Diploma PLC (LONDPLM), the international group of businesses supplying specialised technical products and services, today issues a trading update for the six months ending 31 March 2019, ahead of entering its close period.
Group
Trading has remained robust with good underlying growth across all Sectors, particularly within Controls. Underlying revenues are expected to be up 5% on the prior period. Reported revenues are expected to be up 10% at constant exchange rates, including a 4% contribution from acquisitions, net of disposals.
Operating margin is expected to be in line with the comparable period last year.
Life Sciences
Underlying and reported revenues are expected to be up ca. 5% with good growth across most business areas, particularly in Canadian Surgical and Endoscopy and Australian Diagnostics.
Seals
Underlying revenues are expected to be up ca. 4%. North American Seals revenues showed solid underlying growth in the second quarter against a very strong comparative. This offset a weaker first quarter which, as previously announced, was impacted by initial delivery delays in Industrial OEM, following the new ERP implementation. International Seals has continued to deliver strong underlying growth.
Controls
Underlying revenues are expected to be up ca. 8% with strong growth from deeper penetration into the Aerospace market, supported by generally positive end markets. Good initial contribution from the recent acquisitions of FS Cables and Gremtek.
Financial position
The Group’s balance sheet remains strong. Working capital at 31 March 2019 will increase to ca. 17% of revenues reflecting increase in inventories to meet strategic priorities. Cash funds at 31 March 2019 will be ca. £18m.
Acquisitions
Encouraging acquisition pipeline, while opportunities remain competitive.
Johnny Thomson, who became Group CEO in February 2019, commented:
“Diploma’s performance in the first half has been robust. Despite the global macroeconomic uncertainties, the Group remains on track to deliver good growth and modest margin progression for the full year in line with expectations. As I continue to learn more about the Diploma businesses, I am encouraged by the quality and passion of the people, the constant commitment to add value to our customers and the exciting prospects for continued growth.”
The results for the six months ending 31 March 2019 will be released on 13 May 2019.
