Diploma PLC (CHIX:DPLMl)
£ 51.95 -0.20 (-0.38%) Market Cap: 6.97 Bil Enterprise Value: 7.41 Bil PE Ratio: 41.83 PB Ratio: 7.38 GF Score: 94/100
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Half Year 2025 Diploma PLC Earnings Call Transcript

May 20, 2025 / 08:00AM GMT
Release Date Price: £48.15 (+14.83%)

Key Points

Positve
  • Diploma PLC (DPLMF) reported a strong earnings growth of 23% with a return on capital of 19.1%, demonstrating effective compounding credentials.
  • The company achieved 9% organic growth and a total revenue increase of 14%, driven by market share gains in aerospace, defense, energy, and data center markets.
  • Operating margin improved by nearly 2 percentage points to 21.5%, contributing to a 23% increase in EPS.
  • The company has a disciplined performance with 78% cash conversion and significant balance sheet headroom, with leverage at 1.1 times.
  • Diploma PLC (DPLMF) upgraded its full-year expectations, forecasting 8% organic growth and a 22% operating margin, reflecting strong momentum into the second half.
Negative
  • The Seals segment experienced flat growth due to ongoing market softness, particularly in manufacturing and construction sectors.
  • Working capital increased by GBP38 million, primarily due to increased inventory following the acquisition of Peerless.
  • Net interest expense rose to GBP14 million, driven by increased average debt from self-funded acquisitions.
  • The tax rate increased to 24.5%, slightly higher than the previous year, impacting net earnings.
  • The company faces challenges in the European market, particularly in the UK, with tough conditions in construction and agriculture sectors.
Operator

Good day, and welcome to the Diploma Plc half-year results 2025 webcast and conference call. At this time, I would like to turn the conference over to Johnny Thomson, Chief Executive Officer. Please go ahead.

Jonathan David Thomson
Diploma PLC - Group Chief Executive Officer, Executive Director

Thank you. Good morning, everyone, and welcome to our first-half year results update. I'm joined as usual by our CFO, (Trades, Portfolio), and it's the usual agenda. I'll start with the overview and then Chris will take you through the numbers before I come back to talk about the businesses, questions and answer as usual at the end. So let's get straight into it.

We're making good progress this year and I'm really pleased with a very strong performance again in the half.

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