REG - Diploma PLC - Half-year Report
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RNS Number : 2732J Diploma PLC 20 May 2025
10-11 CHARTERHOUSE SQUARE, LONDON EC1M 6EE
TELEPHONE: +44 (0)20 7549 5700
20 May 2025
HALF YEAR RESULTS FOR THE SIX MONTHS ENDED 31 MARCH 2025
Strong H1 performance. FY upgrade.
H1 25 H1 24 Change
Revenue £728.5m £638.3m +14%
Organic revenue growth 9% 5%
Adjusted operating profit £156.9m £125.4m +25%
Adjusted operating margin 21.5% 19.6% +190bps
Statutory operating profit £139.4m £88.0m
Free cash flow £83.8m £66.3m
Free cash flow conversion 78% 76%
Adjusted earnings per share 80.2p 65.1p +23%
Basic earnings per share 71.5p 43.1p
Leverage 1.1x 0.9x
Interim dividend per share 18.2p 17.3p +5%
ROATCE(1) 19.1% 18.0% +110bps
All alternative performance measures are defined in note 13 to the Condensed
Consolidated Financial Statements.
(1) Return on adjusted trading capital employed as defined in note 13.
● Very strong organic revenue growth of 9%.
● Reported revenue growth of 14%: 7% net acquisitions, -2% FX.
● Adjusted operating margin up 190 basis points to 21.5%: accretive
acquisitions, operational leverage and cost discipline.
● Adjusted earnings per share growth of 23%: continuing long-term track record.
● Discipline: return on capital of 19.1%, up 110 basis points. Strong balance
sheet and cash conversion.
● Healthy acquisition pipeline: executed with discipline.
● Diversified portfolio and differentiated business model: underpinning our
confidence despite uncertain environment. Limited impact of tariffs reflecting
local supply chains.
● Positive momentum into second half across all three Sectors.
● Upgrading FY25 guidance: organic revenue growth of 8% (from 6%) and operating
margin of c.22% (from c.21%).
Commenting, Johnny Thomson, Diploma's Chief Executive said:
"Thank you to my brilliant colleagues for their passion and hard work, and for
delivering a successful first half for Diploma.
"The results are very strong. They demonstrate our sustainable quality
compounding with excellent earnings growth at fantastic returns on capital. We
have a differentiated business model with a well-diversified portfolio of
high-quality businesses, allowing us to deliver compounding growth in good
times and bad.
"Despite the uncertain environment I feel confident in our ability to deliver
on our upgraded guidance this year. And I'm really excited about our
longer-term prospects too."
Sector performance
● Controls +16% organic growth: Strong execution supported by structural
tailwinds. Double- digit growth in Windy City Wire and continued
outperformance from Peerless, exceeding 20% return on capital in year one.
● Seals 0% organic growth: Resilient performance in challenging markets.
Positive momentum in North America with improvement in International Seals
still to come. Well positioned for future growth.
● Life Sciences +6% organic growth: Strong growth driven by share gains across
medtech and in vitro diagnostic (IVD) markets.
Half year results
Diploma's half year results for the six months ended 31 March 2025 have been
submitted in full unedited text to the Financial Conduct Authority's National
Storage Mechanism and will be available shortly for inspection at National
Storage Mechanism | FCA
(https://data.fca.org.uk/#/nsm/nationalstoragemechanism) . The results are
also available at
http://www.rns-pdf.londonstockexchange.com/rns/2732J_1-2025-5-19.pdf
(http://www.rns-pdf.londonstockexchange.com/rns/2732J_1-2025-5-19.pdf) and
the corporate website: www.diplomaplc.com.
Dividends
For the half year ended 31 March 2025, the Directors have declared an interim
dividend of 18.2p per share (2024:17.3p) which will be paid on 13 June 2025 to
shareholders on the register on 30 May 2025. Shares will trade ex-dividend
from 29 May 2025.
20 May 2025
HALF YEAR RESULTS FOR THE SIX MONTHS ENDED 31 MARCH 2025
Strong H1 performance. FY upgrade.
H1 25 H1 24 Change
Revenue £728.5m £638.3m +14%
Organic revenue growth 9% 5%
Adjusted operating profit £156.9m £125.4m +25%
Adjusted operating margin 21.5% 19.6% +190bps
Statutory operating profit £139.4m £88.0m
Free cash flow £83.8m £66.3m
Free cash flow conversion 78% 76%
Adjusted earnings per share 80.2p 65.1p +23%
Basic earnings per share 71.5p 43.1p
Leverage 1.1x 0.9x
Interim dividend per share 18.2p 17.3p +5%
ROATCE(1) 19.1% 18.0% +110bps
All alternative performance measures are defined in note 13 to the Condensed
Consolidated Financial Statements.
(1) Return on adjusted trading capital employed as defined in note 13.
● Very strong organic revenue growth of 9%.
● Reported revenue growth of 14%: 7% net acquisitions, -2% FX.
