Diploma pays dividend; confident on 2021

(Sharecast News) - Diversified technical and services group Diploma increased its dividend as it reported a fall in full-year profits.
The company on Monday reported a fall in pre-tax profit to £66.7m from £83.5m for the year to September 30. Revenue was down 1% to £538.4m. A final dividend of 30p a share was declared, up 3%.

Diploma's life sciences division delivered "a rapid and sustained recovery across the Healthcare businesses" with underlying revenues down 4%.

"As hospital and lab activity improves and the backlog of procedures unwinds, Life Sciences is well positioned for accelerated growth in 2021," the company said.

The unit, which makes up about 25% of the group, was hardest hit at the height of the pandemic, due to the cancellation of non-urgent elective surgery. There was a recovery in July when lockdown measures had been relaxed and pressure on hospital wards eased.

Revenue at the controls business, which was most exposed to UK markets hit by the pandemic saw revenue fall 12% to £156.6m.

"We expect to deliver another strong performance in the year ahead with a return to underlying mid-single digit growth and historic margins, in line with market expectations," the company said.

"We expect that in the first half of 2021 the existing business will show modest sales and margin improvement over the second half of 2020 but below pre-Covid-19 comparatives."