Diploma PLC on Tuesday reported nearly 60% profit growth in the first half of its current financial year and upgraded its full-year forecast.
Shares in Diploma were up 15% at 4,853.19 pence each in London on Tuesday morning.
The London-based supplier of specialised technical products and services said pretax profit in the six months that ended March 31 was £122.3 million, rising 57% from £77.8 million the year before.
Revenue grew 14% to £728.5 million from £638.3 million. This consisted of organic revenue growth of 9%, plus a 7% net contribution from acquisitions and disposals, minus a 2% adverse impact from foreign exchange movements.
Operating expenses for the six-month period increased 7.1% to £589.1 million from £550.3 million, while the company’s working capital increased by £37.7 million as a result of higher inventory.
Diploma declared an interim dividend of 18.2 pence per share, up 5.2% from 17.3p a year prior.
‘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,’ said Chief Executive Officer Johnny Thomson.
‘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.’
Diploma upgraded its guidance for full-year organic revenue growth to 8%, lifted from its prior 6% forecast. It guided for a full-year operating margin of around 22%, compared to the previous estimate of approximately 21%. The margin was 21.5% in the first half, improved from 19.6% a year before. Its net acquisition growth forecast remained unchanged at 2%.
Diploma’s financial year ends on September 30.
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