TIDMDPLM
RNS Number : 8549F
Diploma PLC
13 July 2023
13 July 2023
Diploma PLC
DIPLOMA DELIVERS: CONTINUED STRONG PERFORMANCE
Diploma PLC, the value-add distribution group, today issues a
trading update for the nine months ended 30 June 2023.
Strong year to date performance
Performance in the first nine months has been strong, in-line
with our expectations. We continue to drive organic growth by
positioning behind structurally growing end markets, penetrating
further in core developed geographies, and extending our product
range to expand addressable markets.
During the first nine months of FY 2023:
-- Organic revenue growth 9%: broad-based, volume-led growth
across the Group. Strong growth at Controls; Seals continues to
perform well; and Life Sciences has sustained the positive momentum
of H1.
-- Strategic acquisitions: the Group has separately announced today the acquisition of DICSA, a market-leading distributor of fluid power solutions into the European Seals aftermarket for c.GBP170m. TIE, which we acquired in March for GBP76m to enter the US Industrial Automation end market, is performing well.
-- Eight bolt-on acquisitions: for a total consideration of
GBP26m, of which two have completed since H1, all at attractive
valuations.
-- Reported revenue growth 21%: net contribution of 8% from
acquisitions and disposals, and a 4% foreign exchange benefit.
-- Strong operating margin : in-line with our expectations and
demonstrating the power of our resilient, value-added model which
drives customer loyalty and pricing power
Confidence in full year outlook
The first nine months of FY 2023 have increased our confidence
in our full year guidance of ca.7% organic revenue growth; ca.7%
contribution to revenue from acquisitions net of disposals;
operating margin ca.19%; and free cash flow conversion of
ca.90%.
The acquisition of DICSA will be immediately accretive, adding
ca.5% to EPS growth during the first full year of ownership. Our
acquisition pipeline is active and we remain disciplined. We expect
year end leverage of ca.1.0x following the acquisition of DICSA and
before any future acquisition investment. We expect Group ROATCE to
remain strong, at around 18%.
Our next scheduled update will be the publication of full year
results on 20 November.
Johnny Thomson, Chief Executive Officer, and Chris Davies, Chief
Financial Officer, will host a conference call for analysts and
investors this morning at 8:00am (UK time). Conference call dial in
details:
-- Number: +44 (0) 33 0551 0200
-- Password: Diploma
For further information please contact:
Diploma PLC +44 (0)20 7549 5700
Johnny Thomson, Chief Executive
Officer
Chris Davies, Chief Financial
Officer
Kellie McAvoy, Head of Investor
Relations
Teneo +44 (0)20 7353 4200
Martin Robinson
Olivia Peters
NOTE TO EDITORS:
Diploma PLC is a decentralised, value-add distribution Group.
Our businesses deliver practical and innovative solutions that keep
key industries moving - from energy and infrastructure to
healthcare.
We are a distribution group with a difference. Our businesses
have the technical expertise, specialist knowledge, and long-term
relationships required to deliver value-add products and services
that make our customers' lives easier. These value-add solutions
drive customer loyalty, market share growth and strong margins.
Our decentralised model means our specialist businesses are
agile and empowered to deliver the right solutions for their
customers, in their own way. As part of Diploma, our businesses can
also leverage the additional resources, opportunities and expertise
of a large, international and diversified Group to benefit their
customers, colleagues, suppliers and communities.
We employ ca.3,000 colleagues across our three Sectors of
Controls, Seals and Life Sciences. Our principal operating
businesses are located in the UK, Northern Europe, North America
and Australia.
Over the last fifteen years, the Group has grown adjusted
earnings per share (EPS) at an average of c.15% p.a. through a
combination of organic growth and acquisitions. Diploma is a member
of the FTSE 250 with a market capitalisation of c.GBP4.1bn.
Further information on Diploma PLC can be found at
www.diplomaplc.com
The person responsible for releasing this Announcement is John
Morrison, Company Secretary.
LEI: 2138008OGI7VYG8FGR19
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END
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