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FOR IMMEDIATE RELEASE
5 August 2008
DIPLOMA PLC
SECOND INTERIM MANAGEMENT STATEMENT
IN RESPECT OF YEAR ENDING 30 SEPTEMBER 2008
Diploma PLC, the international group of specialised distribution businesses is today issuing its second Interim Management Statement in accordance with the Disclosure and Transparency Rules, issued by the UK Listing Authority. This Statement relates to the period from 1 April 2008 to date and includes trading during the third quarter ended 30 June 2008.
The Group's businesses continue to demonstrate resilience in the face of uncertain economic conditions in the geographic markets in which the Group operates and have traded in line with expectations during the period since 1 April 2008. Group revenue was more than 20% ahead of the comparable period last year, both for the third quarter and for the year to date.
In the Life Sciences sector, revenues continue to be substantially ahead of last year. The Canadian Healthcare businesses showed strong growth with an excellent first year contribution from AMT; growth in the European businesses was more modest.
In the Seals sector, revenues continue to be well ahead of the comparable period last year, boosted by the strong first year contribution from the Danish business, M Seals. The US and the UK businesses continue to benefit from their focus on non-discretionary spend in Aftermarket applications; revenues remain in line with both our expectations and the comparable period last year. In June 2008, the Group acquired a small Aftermarket seals distributor based in the Netherlands; this will provide additional focus for the Group's strategy of extending the Hercules business model into Continental Europe.
In the Controls sector, the businesses in the UK and Germany continue to benefit from their focus on buoyant, technically driven market segments. Revenues are significantly ahead of last year, representing a combination of strong underlying growth and a good contribution from the Cabletec business, acquired last year.
The results during the period also benefited on translation from the weak value of UK Sterling relative to the Canadian dollar and the Euro; these two currencies have strengthened against UK Sterling by 7% and 14% respectively, compared to the same period last year.
The Group's financial position remains strong with net cash of £8.6m at 31 July 2008 and undrawn committed term facilities of £17.6m. On 5 June 2008, the Group acquired for a cash consideration of £1.3m (€1.7m), the whole of the share capital of Snijders Engineering BV, a small seals distributor in the Netherlands.
There have been no other material changes in the position of the Group in the period since the publication of the Interim Report for the six months ended 31 March 2008.
The Group continues to achieve solid revenue growth from its focus on essential products and services, funded by customers' operating rather than capital budgets. Attractive margins are sustained through the quality of customer service, depth of technical support and value adding activities. These characteristics and the strong balance sheet provide the Group with resilient qualities in uncertain market and economic conditions. The Board is confident of meeting market expectations for the full year.
Notes:
This Interim Management Statement, which is based upon unaudited management accounts, has been prepared solely to provide additional information to the shareholders of Diploma PLC in order to meet the requirements of the UK Listing Authority's Disclosure and Transparency Rules. It should not be relied on by any other party, for other purposes. Certain statements made in this Statement are forward-looking statements. Such statements have been made by the Directors in good faith using information available up until the date that they approved this Statement. Forward-looking statements should be regarded with caution because of the inherent uncertainties in economic trends and business risks. The next update on trading is expected to be issued in late September 2008, just prior to entering the close period in respect of the Group's results for the year ending 30 September 2008, which are expected to be released in mid November 2008. A copy of this Statement, together with further information about Diploma PLC, may be viewed on its website at www.diplomaplc.com| For further enquiries please contact: | |
| Bruce Thompson, Chief Executive Officer | 020 7549 5700 |
| Nigel Lingwood, Group Finance Director | 020 7549 5705 |
| Simon Bloomfield, Bankside Consultants | 020 7367 8861 |
NOTE TO EDITORS:
Diploma (www.diplomaplc.com) is an international group of specialised businesses supplying technical products and value-added services to selected industries. The Group operates principally in the UK, Germany, US and Canada and employs approximately 1,000 people worldwide. Group headquarters are located in London.
The Group's strategy is to build a more substantial, broader based business by combining robust organic growth with selective, value enhancing acquisitions. The successful execution of this clear growth strategy by an experienced management team has enabled the Group to grow revenues by 17% per annum and profits by 20% per annum over the last 5 years. Approximately half of this growth has been achieved organically and half through acquisitions.