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DIPLOMA PLC
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10-11 CHARTERHOUSE SQUARE, LONDON EC1M
6EE
TELEPHONE: +44
(0)20 7549 5700
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PRELIMINARY RESULTS FOR THE YEAR ENDED 30 SEPTEMBER
2024
Strong growth at great
returns
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FY 24
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FY 23
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Change
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Revenue
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£1,363.4m
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£1,200.3m
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+14%
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Organic revenue growth
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6%
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8%
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Adjusted operating profit
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£285.0m
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£237.0m
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+20%
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Adjusted operating margin
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20.9%
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19.7%
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+120bps
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Statutory operating
profit(1)
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£207.4m
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£183.3m
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+13%
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Free cash flow
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£197.9m
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£163.8m
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+21%
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Free cash flow conversion
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101%
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100%
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Adjusted earnings per share
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145.8p
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126.5p
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+15%
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Basic earnings per share(1)
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96.5p
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90.8p
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+6%
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Leverage
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1.3x
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0.9x
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Total dividend per share
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59.3p
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56.5p
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+5%
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ROATCE
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19.1%
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18.1%
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+100bps
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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.
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Strong, volume-led organic revenue growth of
6%.
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Reported revenue growth of 14%: 10% from acquisitions, partially offset by FX.
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Adjusted operating margin up 120 basis points to
20.9%, reflecting our value-add
proposition; operational leverage; disciplined cost management; and
accretive acquisitions.
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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.
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Excellent return on capital across the Group with ROATCE up 100 basis points to
19.1%.
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Strong free cash flow conversion of 101% reflecting disciplined working capital
management.
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Positive outlook for
FY25.
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Commenting, Johnny Thomson, Diploma's Chief Executive
said:
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"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."
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Revenue diversification driving organic growth and increasing
resilience
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Controls +10%: Driven by market
share gains and structural tailwinds.
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Seals +1%: Resilient
performance in challenging markets.
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Life Sciences +6%:
Outperformance in stabilised markets.
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Complementary acquisitions driving future organic growth at
excellent returns
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Peerless acquired for £243m,
performing very well.
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PAR Group acquired for £37m, adding
scale to R&G's Seals & Gaskets division.
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Five additional bolt-ons
acquisitions for a total of £13m.
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Highly effective allocation of
capital, acquisitions together delivering 20% ROATCE in year
one.
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Healthy M&A pipeline diversified
by sector, size and geography. Strong cash flow and balance sheet
provides capacity to self-fund disciplined acquisitive
growth.
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Scaling effectively for sustainable growth
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Continued focus on management
development initiatives to sustain growth.
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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.
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Continued improvements against our
Delivering Value Responsibly targets.
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Further strengthened balance sheet:
committed facilities of £880m with maturities up to
2036.
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FY25 guidance
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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%.
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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. The results
are also available at http://www.rns-pdf.londonstockexchange.com/rns/6947M_1-2024-11-18.pdf
and the corporate website, 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
Conference call dial in
details:
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Dial in: UK-Wide: +44 (0) 33 0551 0200 / UK Toll Free: 0808 109
0700
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Password: Diploma Full
Year
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For further information please
contact:
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Diploma PLC -
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+44 (0)20 7549 5700
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Johnny Thomson, Chief Executive
Officer
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Chris Davies, Chief Financial
Officer
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Holly Gillis, Head of Investor
Relations
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Teneo -
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+44 (0)20 7353 4200
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Martin Robinson
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Camilla Cunningham
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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
The person responsible for releasing this Announcement is John
Morrison, Company Secretary.
LEI: 2138008OGI7VYG8FGR19