Shares in Diploma PLC (LSE:DPLM), the FTSE 100 specialist distribution group, rose 5% to 6,950p after the company delivered another set of interim results that beat expectations and triggered its second guidance upgrade in three months.
The group reported 15% organic revenue growth in the six months to 31 March, an operating margin of 24.5%, earnings growth of 36%, and returns on capital of 22.7%.
The standout performance came from the Controls division, which delivered 26% organic growth in what management described as favourable market conditions.
Seals grew 2% organically, with North America progressing well and infrastructure markets providing strength, while the company pointed to exciting developments in nuclear power as a future growth driver.
International Seals remains a drag, though the outlook is said to be improving.
Life Sciences delivered 4% organic growth, broadly in line with wider healthcare market trends.
Peel Hunt, which rates the stock a buy with a 7,300p price target, noted the results represented a clear beat to both consensus and its own estimates for the first half.
Diploma has also maintained its acquisition pace, completing seven deals so far in the 2026 financial year for a combined £180 million at an average multiple of nine times.
Management raised full-year guidance for the second time, having already upgraded significantly in an unscheduled trading update in March, with organic growth expectations lifted to 12% from 9% and acquisition-driven growth raised to 6% from 3%.
The margin target was held at 25%.
Peel said the upgrades resulted in a roughly 6% increase to consensus and its own forecasts, adding that it had anticipated further upgrades following the March trading update and that the company had now delivered on both organic growth and acquisition contributions.