Diploma PLC (LON:DPLM) said it is on track to deliver “good growth” for the year as it expects underlying revenue to rise 5% in the first half.
The technical products and services provider delivered growth across all three of its divisions in the six months to March 31 but the strongest performer was the controls unit, which makes wiring, cables, connectors, fasteners and control devices.
Diploma expects the controls unit to post an 8% rise in underlying revenue for the period, boosted by demand from the aerospace market.
READ: Diploma poaches ex-Compass finance boss as new chief executive
The company said there has been a good initial contribution from the acquisition of cable supplier FS Cables and Gremtrek, a manufacturer of protective sleeving and identification products for cables.
The seals business, which makes hydraulic seals, gaskets, cylinders and components for heavy mobile machinery and specialised industrial equipment, is forecast to achieve a 4% rise in underlying revenue as a strong performance in North America offset delivery delays in industrial original equipment manufacturing.
In the life sciences division, which supplies consumables and instrumentation to healthcare and environmental sectors, it is expected to report a 5% increase in underlying revenue, driven by demand in Canadian surgical and endoscopy, and Australian diagnostics.
“Diploma's performance in the first half has been robust. Despite the global macroeconomic uncertainties, the group remains on track to deliver good growth and modest margin progression for the full year in line with expectations,” said Johnny Thomson, who became chief executive in February.
“As I continue to learn more about the Diploma businesses, I am encouraged by the quality and passion of the people, the constant commitment to add value to our customers and the exciting prospects for continued growth."
In a note to clients, analysts at Peel Hunt said; “Despite the global macroeconomic uncertainties, the Group remains on track to deliver good growth and modest margin progression for the full year in line with expectations.”
The broker expects to leave its forecasts for the FTSE 250-listed shares unchanged and keep its ‘add’ rating and 1,407p price target on the stock, which in afternoon trading was 1% lower at 1,407p.
-- Adds analyst comment, share price --