- First half tops expectations
- Full-year forecasts increased
- Recent acquisitions excelled
Specialist manufacturer and distributor Diploma (DPLM) posted better-than expected results for the six months to March and lifted its full-year guidance, sending its shares soaring.
The stock price gained as much as 768p or 18% to a new all-time high of £49.90, sending the shares to the top of the FTSE 100 leader board.
STRONG GROWTH DESPITE MIXED MARKETS
For the first half of its financial year, Diploma reported a 14% rise in revenue to £728 million, driven by 9% growth in like-for-like sales, and an increase of 1.9% in its adjusted operating margin to 21.5% thanks to acquisitions, operational leverage and cost control.
That led to a 23% increased in adjusted EPS (earnings per share) to 80.2p from 65.1p and a ROCE (return on capital employed) of 19.1% from 18% last year.
The Controls business registered 16% organic growth ‘supported by structural tailwinds’ while recent acquisitions Windy City and Peerless excelled.
Life Sciences showed 6% organic growth thanks to market share gains across medtech markets, while the seals business was flat, which meant it outperformed its market, and the firm said there was ‘positive momentum in North America’ with improvement in the international business to come.
The firm also said the positive momentum of the first had continued across all three segments and it now expects organic revenue to rise 8% instead of 6% and an operating margin of 22% instead of 21% previously.
Chief executive Johnny Thomson said the results ‘demonstrate our sustainable quality compounding with excellent earnings growth at fantastic returns on capital’.
He added: ‘We have a differentiated business model with a well-diversified portfolio of high-quality businesses, allowing us to deliver compounding growth in good times and bad.’
