Diploma PLC (LON:DPLM), a specialised international distribution business has reported a strong first quarter’s trading ahead of its Annual General Meeting later today. Group sales in the three months to end December 2022 rose by 30%.
Roughly a third of the reported growth came from each of organic sources, recently acquired businesses and currency movements.
Q4 2022 hedge fund letters, conferences and more
The group expect the first half of their financial year to be the stronger period and see full year organic growth running at a mid-single digit pace, with acquisitions adding around 6% and operating margins holding firm in the 18-19% range. The shares reacted positively to the news, rising by 2% at the opening of trading.
Diploma's Growth
Steve Clayton, fund manager at HL Select, Hargreaves Lansdown:
“We hold Diploma in our HL Select UK Growth Shares Fund precisely because it has a long track record of delivering growth even when times are tough. We won’t see too many businesses sounding so confident in their prospects in the current economic conditions, highlighting Diploma’s position as one of the UK’s highest quality industrial companies.
Diploma seek out growing markets within their three core categories of Industrial Seals, Controls and the Life Sciences. They sell niche products to customers with demanding or complex service requirements and by providing a high level of value-add to the goods they distribute earn reliably robust margins.
Diploma are off to a strong start this year and we expect to see strong underlying cash flow from the group as a result, which should allow Diploma to build on its twenty-plus year track record of unbroken dividend growth.”
