Diploma PLC (LON: DPLM), the international group supplying specialised products and services, has today issued its first quarter trading update in respect of the year ending 30 September 2020, ahead of the Company’s AGM to be held today at 12.00, midday.
The Group has made a positive start to the year with overall trading in line with expectations. Reported Group revenues in the first quarter ended 31 December 2019 increased by 9% over the comparable period. At constant exchange rates, Group revenues increased by 11%, with acquisitions completed last year contributing 9% and underlying growth of 2%. The Group’s operating margin in the first quarter remained in line with expectations.
Life Sciences Sector revenues on a reported and underlying basis were up 2% and 3% respectively, with revenues being held back by the timing of product delivered to customers. We expect that these revenues will be recovered in the second fiscal quarter. Seals Sector reported revenues were up 18%, which included a strong contribution from businesses acquired last year, in particular VSP Technologies. Underlying revenues were marginally ahead of the comparable period reflecting challenging industrial markets in both North America and Europe. Controls Sector revenues on a reported and underlying basis were up 3% and 4% respectively and included another strong contribution from Clarendon Specialty Fasteners.
Diploma plc invested a further ca. £14m in acquiring two businesses since the previous year end comprising CR System Components, a Fastener business, based in Germany and PumpNSeal, a Seals business, based in Australia. The pipeline of acquisition opportunities remains healthy and the Group’s balance sheet continues to benefit from strong cash generation.
Our expectations for the full year remain positive and unchanged.
- 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.
- Diploma PLC uses alternative performance measures as key financial indicators to assess the underlying performance of the Group. All references in this Statement to “underlying” revenues refer to reported results on a constant currency basis and before any contribution from acquired or disposed businesses.