Diploma Regulatory News (DPLM)

DIPLOMA PLC

12 CHARTERHOUSE SQUARE, LONDON EC1M 6AX

TELEPHONE: +44 (0)20 7549 5700

FACSIMILE: +44 (0)20 7549 5715

FOR IMMEDIATE RELEASE

24 March 2016

DIPLOMA PLC

TRADING UPDATE

Diploma PLC, the international group of businesses supplying specialised technical products and services, is today issuing a trading update for the six months ending 31 March 2016, ahead of going into its close period.

Trading Summary

The businesses acquired during the past year have made a good contribution to the Group's overall results and revenues for the six months ending 31 March 2016 are expected to be ca. 9% ahead of the comparable period. The acquired businesses have contributed ca. 8% to Group revenues. Currency movements have reduced revenues by ca. 1%, despite the weakening of UK sterling since the beginning of the calendar year. On an underlying basis, after adjusting for the impact of currencies and acquisitions, revenues are expected to increase by 1-2%.

In the Life Sciences Sector, underlying revenues are expected to show good growth, with stronger capital equipment sales in certain businesses against weak comparatives. Reported revenues in Life Sciences will be broadly flat due to the impact of currency movements on translation of the results of the Healthcare businesses. In the Seals Sector, reported revenues will be substantially ahead of last year, reflecting the contribution from the businesses acquired during the past 12 months. On an underlying basis, revenues are likely to be broadly unchanged on the strong comparable period. In the Controls Sector, reported revenues are expected to be marginally up on the previous year, helped by strong growth in the Specialty Fastener business and with an initial contribution from the recent Cablecraft acquisition. The Interconnect and Fluid Controls businesses are beginning to stabilise but on an underlying basis Controls revenues are expected to be slightly below last year.

In Life Sciences, the impact on Healthcare gross margins from further depreciation of the Canadian and Australian dollars against the US dollar through 2015 has been partly mitigated by stronger gross margins in the Group's other businesses. Following a strong 18 month period for acquisitions, the initial lower operating margins in the acquired businesses, together with investments in these businesses have impacted the Group's operating margin at the Half Year which is expected to be ca. 100bps below the comparable period last year.

Financial Position

After spending ca. £31m on completing the acquisitions of WCIS in October 2015 and Cablecraft in early March 2016, the Group expects to have net debt of ca. £25m at 31 March 2016, compared with net cash balances of £3.0m at 30 September 2015. The Group currently has a committed revolving bank facility of £50m of which £40m has been drawn down.

The Group's Half Year results will be announced on Monday, 16 May 2016.

Notes:

1. This Trading Update, which is based upon unaudited management accounts, has been prepared solely to provide additional information to the shareholders of Diploma PLC .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.

2. A copy of this Statement, together with further information about Diploma PLC, may be viewed on its website at www.diplomaplc.com

NOTE TO EDITORS:

Diploma PLC is an international group of businesses supplying specialised technical products and services to the Life Sciences, Seals and Controls industries.

Diploma's businesses are focussed on supplying essential products and services which are funded by the customers' operating rather than their capital budgets, providing recurring income and stable revenue growth.

Our businesses then design their individual business models to closely meet the requirements of their customers, offering a blend of high quality customer service, deep technical support and value adding activities. By supplying essential solutions, not just products, we build strong long term relationships with our customers and suppliers, which support attractive and sustainable margins.

Finally we encourage an entrepreneurial culture in our businesses through our decentralised management structure. We want our managers to feel that they have the freedom to run their own businesses, while being able to draw on the support and resources of a larger group. These essential values ensure that decisions are made close to the customer and that the businesses are agile and responsive to changes in the market and the competitive environment.

The Group employs ca. 1,500 employees and its principal operating businesses are located in the UK, Northern Europe, North America and Australia.

Over the last five years, the Group has grown adjusted earnings per share at an average of ca. 15% p.a. through a combination of organic growth and acquisitions. Diploma is a member of the FTSE 250 with a market capitalisation of ca. £850m.

Further information on Diploma PLC, together with a copy of this Announcement, is available at www.diplomaplc.com