Diploma backs full-year expectations after in line Q1

Diploma said on Wednesday that it traded in line in the first quarter as it backed its expectations for the full year.

The company said it had made a "positive" start to the year, with group revenue in the quarter to the end of December 2019 up 9% compared to the same period a year ago. At constant exchange rates, revenues were 11% higher, with acquisitions completed last year contributing 9% and underlying growth of 2%.

The operating margin in the first quarter remained in line with expectations.

Revenue in the life sciences segment was up 2% and 3%, respectively, on a reported and underlying basis, held back by the timing of product delivered to customers. However, Diploma said it expects these revenues to be recovered in the second quarter.

The seals sector business saw reported revenues rise 18%, which included a strong contribution from businesses acquired last year, in particular VSP Technologies. Underlying revenues were "marginally" ahead of the comparable period amid "challenging" industrial markets in North America and Europe.

Meanwhile, controls sector revenues were 3% and 4% higher on a reported and underlying basis and included "another strong contribution" from Clarendon Specialty Fasteners.

Diploma said it invested a further£14m in the acquisition of two businesses since the previous year end, comprising CR System Components, a fastener business based in Germany and PumpNSeal, a seals business based in Australia.

"The pipeline of acquisition opportunities remains healthy and the group's balance sheet continues to benefit from strong cash generation," it said.