Diploma PLC Trading Statement (0518Z)

TIDMDPLM

RNS Number : 0518Z

Diploma PLC

29 August 2018

DIPLOMA PLC

12 CHARTERHOUSE SQUARE, LONDON EC1M 6AX

TELEPHONE: [phone]

FACSIMILE: [phone]

FOR IMMEDIATE RELEASE

29 August 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 year 
                      ending 30 September 2018. 
 
                           Trading Summary 
          The Group has continued to trade robustly in the 
           second half of the year and remains on track to 
            report results for the full year in line with 
                            expectations. 
 
           Reported Group revenues for the year ending 30 
           September 2018 are expected to increase by ca. 
        7%. The headwind from the appreciation of UK sterling 
          against the previous year has eased in the second 
           half and is expected to impact revenues by ca. 
           3%. The acquisitions completed during the last 
           eighteen months are expected to contribute ca. 
            3%, net of a small disposal. On an underlying 
        basis, after adjusting for the impact of acquisitions 
          and currency effects, Group revenues for the year 
                 are expected to increase by ca. 7%. 
 
           In the Life Sciences Sector, reported revenues 
          are expected to be ca. 6% 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 increase ca. 
            4% reflecting the benefit of good growth from 
        the introduction of a new supplier in the Healthcare 
          business and despite some capital project delays. 
        In the Seals Sector, reported revenues have continued 
          to benefit from strong trading conditions in both 
        North America and Europe and are expected to increase 
         by ca. 6% (up 9% on an underlying basis). In North 
        America underlying revenues are expected to increase 
            by ca. 11% although this rate of growth eases 
          against a strong comparative in the final quarter 
           of the financial year. In International Seals, 
            underlying revenues have strengthened further 
           in the second half of the year and are expected 
        to grow by ca. 6% with strong trading in the European 
         businesses supported by improved trading in Russia 
           and Australia. In the Controls Sector, reported 
           revenues are expected to increase by ca. 7% (up 
       4% on an underlying basis) against a strong comparative 
         last year and reflecting generally positive trading 
              conditions in its major European markets. 
 
          The Group's operating margin remains in line with 
          expectations and is likely to be similar to that 
               reported in the first half of the year. 
 
                            Acquisitions 
            As announced on 22 August 2018, the Group has 
           acquired FS Cables, a UK supplier of specialist 
          cable products, for an initial cash consideration 
       of GBP17.0m. The pipeline of acquisition opportunities 
           remains healthy. The Group has a robust balance 
           sheet and a proven track record of strong cash 
          generation which the Group continues to reinvest 
          in acquiring new businesses to accelerate growth. 
 
          At 30 September 2018, the Group's net cash funds 
         are expected to be ca. GBP30m and the Group retains 
            access to a GBP60m revolving credit facility. 
 
           In June 2018, the North American Seals business 
           disposed of its engine and transmission gasket 
            business for net asset value of ca. GBP4.5m. 
 
        The Group's results for the year ending 30 September 
            2018 will be announced on Monday, 19 November 
                                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, together with further 
           information about Diploma PLC, may be viewed on 
                  its website at www.diplomaplc.com 
 
                                            [phone] 
                Diploma PLC -                    5700 
                    Nigel Lingwood, Group Finance 
                               Director 
 
                                            [phone] 
                Tulchan Communications -         4200 
                           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. GBP1.5bn.

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

LEI: 2138008OG17VYG8FGR19

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August 29, 2018 02:00 ET (06:00 GMT)