Technical products supplier Diploma PLC (LON:DPLM) said that it anticipates “moderately lower growth” ahead to be offset by a strong contribution from its acquisitions, having taken over four small companies in the past year.
In its full-year results on Monday, the FTSE 250 company posted revenues up 12% to £544.7mln, of which it said that 5% represented underlying revenue growth, another 5% came from its acquisitions during the year, and the remaining 2% came from the depreciation of sterling.
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Looking ahead, newly-appointed chief executive, Johnny Thomson, said that while industrial markets continued to be impacted by an uncertain political and economic environment, he was confident in another strong performance for the group.
In the twelve months ended 30 September, the group, which supplies products from fluid seals to testing equipment for laboratories, said it spent a “record” £78.3mln on acquisitions, which included gaskets and fluid sealing products supplier VSP Technologies, and small seals businesses Gremtek, DMR Seals and Sphere.
Together, these additions brought in £9.3mln in revenue, with management in “active discussions” regarding more bolt-on acquisitions to come.
As Diploma explained, “the heightened uncertainty in global industrial markets has led to a healthier pipeline of acquisition opportunities as vendors of good quality businesses decide to exit their companies, having enjoyed the benefit of relatively favourable macroeconomic conditions over the previous few years”.
Overall, profit before tax rose 15% to £83.5mln in the period, which was helped by an increase in the operating margin, up 30 basis points to 17.8%.
The total dividend per share increased by almost as much, up 14% to 29p from 25.5p last year.