REG - Diploma PLC - Preliminary Results
19/11/2024 07:00
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RNS Number : 6947M Diploma PLC 19 November 2024
DIPLOMA PLC 10-11 CHARTERHOUSE SQUARE, LONDON EC1M 6EE
TELEPHONE: +44 (0)20 7549 5700
PRELIMINARY RESULTS FOR THE YEAR ENDED 30 SEPTEMBER 2024
Strong growth at great returns
FY 24 FY 23 Change
Revenue £1,363.4m £1,200.3m +14%
Organic revenue growth 6% 8%
Adjusted operating profit £285.0m £237.0m +20%
Adjusted operating margin 20.9% 19.7% +120bps
Statutory operating profit((1)) £207.4m £183.3m +13%
Free cash flow £197.9m £163.8m +21%
Free cash flow conversion 101% 100%
Adjusted earnings per share 145.8p 126.5p +15%
Basic earnings per share((1)) 96.5p 90.8p +6%
Leverage 1.3x 0.9x
Total dividend per share 59.3p 56.5p +5%
ROATCE 19.1% 18.1% +100bps
All alternative performance measures are defined in note 15 to the Condensed
Consolidated Financial Statements.
(1) Statutory operating profit and basic earnings per share in the prior year
include an exceptional gain on the disposal of Hawco of £12.2m.
● Strong, volume-led organic revenue growth of 6%.
● Reported revenue growth of 14%: 10% from acquisitions, partially offset by FX.
● Adjusted operating margin up 120 basis points to 20.9%, reflecting our
value-add proposition; operational leverage; disciplined cost management; and
accretive acquisitions.
● Highly effective capital allocation: £293m invested in seven quality
businesses at 6x EBIT. Disposal of three non-core business entities after the
year end for £45m at 7x EBIT.
● Excellent return on capital across the Group with ROATCE up 100 basis points
to 19.1%.
● Strong free cash flow conversion of 101% reflecting disciplined working
capital management.
● Positive outlook for FY25.
Commenting, Johnny Thomson, Diploma's Chief Executive said:
"Thanks to my brilliant colleagues for another excellent year. Whilst some
markets have been a little tougher this year, the quality of the team, our
businesses, and the diversified portfolio, have driven a strong performance.
"I am pleased with our organic growth, our margin progress, and the
acquisitions we've made. Our discipline has been equally important: delivering
great returns, cash flows, and selling some non-core businesses.
"It's been another great year to add to our long-term compounding track record
and, while it's a tougher environment, I'm feeling positive about the year
ahead, and our long term prospects."
Revenue diversification driving organic growth and increasing resilience
● Controls +10%: Driven by market share gains and structural tailwinds.
● Seals +1%: Resilient performance in challenging markets.
● Life Sciences +6%: Outperformance in stabilised markets.
Complementary acquisitions driving future organic growth at excellent returns
● Peerless acquired for £243m, performing very well.
● PAR Group acquired for £37m, adding scale to R&G's Seals & Gaskets
division.
● Five additional bolt-ons acquisitions for a total of £13m.
● Highly effective allocation of capital, acquisitions together delivering 20%
ROATCE in year one.
● Healthy M&A pipeline diversified by sector, size and geography. Strong
cash flow and balance sheet provides capacity to self-fund disciplined
acquisitive growth.
Scaling effectively for sustainable growth
● Continued focus on management development initiatives to sustain growth.
● Three new state-of-the-art facilities opened to support future growth in the
UK and Europe, making it 10 new facilities in the last five years.
● Continued improvements against our Delivering Value Responsibly targets.
● Further strengthened balance sheet: committed facilities of £880m with
maturities up to 2036.
FY25 guidance
● At constant currency, we expect: organic growth of ca. 6%; acquisitions
announced to date (net of disposals) to add ca. 2% to reported revenue; and an
operating margin of ca. 21%.
PRELIMINARY RESULTS FOR THE YEAR ENDED 30 SEPTEMBER 2024
Strong growth at great returns
FY 24 FY 23 Change
Revenue £1,363.4m £1,200.3m +14%
Organic revenue growth 6% 8%
Adjusted operating profit £285.0m £237.0m +20%
Adjusted operating margin 20.9% 19.7% +120bps
Statutory operating profit((1)) £207.4m £183.3m +13%
Free cash flow £197.9m £163.8m +21%
Free cash flow conversion 101% 100%
Adjusted earnings per share 145.8p 126.5p +15%
Basic earnings per share((1)) 96.5p 90.8p +6%
Leverage 1.3x 0.9x
Total dividend per share 59.3p 56.5p +5%
ROATCE 19.1% 18.1% +100bps
All alternative performance measures are defined in note 15 to the Condensed
Consolidated Financial Statements.
