REG - Diploma PLC - Half Year Results

DiplomaAnnouncement

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RNS Number : 8014E  Diploma PLC  19 May 2026

  10-11 CHARTERHOUSE SQUARE, LONDON EC1M 6EE

                        TELEPHONE: +44 (0)20 7549 5700

HALF YEAR RESULTS FOR THE SIX MONTHS ENDED 31 MARCH 2026
                                         19
 May 2026

Great H1. Further 6% FY26 upgrade.

 Very strong organic growth and further acquisitions.

                             H1 26     H1 25     Change
 Revenue                      £851.1m   £728.5m   +17%
 Organic revenue growth       15%       9%
 Adjusted operating profit    £208.9m   £156.9m   +33%
 Adjusted operating margin    24.5%     21.5%     +300bps
 Statutory operating profit   £165.1m   £139.4m
 Free cash flow               £110.7m   £83.8m
 Free cash flow conversion    76%       78%
 Adjusted earnings per share  109.2p    80.2p     +36%
 Basic earnings per share     74.7p     71.5p
 Leverage                     0.8x      1.1x
 Interim dividend per share   19.1p     18.2p     +5%
 ROATCE                       22.7%     19.1%     +360bps

 

●    Organic revenue growth of 15%: building on five-year average of 10% p.a.
 ●    Operating margin of 24.5%, up 300 basis points: differentiated value-add model
    and strong execution
 ●    EPS(1) growth of 36%: building on long-term track record of ambitious earnings
    growth
 ●    Returns of 22.7%, up 360 basis points: demonstrating our disciplined approach
 ●    Acquisitions accelerate our growth: significant investment and healthy
    pipeline
    ○                                         15 deals in LTM (2) for c.£310m at average 8x multiple
    ○                                         7 deals since Q1 update for c.£180m at average 9x multiple, including CDM, a
                         c.$80m revenue US interconnect business into defence (subject to regulatory
                         approval)
 ●    Financial firepower: strong cash generation, significant balance sheet
    headroom
 ●    Attractive end markets driving structural growth. Quality and diversity of
    portfolio and resilient business model underpin confidence despite uncertain
    environment
 ●    Positive momentum into H2. Another year of Sustainable Quality Compounding

 

 Further upgrade to FY26 guidance (at constant currency):

●    Organic revenue growth of 12% - up from 9%
 ●    Acquisitions announced to date add 6% to reported growth - up from 3%
 ●    Operating margin of c.25% - unchanged

Operating profit(1) growth of over 30%, representing a 6% upgrade to
 consensus(3)

Commenting, Johnny Thomson, Diploma's Chief Executive said:

 "It's been a great first half. Thank you to my brilliant colleagues who work
 hard to deliver for our customers and drive our growth.

 "The strong first half performance demonstrates how we balance ambitious
 earnings growth with disciplined returns - in good times and bad - to build on
 our long track record of sustainable quality compounding.  We have strong
 positions in attractive, structurally growing markets, our acquisition
 pipeline is healthy, and our team is in great shape.

 "The second half has started well and, despite the uncertain environment,
 we're confident in our upgraded full year guidance."

 Sector performance

●    Controls +26% organic growth: Excellent execution in favourable market
    conditions. Attractive end market exposures including aerospace, defence,
    datacentres, and energy. Double-digit growth in IS Group, Clarendon, and Windy
    City Wire, and continued outstanding performance from Peerless.
 ●    Seals +2% organic growth: North American Seals progressing well. Strong growth
    in infrastructure and exciting developments in nuclear power generation.
    International Seals remained challenging in H1 but outlook is improving.
 ●    Life Sciences +4% organic growth: Consistent performance in a tough healthcare
    market. Focus on business development in medtech and in vitro diagnostic (IVD)
    markets.

 Half year results

Diploma's half year results for the six months ended 31 March 2026 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/8014E_1-2026-5-18.pdf
 (http://www.rns-pdf.londonstockexchange.com/rns/8014E_1-2026-5-18.pdf) and the
 corporate website: www.diplomaplc.com.

 Dividends

 For the half year ended 31 March 2026, the Directors have declared an interim
 dividend of 19.1p per share (H1 25: 18.2p) which will be paid on 12 June 2026
 to shareholders on the register on 29 May 2026. Shares will trade ex-dividend
 from 28 May 2026.

HALF YEAR RESULTS FOR THE SIX MONTHS ENDED 31 MARCH 2026
                                        19
May 2026

Great H1. Further 6% FY26 upgrade.

Very strong organic growth and further acquisitions.

