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Acquisitions help lift Diploma Q1 revenues by 9%

By Frank Prenesti

Date: Wednesday 16 Jan 2019

Acquisitions help lift Diploma Q1 revenues by 9%

(Sharecast News) - Technical services group Diploma said first quarter revenues increased by 9% over the comparable period last year.
At constant exchange rates, group revenues increased by 8%, with acquisitions completed last year, net of a small disposal, contributing 4% and underlying growth of 4%. The weakening of sterling during the past quarter provided a small benefit of 1% to reported group revenues.

In a separate announcement the company confirmed that Johnny Thomson had been appointed as chief executive.

In the life sciences sector, reported and underlying revenues were up 4%, supported by encouraging growth across several revenue streams, particularly in the Canadian surgical and endoscopy businesses, Diploma said.

The seals sector reported revenues up by 2%, or 3% on an underlying basis, driven by strong trading in the international seals businesses where underlying revenues were up 11% against a weak comparative, supported by good growth from more robust oil & gas markets and recent contract wins.

In North America, underlying revenues were 3% below a very strong comparative last year, the company said.

In the industrial OEM business revenues were impacted in the first quarter by some delays in deliveries in the initial weeks of their enterprise resource planning implementation.

"However, demand remained solid in the quarter and revenues are expected to be recovered in the coming months," Diploma said.

Underlying aftermarket sales remained robust and were 1% ahead of a very strong comparative last year.

In the controls sector, reported revenues were up 24% reflecting the contribution from FS Cables and Gremtek acquired in August 2018 and October 2018, respectively.

The group's operating margin in the first quarter remained in line with expectations and slightly below the comparable period last year.

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