by 23% on a reported basis over the comparable period last year.  At constant exchange rates, Group revenues increased by 6%, with acquisitions completed during the last twelve months contributing 2% net and underlying organic growth of 4%.  The very substantial depreciation of UK sterling against all the major global currencies contributed a 17% increase to reported Group revenues.

In the Life Sciences Sector, revenues were up 11%, reflecting the impact of currency movements on translation of the results of the Healthcare businesses. On an underlying basis, revenues were down 1% due to weaker sales of capital equipment against a strong comparative last year. In the Seals Sector, revenues increased by 22%, up 1% on an underlying basis, again reflecting the impact of currency movements on translation. In North America, the Aftermarket businesses showed good growth and stronger activity, which offset the impact of a weak manufacturing sector on the Industrial OEM businesses; International revenues showed modest growth. In the Controls Sector, reported revenues were up 39% with Cablecraft, acquired in March 2016, making a significant contribution. On an underlying basis, after adjusting for currency and acquisitions, revenues increased by 13%, driven by strong growth in the Clarendon specialty fastener business, but also against the background of weak comparatives in other Controls businesses.

The Group's operating margin remains in line with expectations and slightly ahead of the comparable period last year.

Financial Position

The Group has a robust balance sheet and has a proven track record of strong cash generation which the Group seeks to reinvest in acquiring new businesses to accelerate growth. Net cash funds at 31 December 2016 were £15.1m, compared with £10.6m reported at 30 September 2016.

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.

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. 1,600 employees and its principal operating businesses are located in the UK, Northern Europe, North America and Australia.

Over the last five years, the Group has grown adjusted earnings per share at an average of ca. 8% p.a. through a combination of organic growth and acquisitions.  Diploma is a member of the FTSE 250 with a market capitalisation of ca. £1.1bn.

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

 

END

 

 

TSTGGUPAGUPMGQM