● Adjusted operating margin up 190 basis points to 21.5%: accretive
acquisitions, operational leverage and cost discipline.
● Adjusted earnings per share growth of 23%: continuing long-term track record.
● Discipline: return on capital of 19.1%, up 110 basis points. Strong balance
sheet and cash conversion.
● Healthy acquisition pipeline: executed with discipline.
● Diversified portfolio and differentiated business model: underpinning our
confidence despite uncertain environment. Limited impact of tariffs reflecting
local supply chains.
● Positive momentum into second half across all three Sectors.
● Upgrading FY25 guidance: organic revenue growth of 8% (from 6%) and operating
margin of c.22% (from c.21%).
Commenting, Johnny Thomson, Diploma's Chief Executive said:
"Thank you to my brilliant colleagues for their passion and hard work, and for
delivering a successful first half for Diploma.
"The results are very strong. They demonstrate our sustainable quality
compounding with excellent earnings growth at fantastic returns on capital. We
have a differentiated business model with a well-diversified portfolio of
high-quality businesses, allowing us to deliver compounding growth in good
times and bad.
"Despite the uncertain environment I feel confident in our ability to deliver
on our upgraded guidance this year. And I'm really excited about our
longer-term prospects too."
Sector performance
● Controls +16% organic growth: Strong execution supported by structural
tailwinds. Double- digit growth in Windy City Wire and continued
outperformance from Peerless, exceeding 20% return on capital in year one.
● Seals 0% organic growth: Resilient performance in challenging markets.
Positive momentum in North America with improvement in International Seals
still to come. Well positioned for future growth.
● Life Sciences +6% organic growth: Strong growth driven by share gains across
medtech and in vitro diagnostic (IVD) markets.
Half year results
Diploma's half year results for the six months ended 31 March 2025 have been
submitted in full unedited text to the Financial Conduct Authority's National
Storage Mechanism and will be available shortly for inspection at National
Storage Mechanism | FCA
(https://data.fca.org.uk/#/nsm/nationalstoragemechanism) . The results are
also available at
http://www.rns-pdf.londonstockexchange.com/rns/2732J_1-2025-5-19.pdf
(http://www.rns-pdf.londonstockexchange.com/rns/2732J_1-2025-5-19.pdf) and
the corporate website: www.diplomaplc.com.
Dividends
For the half year ended 31 March 2025, the Directors have declared an interim
dividend of 18.2p per share (2024:17.3p) which will be paid on 13 June 2025 to
shareholders on the register on 30 May 2025. Shares will trade ex-dividend
from 29 May 2025.
Notes:
1. Diploma PLC uses alternative performance measures as key financial
indicators to assess the underlying performance of the Group. These include
organic revenue growth, adjusted operating profit/adjusted operating margin,
adjusted earnings per share, free cash flow/free cash flow conversion,
leverage and ROATCE. Definitions of these metrics are set out in note 13 to
the Condensed Consolidated Financial Statements in this Announcement.
2. Certain statements contained in this Announcement constitute
forward-looking statements. Such forward-looking statements involve risks,
uncertainties and other factors which may cause the actual results,
performance or achievements of Diploma PLC, or industry results, to be
materially different from any future results, performance or achievements
expressed or implied by such statements. Such risks, uncertainties and other
factors include, among others, exchange rates, general economic conditions and
the business environment.
A presentation of the results to analysts and investors will be held at 09:00
GMT via audio conference call and webcast. Register your attendance for the
webcast at: https://brrmedia.news/DPLM_HY_25
(https://brrmedia.news/DPLM_HY_25)
Conference call dial in details:
● Dial in: UK-Wide: +44 (0) 33 0551 0200 / UK Toll Free: 0808 109 0700
● Password: Diploma HY25
A recording of the presentation will be available after the event on our
website: https://www.diplomaplc.com/investors/financial-presentations/
(https://www.diplomaplc.com/investors/financial-presentations/)
For further information please contact:
Diploma PLC - +44 (0)20 7549 5700
Johnny Thomson, Chief Executive Officer
Chris Davies, Chief Financial Officer
Holly Gillis, Head of Investor Relations
Teneo - +44 (0)20 7353 4200
Martin Robinson
Camilla Cunningham
NOTE TO EDITORS:
Diploma PLC is a value-add distribution Group. Our businesses deliver
practical and innovative solutions that keep key industries moving.
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 and their outcomes better. 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 c.3,300 colleagues across our three Sectors of Controls, Seals and
Life Sciences. Our principal operating businesses are located in North
America, the UK, Europe, and Australia.
Diploma aims to deliver sustainable quality compounding, and over the last
fifteen years, the Group has grown adjusted earnings per share (EPS) at an
average of c.16% p.a. through a combination of organic growth and
acquisitions.
Diploma is a member of the FTSE 100.
Further information on Diploma PLC can be found at www.diplomaplc.com
(http://www.diplomaplc.com)
The person responsible for releasing this Announcement is John Morrison,
Company Secretary.
LEI: 2138008OGI7VYG8FGR19
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