Diploma PLC Trading Statement (0469C)
January 17 2018 - 1:00AM
UK Regulatory
TIDMDPLM
RNS Number : 0469C
Diploma PLC
17 January 2018
DIPLOMA PLC
12 CHARTERHOUSE SQUARE, LONDON EC1M 6AX
TELEPHONE: +44 (0)20 7549 5700
FACSIMILE: +44 (0)20 7549 5715
FOR IMMEDIATE RELEASE
17 January 2018
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 2018, ahead of the Company's AGM to be held today at
12.00, midday.
Trading Summary
The Group has made a good start to the year with overall trading
in line with expectations. Reported Group revenues in the first
quarter ended 31 December 2017 increased by 10% over the comparable
period last year. At constant exchange rates, Group revenues
increased by 14%, with acquisitions completed during the last
twelve months contributing 6% and underlying growth of 8%. The
general strengthening of UK Sterling in the second half of 2017
against all major currencies except the Euro, has provided an
overall headwind of 4% to reported Group revenues.
In the Life Sciences Sector, reported revenues were up 20%, with
a strong contribution from Abacus dx, the Australian diagnostic
business acquired in April last year. On an underlying basis,
revenues were up 10% reflecting much stronger capital sales, having
secured last year a new endoscope product line and against a weak
comparative. In the Seals Sector, reported revenues increased by 6%
(up 9% on an underlying basis) principally driven by strong trading
activity across the North American businesses. In International
Seals, revenues were unchanged from last year with stronger trading
in the European businesses being offset by weaker performances in
Russia and Australia. In the Controls Sector, reported revenues
were up 7% (up 5% on an underlying basis) against a very strong
comparative last year. All the Controls businesses benefitted from
stronger European markets.
The Group's operating margin remains in line with expectations
and slightly ahead of the comparable period last year. 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. Cash funds at 31 December 2017
were GBP21.9m.
CEO Succession
The process to identify a CEO successor is making good progress
and an announcement will be made in due course.
Impact of US Tax Legislation
Diploma PLC notes the enactment of the Tax Cuts and Jobs Act in
the United States on 22 December 2017 which will reduce the
statutory rate of US Federal corporate income tax to 21%, effective
from 1 January 2018. While the full implications of this new US tax
legislation on the Group are still being reviewed, Diploma PLC
estimates that the Group's adjusted effective tax rate for the year
ending 30 September 2018 will reduce to ca. 24% from 26.5% reported
at 30 September 2017. There will be no material one-off charges or
credits as a result of the change in tax rate.
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.
2. A copy of this Statement, together with further information
about Diploma PLC, may be viewed on its website at
www.diplomaplc.com
+44 (0)20 7549
Diploma PLC - 5700
Bruce Thompson, Chief Executive
Officer
Nigel Lingwood, Group Finance
Director
+44 (0)20 7353
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. GBP1.3bn.
Further information on Diploma PLC can be found at
www.diplomaplc.com
LEI: 213800OG17VYG8FGR19
This information is provided by RNS
The company news service from the London Stock Exchange
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