Diploma PLC (LON:DPLM) said underlying revenues dropped by 28% in April though it continues to generate “good” operating profits and cash flows.
The technical products supplier carried on with operations throughout lockdowns with heightened safety measures.
The FTSE 250-listed company is saving cash by freezing all capital expenditure and discretionary spend, suspending the interim dividend and cutting the board’s salaries and fees by 20%.
The group, which supplies products from fluid seals to testing equipment for laboratories, said the outlook remains uncertain due to global market disruption though it remains confident on its medium-term prospects.
In the half-year to 31 March, revenue advanced 9% to £283mln, for profit before tax up 4% to £41mln.
Net debt at period-end was £30mln and Diploma is eligible to draw up to £225mln in state help for companies hit by Covid-19.
Downgrade to 'hold'
Analysts at Peel Hunt said the crisis will present acquisition opportunities while the decentralised model will allow all three divisions to react quickly when industrial budgets improve again.
However, the broker reduced the recommendation to 'hold' from 'add', after upping the target price to 1650p from 1450p as "the valuation has got ahead of the story a little" and are now trading above the five-year average.
Shares rose 2% to 1,798p on Monday in early trades.
--Adds analyst's comment, shares--