16th Jan 2019 08:10
LONDON (Alliance News) - Diploma PLC on Wednesday reported an increase in revenue in the first quarter of its current financial year, helped by weak pound, contract wins and acquisitions.
The mid-cap technical products supplier also said it has appointed Johnny Thomson as chief executive from February 25 to replace Richard Ingram, who stepped down at the end of August "in the best interests of the company".
Ingram was temporarily replaced by interim Executive Chair John Nicholas, who will resume his non-executive chair role immediately following Thomson's appointment.
Thomson has spent nine years at foodservice company Compass Group PLC, serving as finance director in the past three years.
"I am delighted to welcome Johnny Thomson to Diploma," said Nicholas. "I look forward to working closely with him during the next phase of Diploma's evolution and growth."
Separately, Diploma said it has made a "solid" start to its financial 2019, with overall trading in line with expectations.
For the three months to the end of December, the company reported a 9% year-on-year increase in revenue. At constant exchange rates, revenue increased by 8%. The company noted that the weakening of sterling during the past quarter provided a small benefit of 1% to its revenue.
On a divisional basis, the Life Sciences sector reported and underlying revenue were up 4%, supported by encouraging growth across several revenue streams, Diploma said.
In the Seals sector, reported revenue increased by 2%, driven by the continuation of strong trading in the company's international businesses, where underlying revenue was up 11%. This growth was boosted by good performance from oil & gas markets and recent contract wins.
However, in North America, underlying revenue was 3% below year-on-year as a result of a very strong comparative last year, Diploma noted.
In the Industrial OEM business revenue was impacted in the first quarter by some delays in deliveries. More positively, the company said the demand remained solid in the quarter and revenue is expected to be recovered in the coming months.
Underlying Aftermarket sales remained robust and were 1% ahead of the prior year, while in the Controls sector, reported revenue jumped 24%, reflecting the contribution from FS Cables and Gremtek acquired in August and October 2018, respectively.
Diploma shares were trading 2.1% lower on Wednesday morning at 1,242.02 pence a share.
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DiplomaCompass Group