(1) Statutory operating profit and basic earnings per share in the prior year
include an exceptional gain on the disposal of Hawco of £12.2m.
● Strong, volume-led organic revenue growth of 6%.
● Reported revenue growth of 14%: 10% from acquisitions, partially offset by FX.
● Adjusted operating margin up 120 basis points to 20.9%, reflecting our
value-add proposition; operational leverage; disciplined cost management; and
accretive acquisitions.
● Highly effective capital allocation: £293m invested in seven quality
businesses at 6x EBIT. Disposal of three non-core business entities after the
year end for £45m at 7x EBIT.
● Excellent return on capital across the Group with ROATCE up 100 basis points
to 19.1%.
● Strong free cash flow conversion of 101% reflecting disciplined working
capital management.
● Positive outlook for FY25.
Commenting, Johnny Thomson, Diploma's Chief Executive said:
"Thanks to my brilliant colleagues for another excellent year. Whilst some
markets have been a little tougher this year, the quality of the team, our
businesses, and the diversified portfolio, have driven a strong performance.
"I am pleased with our organic growth, our margin progress, and the
acquisitions we've made. Our discipline has been equally important: delivering
great returns, cash flows, and selling some non-core businesses.
"It's been another great year to add to our long-term compounding track record
and, while it's a tougher environment, I'm feeling positive about the year
ahead, and our long term prospects."
Revenue diversification driving organic growth and increasing resilience
● Controls +10%: Driven by market share gains and structural tailwinds.
● Seals +1%: Resilient performance in challenging markets.
● Life Sciences +6%: Outperformance in stabilised markets.
Complementary acquisitions driving future organic growth at excellent returns
● Peerless acquired for £243m, performing very well.
● PAR Group acquired for £37m, adding scale to R&G's Seals & Gaskets
division.
● Five additional bolt-ons acquisitions for a total of £13m.
● Highly effective allocation of capital, acquisitions together delivering 20%
ROATCE in year one.
● Healthy M&A pipeline diversified by sector, size and geography. Strong
cash flow and balance sheet provides capacity to self-fund disciplined
acquisitive growth.
Scaling effectively for sustainable growth
● Continued focus on management development initiatives to sustain growth.
● Three new state-of-the-art facilities opened to support future growth in the
UK and Europe, making it 10 new facilities in the last five years.
● Continued improvements against our Delivering Value Responsibly targets.
● Further strengthened balance sheet: committed facilities of £880m with
maturities up to 2036.
FY25 guidance
● At constant currency, we expect: organic growth of ca. 6%; acquisitions
announced to date (net of disposals) to add ca. 2% to reported revenue; and an
operating margin of ca. 21%.
Preliminary results
Diploma's preliminary results for the year ended 30 September 2024 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/6947M_1-2024-11-18.pdf
(http://www.rns-pdf.londonstockexchange.com/rns/6947M_1-2024-11-18.pdf) and
the corporate website, www.diplomaplc.com (//www.diplomaplc.com) .
Dividends
For the financial year ended 30 September 2024 (FY24), the Board has
recommended a final dividend of 42.0p per share (2023: 40.0p), making the
proposed full year dividend 59.3p (2023: 56.5p), up 5%, in line with the
Board's dividend policy.
The final dividend for FY24 is subject to approval by shareholders at the
Annual General Meeting on 15 January 2025 and, if approved, will be paid on 31
January 2025 to shareholders on the register at 17 January 2025. Shares will
trade ex-dividend from 16 January 2025.
Notes:
1. Diploma PLC uses alternative performance measures as key financial
indicators to assess the underlying performance of the Group. These include
organic 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 is set out in note 15 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 for analysts and investors will be held at 09:00 GMT. This will
be streamed live via webcast and audio conference call.
Register your attendance for the webcast at: https://brrmedia.news/DPLM_FY_24
(https://brrmedia.news/DPLM_FY_24)
Conference call dial in details:
● Dial in: UK-Wide: +44 (0) 33 0551 0200 / UK Toll Free: 0808 109 0700
● Password: Diploma Full Year
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. 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. 3,600 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 - ambition with
discipline, and over the last fifteen years, the Group has grown adjusted
earnings per share (EPS) at an average of ca. 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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