Diploma (LON:DPLM) Announces Earnings Results

Diploma (LON:DPLM) issued its quarterly earnings data on Tuesday. The company reported GBX 74.70 earnings per share (EPS) for the quarter, Digital Look Earnings reports. The firm had revenue of £851.10 million during the quarter. Diploma had a net margin of 8.99% and a return on equity of 14.17%.

Here are the key takeaways from Diploma’s conference call:

• H1 results were very strong, with organic growth of 15%, total revenue up 17%, operating margin expanding 300 bps to 24.5%, and EPS rising 36%. Return on capital also improved to 22.7%, underscoring continued compounding performance.
• The company raised full-year guidance again, now expecting 12% organic growth and 6% contribution from acquisitions, up from 9% and 3% previously. Management said it still expects operating margin to hold at 25% for the year.
• Controls was the standout division, delivering 26% organic growth, led by strong performances from Clarendon, IS-Group, Windy City Wire, and Peerless. Management said growth is broad-based and should remain strong, even if comparisons get tougher in H2.
• Acquisition activity accelerated, with 15 deals completed over the last 12 months and GBP 310 million deployed in total. Management emphasized that deal flow remains strong, but some acquisitions may be slightly dilutive to group margins in the near term.
• Seals and Life Sciences remain mixed: North American Seals performed well, while International Seals showed improvement late in Q2 but remains challenged; Life Sciences posted 4% organic growth and management expects broadly mid-single-digit growth for the full year.

Diploma Stock Up 4.6%

Diploma stock opened at GBX 6,930 on Tuesday. The stock has a market capitalization of £9.29 billion, a PE ratio of 50.47, a price-to-earnings-growth ratio of 2.82 and a beta of 0.92. Diploma has a twelve month low of GBX 4,558 and a twelve month high of GBX 7,295. The company has a quick ratio of 0.80, a current ratio of 2.04 and a debt-to-equity ratio of 46.97. The company has a 50 day moving average of GBX 6,303.33 and a 200-day moving average of GBX 5,749.15.

Analyst Upgrades and Downgrades

A number of brokerages recently issued reports on DPLM. Royal Bank Of Canada boosted their price objective on shares of Diploma from GBX 6,200 to GBX 6,600 and gave the company an “outperform” rating in a report on Thursday, March 19th. Berenberg Bank upped their price target on shares of Diploma from GBX 6,600 to GBX 7,500 and gave the company a “buy” rating in a report on Thursday, March 19th. Stifel Nicolaus upped their price target on shares of Diploma from GBX 6,200 to GBX 6,800 and gave the company a “buy” rating in a report on Thursday, March 19th. Deutsche Bank Aktiengesellschaft upped their price target on shares of Diploma from GBX 6,200 to GBX 6,400 and gave the company a “buy” rating in a report on Thursday, March 19th. Finally, Shore Capital Group reiterated a “hold” rating on shares of Diploma in a report on Wednesday, March 18th. Five investment analysts have rated the stock with a Buy rating and three have given a Hold rating to the company. Based on data from MarketBeat.com, Diploma has an average rating of “Moderate Buy” and a consensus price target of GBX 6,251.25.

Insider Activity

In other Diploma news, insider Ian El-Mokadem bought 500 shares of Diploma stock in a transaction that occurred on Friday, March 20th. The stock was acquired at an average price of GBX 5,820 per share, for a total transaction of £29,100. 1.14% of the stock is owned by company insiders.

About Diploma

Diploma PLC, together with its subsidiaries, supplies specialized technical products and services in the United Kingdom, Continental Europe, North America, and internationally. It operates through three business sectors: Life Sciences, Seals, and Controls. The Life Sciences sector supplies technology-enabled products used in surgical procedures in operating theatres and endoscopy; testing equipment and services for clinical laboratories; and bio-pharma, food safety and testing, and other research-oriented products.