Diploma PLC (LON:DPLM) shares gained as it reported a 9% increase in full-year profit in the wake of the departure of chief executive Richard Ingram, who left in August after just four months in charge.
The company, which supplies specialised technical products and services to the life sciences, seals and controls industries, said adjusted pre-tax profit rose to £84.8mln in the year to September 30 from £77.5mln a year ago.
Revenue edged up 7% to £485.1mln with growth across all its divisions, supported by a £5.1mln contribution from newly acquired cable products business FS Cables and Coast Fabrication Inc, which supplies fasteners and seals to the aerospace, motorsports and defence sectors.
The group generated free cash flow of £60.5mln, up 9% on the previous year, and raised its interim dividend by 11% to 25.5p each.
“The results demonstrate the resilience of the group's businesses and the consistent delivery against the Group's strategy which has delivered compound double-digit growth in adjusted earnings per share over the past 10 years,” said executive chairman John Nicholas.
“Despite the global macroeconomic uncertainty, the board remains confident that the group will continue to make further progress in the coming year from a combination of steady ‘GDP plus’ underlying growth and from the group's proven and value-enhancing acquisition programme."
READ: Diploma CEO steps down in the 'best interests of the company and shareholders'
Nicholas agreed to take over as interim executive chairman while the company searches for a new chief executive to replace Ingham.
Ingham was appointed as chief executive at the start of the year to succeed Bruce Thompson, who had retired after 20 years in the role. Diploma announced in August that Ingham would step down because the board believed it was in “best interests of the company and its shareholders”.
In the full year results statement, Nicholas said the process was underway to find a replacement and the board is “confident that we will find the right chief executive to lead the group to continued success”.
Shares rose 3.8% to 1,345p in morning trading.
Russ Mould, investment director at AJ Bell, said Diploma has delivered a 1090% total return for shareholders over the past decade, which is the rise in its share price and all dividends reinvested.
"That is seven times greater than the 156% total return from the FTSE 100 index over the same period," he said.
He added: “Particularly reassuring from the latest results is the fact that senior management issues do not appear to have disrupted the business."