Diploma Plc (LON:DPLM), today announced preliminary final results for the year ended 30 September 2018.
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Audited 2018 |
Audited 2017 |
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£m |
£m
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Revenue |
485.1 |
451.9 |
+7% |
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Adjusted operating profit(1) |
84.9 |
78.2 |
+9% |
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Adjusted operating margin(1) |
17.5% |
17.3% |
+20bps |
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Adjusted profit before tax(1),(2) |
84.8 |
77.5 |
+9% |
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Statutory operating profit |
73.2 |
68.5 |
+7% |
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Statutory profit before tax |
72.7 |
66.8 |
+9% |
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Statutory profit for the year |
54.4 |
48.2 |
+13% |
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Free cash flow(3) |
60.5 |
55.7 |
+9% |
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Pence |
Pence |
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Adjusted earnings per share(1),(2) |
56.4 |
49.8 |
+13% |
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Basic earnings per share |
47.5 |
42.0 |
+13% |
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Total dividend per share |
25.5 |
23.0 |
+11% |
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(1) Before acquisition related charges and Chief Executive Officer transition costs (2) Before fair value remeasurements (3) Before cash payments on acquisitions and dividends |
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Financial Highlights
· Revenue and adjusted operating profit increased by 7% and 9%, respectively.
· Underlying revenues increased by 7%; 3% increase in revenues from businesses acquired (net of a small disposal), offset by 3% currency headwind.
· Adjusted operating margins improved by 20bps to 17.5%, reflecting benefit of operational leverage from growth in revenues.
· Adjusted profit before tax increased by 9% to £84.8m; adjusted EPS increased by 13% to 56.4p, reflecting benefit from a reduction in US Federal corporate income tax rate.
· Robust free cash flow of £60.5m, including £4.0m realised on sale of business; strong balance sheet with cash funds of £36.0m at end of September.
· Total dividend increased by 11% to 25.5p per share reflecting strong financial position and confidence in Group’s prospects.
Operational Highlights
· In Life Sciences underlying revenues increased by 5%. Healthcare businesses benefited from strong consumable revenues and new premium Surgical and Endoscopy products; Environmental businesses had a mixed year, with stronger revenues in Germany offset by reduced UK revenues.
· In Seals, underlying revenues increased by 10%. Aftermarket and Industrial OEM businesses in North America benefited from buoyant US industrial economy; International Seals businesses reported solid growth in second half of year led by a good performance in Europe.
· In Controls, underlying revenues increased by 5%. The Interconnect and Specialty Fasteners businesses increased revenues helped by stronger industrial markets and success in broadening their customer base; weaker revenues in Fluid Controls were principally due to the absence of a large one-off project.
· Acquisition expenditure was £20.4m with £16.9m invested in the acquisition of FS Cables, taking the Group’s expenditure on value-enhancing businesses over the past five years to ca. £128m; the Group’s return on adjusted trading capital (“ROATCE”) has improved to 24.5%, comfortably exceeding our 20% target.
Commenting on the results for the year, John Nicholas, Diploma’s Executive Chairman said:
“Diploma’s trading performance in 2018 was, once again, very strong. The Group delivered another year of double-digit growth in adjusted earnings per share and generated free cash flow of over £60m. The results demonstrate the resilience of the Group’s businesses and the consistent delivery against the Group’s strategy which has delivered compound double-digit growth in adjusted earnings per share over the past 10 years.
Despite the global macro-economic uncertainty, the Board remains confident that the Group will continue to make further progress in the coming year from a combination of steady “GDP plus” underlying growth and from the Group’s proven and value-enhancing acquisition programme.”
