Diploma reports strong profits in spite of sterling strength

Technical products and services firm, Diploma, has reported higher revenue and profits for the financial year, despite strong headwind from strengthened sterling.

As 75% of the group’s revenue is generated outside the UK, the recent significant strengthening of UK sterling against most major currencies has capped demand.

Despite this, the firm reported a 4% jump in pre-tax profit amounting to £49.8m for the year to end-September. Revenue also rose 7% to £305.8m, from £285.5m a year earlier. The group’s strong performance reflects good second half recovering in aftermarket businesses in the US, following disruption from severe winter weather.

Total dividend for the year also increased to 17p per share from 15.7p per share.

Chief executive, Bruce Thompson, said: "The Diploma businesses have made good progress this year benefiting from greater confidence in their principal markets with strong underlying revenue growth in each of the group's sectors. Given the strong comparatives and the uncertain macroeconomic backdrop, the Board expects growth to trend this year towards our target "GDP plus" rates.

"With an improving acquisition environment and a good pipeline of opportunities, prospects for acquisition activity in 2015 are encouraging. This provides the board with confidence that further progress will be made in the new financial year.”

As of 11:29 on Monday, Diploma’s share price rose 0.36% to 687.50p per share.