 

                              H1 26     H1 25     Change
 Revenue                      £851.1m   £728.5m   +17%
 Organic revenue growth       15%       9%
 Adjusted operating profit    £208.9m   £156.9m   +33%
 Adjusted operating margin    24.5%     21.5%     +300bps
 Statutory operating profit   £165.1m   £139.4m
 Free cash flow               £110.7m   £83.8m
 Free cash flow conversion    76%       78%
 Adjusted earnings per share  109.2p    80.2p     +36%
 Basic earnings per share     74.7p     71.5p
 Leverage                     0.8x      1.1x
 Interim dividend per share   19.1p     18.2p     +5%
 ROATCE                       22.7%     19.1%     +360bps

 

 

 ●    Organic revenue growth of 15%: building on five-year average of 10% p.a.
 ●    Operating margin of 24.5%, up 300 basis points: differentiated value-add model
      and strong execution
 ●    EPS(1) growth of 36%: building on long-term track record of ambitious earnings
      growth
 ●    Returns of 22.7%, up 360 basis points: demonstrating our disciplined approach
 ●    Acquisitions accelerate our growth: significant investment and healthy
      pipeline
      ○                                         15 deals in LTM (2) for c.£310m at average 8x multiple
      ○                                         7 deals since Q1 update for c.£180m at average 9x multiple, including CDM, a
                                                c.$80m revenue US interconnect business into defence (subject to regulatory
                                                approval)
 ●    Financial firepower: strong cash generation, significant balance sheet
      headroom
 ●    Attractive end markets driving structural growth. Quality and diversity of
      portfolio and resilient business model underpin confidence despite uncertain
      environment
 ●    Positive momentum into H2. Another year of Sustainable Quality Compounding

 

Further upgrade to FY26 guidance (at constant currency):

 ●    Organic revenue growth of 12% - up from 9%
 ●    Acquisitions announced to date add 6% to reported growth - up from 3%
 ●    Operating margin of c.25% - unchanged

Operating profit(1) growth of over 30%, representing a 6% upgrade to
consensus(3)

Commenting, Johnny Thomson, Diploma's Chief Executive said:

"It's been a great first half. Thank you to my brilliant colleagues who work
hard to deliver for our customers and drive our growth.

"The strong first half performance demonstrates how we balance ambitious
earnings growth with disciplined returns - in good times and bad - to build on
our long track record of sustainable quality compounding.  We have strong
positions in attractive, structurally growing markets, our acquisition
pipeline is healthy, and our team is in great shape.

 

"The second half has started well and, despite the uncertain environment,
we're confident in our upgraded full year guidance."

 

Sector performance

 ●    Controls +26% organic growth: Excellent execution in favourable market
      conditions. Attractive end market exposures including aerospace, defence,
      datacentres, and energy. Double-digit growth in IS Group, Clarendon, and Windy
      City Wire, and continued outstanding performance from Peerless.
 ●    Seals +2% organic growth: North American Seals progressing well. Strong growth
      in infrastructure and exciting developments in nuclear power generation.
      International Seals remained challenging in H1 but outlook is improving.
 ●    Life Sciences +4% organic growth: Consistent performance in a tough healthcare
      market. Focus on business development in medtech and in vitro diagnostic (IVD)
      markets.

 

Half year results

Diploma's half year results for the six months ended 31 March 2026 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/8014E_1-2026-5-18.pdf
(http://www.rns-pdf.londonstockexchange.com/rns/8014E_1-2026-5-18.pdf) and the
corporate website: www.diplomaplc.com.

 

 

Dividends

For the half year ended 31 March 2026, the Directors have declared an interim
dividend of 19.1p per share (H1 25: 18.2p) which will be paid on 12 June 2026
to shareholders on the register on 29 May 2026. Shares will trade ex-dividend
from 28 May 2026.

 

 

Notes:

 

(1) Unless otherwise stated, references to earnings per share (EPS), operating
profit, and operating margin throughout this document refer to adjusted
measures (as set out in note 13 to the Condensed Consolidated Financial
Statements in this Announcement).

( )

(2) Unless otherwise stated, references throughout this report to 15 deals in
the last twelve months (LTM) includes: 4 acquisitions completed in Q4 25; 6
acquisitions completed in H1 26; 4 acquisitions completed in Q3 26 (following
the period end date); and 1 acquisition for which completion is subject to
regulatory approval.

 

(3) Analyst consensus adjusted operating profit for FY26 is £428m as at 18
May 2026.

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
Return on adjusted trading capital employed (ROATCE). Definitions of these
metrics are set out in note 13 to the Condensed Consolidated Financial
Statements in this Announcement.

 

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
(UK time) via audio conference call and webcast. Register your attendance for
the webcast at: https://brrmedia.news/DPLM_HY_26
(https://brrmedia.news/DPLM_HY_26)

 

Conference call dial in details:

 ●    Dial in: UK-Wide: +44 (0) 33 0551 0200 / UK Toll Free: 0808 109 0700
 ●    Password: Diploma HY

 

 

A recording of the presentation will be available after the event on our
website: https://www.diplomaplc.com/investors
(https://www.diplomaplc.com/investors)

 

 

 For further information please contact:

 Diploma PLC -                             +44 (0)20 7549 5700
 Johnny Thomson, Chief Executive Officer
 Wilson Ng, 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 solutions group, providing critical products and
services to customers across a wide range of markets.

 

We employ c.3,400 colleagues across the Group. Our businesses primarily
operate across the US, Canada, the UK, Europe and Australia.

 

Diploma delivers sustainable quality compounding. Over the last five years,
the Group has grown adjusted earnings per share (EPS) at an average of c.26%
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 Anna Lawrence, Group
General Counsel & Company Secretary.

 

LEI: 2138008OGI7VYG8FGR19

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