Diploma PLC (LON:DPLM) said Richard Ingram has stepped down as chief executive and executive director with immediate effect because the board believes it is in “best interests of the company and its shareholders”.
Non-executive chairman John Nicholas will take over as interim executive chairman until a permanent chief executive is appointed.
The company, which supplies specialised technical products and services to the life sciences, seals and controls industries, said the search for a successor to Ingram is underway.
In a separate trading update, Diploma said it remains on track to meet full year expectations after a robust second half.
READ: Diploma reports rise in first-half profits despite currency headwinds
Reported revenues for the year to September 30 are expected to rise 7%, supported by an easing of foreign exchange headwinds and contributions from recent acquisitions. Diploma estimates revenues will grow across its life sciences, seals and controls divisions while the operating margin is expected to be broadly flat.
Acquisition opportunities 'remain healthy'
Diploma added that the pipeline of acquisition opportunities remains healthy after announcing last week that it had agreed to buy FS Cables, a UK supplier of specialist cable products, for an initial cash consideration of £17mln.
“The group has a robust balance sheet and a proven track record of strong cash generation which the Group continues to reinvest in acquiring new businesses to accelerate growth,” it said.
At the end of September, the net cash funds are estimated to be £30mln, up from £17.7mln at the end of March, boosted by the £4.5mln disposal of the engine and transmission gasket business in the North American seals arm.
Numis hikes target price
Numis maintained a 'hold' rating on the stock but raised its target price to 1,355p from 1,275p, saying the second half trading was slightly ahead of its expectations.
"We have updated our forecasts for the trading update, the recent FS Cables acquisition, and foreign exchange: we have increased our 2018 earnings per share (EPS) estimate by 1.5% to 55.0p and 2019 and 2020 EPS by 5% to 60.8p and 64.5p respectively."
Shares rose 3.9% to 1,419p in morning trading.