Diploma (DPLM) delivered a marginal improvement in full-year profits, despite continued tough trading for the specialised technical products provider, while higher turnover in two of the three trading divisions was boosted by a number of acquisitions. Crucially, free cash flow remained strong at £31.6m and shareholders were rewarded with a hefty dividend hike.
At the divisional level, the seals business - which provides hydraulic-related parts for heavy machinery - saw revenue grow 6 per cent to £106.1m. Although significant investment as part of the group's growth programme made for a 4 per cent decline in adjusted operating profit here to £19.5m, while the unit's operating margin slipped from 20.4 per cent to 18.4 per cent. The controls division, meanwhile, grew sales 5 per cent to £86.2m - reflecting a small acquisition and full-year contributions from Abbeycraft and Amfast, acquired in 2012. Without that, though, turnover there would have dropped 3 per cent, as did divisional operating profit - to £13.9m - mainly reflecting relocation costs. Still, revenue at the life science unit, which provides consumables for healthcare services, grew 19 per cent to £93.2m, lifting operating profit here by 16 per cent to £20.9m.
Broker Numis Securities expects full-year pre-tax profit of £58.5m and EPS of 37p (from £54.3m and 34.8p in 2013).
| DIPLOMA (DPLM) | ||||
|---|---|---|---|---|
| ORD PRICE: | 656p | MARKET VALUE: | £743m | |
| TOUCH: | 655-659p | 12-MONTH HIGH: | 722p | LOW: 440p |
| DIVIDEND YIELD: | 2.4% | PE RATIO: | 21 | |
| NET ASSET VALUE: | 156p* | NET CASH: | £19.3m | |
| Year to 30 Sep | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2009 | 160 | 20.5 | 10.8 | 7.80 |
| 2010 | 184 | 26.7 | 14.6 | 9.00 |
| 2011 | 231 | 39.2 | 24.0 | 12.0 |
| 2012 | 260 | 46.0 | 27.9 | 14.4 |
| 2013 | 286 | 48.5 | 30.7 | 15.7 |
| % change | +10 | +5 | +10 | +9 |
Ex-div: 27 Nov Payment: 22 Jan *Includes intangible assets of £106m, or 94p a share | ||||
