Diploma first-quarter revenue up 23%

Specialised technical products company Diploma reported a jump in revenue for the first quarter, boosted in part by the weakening of the pound.

In the first quarter to the end of December, group revenue was up 23% on a reported basis over the same period the year before, and 6% higher at constant exchange rates, with acquisitions completed in the last twelve months contributing 2% net and underlying organic revenue growth of 4%.

The company said the depreciation of the pound versus all major global currencies in the aftermath of the Brexit vote contributed a 17% increase to reported group revenues.

In the life sciences business, revenues rose 11%, reflecting the impact of currency movements on translation of the results of the healthcare businesses. On an underlying basis, revenues were down 1% due to weaker sales of capital equipment versus a strong the previous year.

In the seals sector, revenues were up 22%, or 1% on an underlying basis, again reflecting the impact of currency movements on translation.

In North America, the aftermarket businesses showed good growth and stronger activity, offsetting a weak manufacturing sector on the industrial original equipment maker businesses, while international revenues showed modest growth.

In the controls sector, reported revenues were up 39%, with Cablecraft – which was acquired in March 2016 – making a significant contribution. On an underlying basis, after adjusting for currency and acquisitions, revenues were up 13%, driven by strong growth in the Clarendon specialty fastener business, but also against the background of weak comparatives in other controls businesses.

Diploma said its operating margin remains in line with expectations and slightly ahead of the first quarter last year.

“The group has a robust balance sheet and has a proven track record of strong cash generation which the group seeks to reinvest in acquiring new businesses to accelerate growth.”

Net cash funds at the end of December stood at £15.1m, up from £10.6m at 30 September 2016.