Diploma PLC (LSE:DPLM), the specialist distributor of industrial controls, seals and life sciences products, saw its shares surge over 16% to a new all-time high of 5,885p after upgrading its full-year profit forecast.
In an unscheduled update, it raised the number by around 13% above analyst expectations due to strong demand from aerospace and data centre customers.
The FTSE 100 group said it now expects operating profit margins of around 25% for the year to September 2026, up from previous guidance of around 22.5%, with organic revenue growth upgraded to 9% from 6%.
The company said earnings growth for the full year is expected to exceed 20%.
The upgrade was driven largely by Peerless, its aerospace components business, where management said demand and supply conditions are "favourable and sustainable."
Other divisions also contributed, with its Windy City Wire unit performing well in data centre and digital antenna markets, and its controls businesses growing strongly in energy and defence.
North American Seals is making good progress, particularly in infrastructure and nuclear power, but international seals, especially in the UK, remain a drag on the division's overall growth rate.
Diploma completed eight acquisitions in the preceding two quarters for around £130 million, with a further pipeline of deals under consideration, though these are not included in current guidance.
Broker Stifel said: "This is clearly an exceptional update from Diploma. Having delivered 14% organic growth in 1Q, the upgrade to organic growth guidance is not a complete surprise.
"We did not anticipate the scale of the upgrade to the operating margin guidance from c.22.5% to c.25%, and a key focus [of questions on the conference call] will be where does the group see sustainable margins going forward."