Shares in Diploma Plc, supplier of technical products and services, jumped on Monday after a strong set of full-year results which included a 19% rise in pre-tax profit.
The company, which supplies and services medical equipment, hydraulic seals and other products, reported "strong results with double-digit growth in revenue and earnings" for the year ended 30 September.
Diploma announced full-year adjusted operating profit rose to £789.2m, a 19% rise on the previous year's earnings, thanks to an 18% increase in group revenue to £451.9m.
Profit before tax rose 24% to £66.8m giving the group a total profit for the year of £48.2m, up 23% on the previous year. Adjusted earnings per share at 49.8p was up 19% and the company proposed a 15% dividend increase to 23p a share.
Other full-year highlights included:
- Adjusted operating margins improved slightly to 17.3% as transactional currency effects eased
- Strong free cash flow of £55.7m; cash funds of £22.3m at end of September
- Acquisition expenditure of £20.1m this year; ca. £90m invested over three years in acquiring value enhancing businesses
- Group's return on adjusted trading capital ("ROATCE") improved to 24%
Bruce Thompson, chief executive (left), said: "Diploma reported another strong performance in 2017, delivering strong double-digit growth in revenue and earnings. All of the group's sectors contributed to this growth with a particularly strong performance from controls.
"The Group's performance in 2017 provides confidence in the Group's prospects for solid underlying growth in the year ahead, which we aim to enhance by unlocking value enhancing acquisition opportunities.
"With a proven business model, broad geographic spread of businesses, robust balance sheet and consistently strong free cash flow, the Board is confident that further progress will be made in the next financial year."
Investors were impressed with the performance and the confident outlook and pushed the shares 8.97% higher to £11.66 by mid morning in London.