Financial Highlights
- Revenue up 13% with continued strong performance in the Seals businesses and good contributions from the Life Sciences and Controls businesses; adjusted profit before tax up 17% to 52.6m.
- Adjusted operating margin of 20.3% (+70 bps) reflecting operational leverage in North American Seals businesses.
- Good underlying organic growth with revenue and adjusted operating profits up 6% and 11% respectively, after adjusting for currency, acquisitions and a small divestment.
- Free cash flow up by 31% to 32.7m, despite increased capital investment of 3.5m to support future growth of businesses.
- Net funds of 7.9m, after investing 22.3m acquiring businesses and 14.2m in dividend distributions to shareholders.
- Full year dividend up 20% at 14.4p reflecting confidence in long term prospects and strong balance sheet.
Operating Highlights
Underlying growth of 13% in the Seals businesses; particularly strong growth in North American Aftermarket.
Good underlying growth of 5% in Life Sciences businesses; strong sales of capital equipment in first half.
Underlying growth of 2% in Controls, held back by reduced activity in Continental Europe and UK Food & Beverage
Positive contributions from new businesses acquired during year - J Royal in the US; Abbeychart and Amfast in the UK; DSL in Australia.
Significant progress made with planned investments to support future growth of the business - 2.1m of cash investment in 2012.
Commenting on the results for the year, Bruce Thompson, Diploma's Chief Executive said:
"Diploma has delivered another year of strong double-digit growth in revenues and profits, by a combination of "GDP plus" levels of organic growth and contributions from a number of good quality, value-enhancing acquisitions.
We have a resilient, well diversified business that provides essential products and services generally funded by customers' operating rather than capital budgets. This business model delivers recurring income and stable organic revenue growth, with carefully selected acquisitions accelerating the growth to the target double-digit levels. Our strategy has been proven over the last five year business cycle with a resilient performance during the downturn, followed by strong growth in the recent period of slow recovery and uncertain markets. Over the last five years, the Group has grown adjusted EPS at a compound growth rate of 20% pa.
During the year, we have also made significant progress in making the investments in the facilities, IT systems and management resources needed to lay the robust foundation for continued growth in the next five year period. The Group's proven strategy, well diversified business and the strong balance sheet and robust cash flow, gives the Board confidence that the Group is well placed to make further progress during the new financial year."
