Diploma PLC First Quarter Trading Update (3594M)
January 20 2016 - 2:00AM
UK Regulatory
TIDMDPLM
RNS Number : 3594M
Diploma PLC
20 January 2016
DIPLOMA PLC
12 CHARTERHOUSE SQUARE, LONDON EC1M 6AX
TELEPHONE: +44 (0)20 7549 5700
FACSIMILE: +44 (0)20 7549 5715
FOR IMMEDIATE RELEASE
20 January 2016
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 2016, ahead of the Company's AGM to be held today at
12.00, midday.
Trading Summary
Group revenues in the first quarter ended 31 December 2015
increased by 6% on a reported basis over the comparable period last
year. At constant exchange rates, Group revenues increased by 11%,
with acquisitions completed during the last twelve months
contributing 9% and underlying organic growth of 2%. However,
currency movements and in particular the further substantial
depreciation of the Canadian and Australian currencies against UK
sterling, reduced reported Group revenues by 5%.
In the Life Sciences Sector, revenues were 4% below the
comparable period last year reflecting the impact of currency
movements on translation of the results of the Healthcare
businesses. However, on an underlying basis revenues increased by
7% driven by stronger sales of capital equipment and good
performances in the Irish and Australian businesses. In the Seals
Sector, revenues increased by 22% (1% ahead on an underlying
basis), benefitting from the Kubo and Swan Seals businesses
acquired last year and from WCIS acquired at the beginning of this
financial year. In the Controls Sector, reported revenues were 3%
below last year (2% reduction on an underlying basis). The
Specialty Fastener business achieved good growth in the period as
anticipated, but the UK Interconnect and Fluid Controls businesses
continue to experience weak activity, particularly in general
Industrial markets.
The Group operating margin is in line with expectations, with
the substantial depreciation in the Canadian and Australian
currencies against the US dollar again negatively impacting margins
on a transactional basis in the Healthcare businesses (ca. 25% of
the Group's revenues). This currency impact, along with lower
initial margins in the acquired businesses, has as anticipated led
to a softer margin in the first quarter compared with that achieved
in the comparable period last year.
Financial Position
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. In the quarter
ended 31 December 2015 the Group generated strong free cash flow of
ca. GBP9m. As previously reported, on 12 October 2015 the Group
completed the acquisition of 100% of West Coast Industrial Seals
Pty Limited based in Australia and its affiliate based in New
Caledonia for maximum consideration of GBP9.8m, of which GBP8.5m
was initially paid on completion. Net cash funds at 31 December
2015 were GBP3.9m, compared with GBP3.0m reported at 30 September
2015.
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.
+44 (0)20 7549
Diploma PLC - 5700
Bruce Thompson, Chief Executive
Officer
Nigel Lingwood, Group Finance
Director
+44 (0)20 7353
Tulchan Communications - 4200
David Allchurch
Martin Robinson
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. 1,500 employees and its principal
operating businesses are located in the UK, Northern Europe, North
America and Australia.
Over the last five years, the Group has grown adjusted earnings
per share at an average of ca. 15% p.a. through a combination of
organic growth and acquisitions. Diploma is a member of the FTSE
250 with a market capitalisation of ca. GBP800m.
Further information on Diploma PLC, together with a copy of this
Announcement, is available at www.diplomaplc.com
This information is provided by RNS
The company news service from the London Stock Exchange
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