Diploma : Trading Statement

DIPLOMA PLC

TRADING UPDATE

Diploma PLC, the international group of businesses supplying specialised technical products and services, is today issuing a Trading Update for the year ending 30 September 2018.

Trading Summary

The Group has continued to trade robustly in the second half of the year and remains on track to report results for the full year in line with expectations.

Reported Group revenues for the year ending 30 September 2018 are expected to increase by ca. 7%. The headwind from the appreciation of UK sterling against the previous year has eased in the second half and is expected to impact revenues by ca. 3%. The acquisitions completed during the last eighteen months are expected to contribute ca. 3%, net of a small disposal. On an underlying basis, after adjusting for the impact of acquisitions and currency effects, Group revenues for the year are expected to increase by ca. 7%.

In the Life Sciences Sector, reported revenues are expected to be ca. 6% ahead of the comparable period, with a strong contribution from Abacus dx, the Australian diagnostic business acquired in April last year. On an underlying basis, Life Sciences revenues are expected to increase ca. 4% reflecting the benefit of good growth from the introduction of a new supplier in the Healthcare business and despite some capital project delays. In the Seals Sector, reported revenues have continued to benefit from strong trading conditions in both North America and Europe and are expected to increase by ca. 6% (up 9% on an underlying basis). In North America underlying revenues are expected to increase by ca. 11% although this rate of growth eases against a strong comparative in the final quarter of the financial year. In International Seals, underlying revenues have strengthened further in the second half of the year and are expected to grow by ca. 6% with strong trading in the European businesses supported by improved trading in Russia and Australia. In the Controls Sector, reported revenues are expected to increase by ca. 7% (up 4% on an underlying basis) against a strong comparative last year and reflecting generally positive trading conditions in its major European markets.

The Group's operating margin remains in line with expectations and is likely to be similar to that reported in the first half of the year.

Acquisitions

As announced on 22 August 2018, the Group has acquired FS Cables, a UK supplier of specialist cable products, for an initial cash consideration of £17.0m. The pipeline of acquisition opportunities remains healthy. The Group has a robust balance sheet and a proven track record of strong cash generation which the Group continues to reinvest in acquiring new businesses to accelerate growth.

At 30 September 2018, the Group's net cash funds are expected to be ca. £30m and the Group retains access to a £60m revolving credit facility.

In June 2018, the North American Seals business disposed of its engine and transmission gasket business for net asset value of ca. £4.5m.

The Group's results for the year ending 30 September 2018 will be announced on Monday, 19 November 2018.

Notes:

1. This Trading Update, which is based upon unaudited management accounts, has been prepared solely to provide additional information to the shareholders of Diploma PLC. It should not be relied on by any other party, for other purposes. Certain statements made in this Statement are forward-looking statements. Such statements have been made by the Directors in good faith using information available up until the date that they approved this Statement. Forward-looking statements should be regarded with caution because of the inherent uncertainties in economic trends and business risks.

2. A copy of this Statement, together with further information about Diploma PLC, may be viewed on its website at www.diplomaplc.com

Diploma PLC -	[phone]
Nigel Lingwood, Group Finance Director
Tulchan Communications -	[phone]
Martin Robinson
David Allchurch