19 Nov 2024

Strong growth at great returns

Investor

Strong, volume-led organic revenue growth of 6%.
Reported revenue growth of 14%: 10% from acquisitions, partially offset by FX.
Adjusted operating margin up 120 basis points to 20.9%, reflecting our value-add proposition; operational leverage; disciplined cost management; and accretive acquisitions.
Highly effective capital allocation: £293m invested in seven quality businesses at 6x EBIT. Disposal of three non-core business entities after the year end for £45m at 7x EBIT.
Excellent return on capital across the Group with ROATCE up 100 basis points to 19.1%.
Strong free cash flow conversion of 101% reflecting disciplined working capital management.
Positive outlook for FY25.

Read the full announcement:

Thanks to my brilliant colleagues for another excellent year. Whilst some markets have been a little tougher this year, the quality of the team, our businesses, and the diversified portfolio have driven a strong performance. I am pleased with our organic growth, our margin progress, and the acquisitions we've made. Our discipline has been equally important: delivering great returns, cash flows, and selling some non-core businesses.

Johnny Thomson

Chief Executive, Diploma PLC

Revenue diversification driving organic growth and increasing resilience

Complementary acquisitions driving future organic growth at excellent returns

Peerless acquired for £243m, performing very well.
PAR Group acquired for £37m, adding scale to R&G’s Seals & Gaskets division.
Five additional bolt-on acquisitions for a total of £13m.
Highly effective allocation of capital, acquisitions together delivering 20% ROATCE in year one.
Healthy M&A pipeline diversified by sector, size and geography. Strong cash flow and balance sheet provides capacity to self-fund disciplined acquisitive growth.

Scaling effectively for sustainable growth

Continued focus on management development initiatives to sustain growth.
Three new state-of-the-art facilities opened to support future growth in the UK and Europe, making it 10 new facilities in the last five years.
Continued improvements against our Delivering Value Responsibly targets.
Further strengthened balance sheet: committed facilities of £880m with maturities up to 2036.

FY25 guidance

At constant currency, we expect: organic growth of ca. 6%; acquisitions announced to date (net of disposals) to add ca. 2% to reported revenue; and an operating margin of ca. 21%.