Diploma (LON:DPLM) Releases Earnings Results

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

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 Trading Up 4.6%

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

Insider Buying and Selling at Diploma

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

Analyst Upgrades and Downgrades

A number of equities analysts have weighed in on DPLM shares. Berenberg Bank boosted their target price on shares of Diploma from GBX 6,600 to GBX 7,500 and gave the stock a “buy” rating in a research note on Thursday, March 19th. Jefferies Financial Group boosted their target price on shares of Diploma from GBX 5,200 to GBX 5,700 and gave the stock a “hold” rating in a research note on Monday, March 23rd. Shore Capital Group reaffirmed a “hold” rating on shares of Diploma in a research note on Wednesday, March 18th. Royal Bank Of Canada boosted their target price on shares of Diploma from GBX 6,200 to GBX 6,600 and gave the stock an “outperform” rating in a research note on Thursday, March 19th. Finally, Deutsche Bank Aktiengesellschaft boosted their target price on shares of Diploma from GBX 6,200 to GBX 6,400 and gave the stock a “buy” rating in a research note on Thursday, March 19th. Five analysts have rated the stock with a Buy rating and three have issued a Hold rating to the stock. Based on data from MarketBeat, the company presently has an average rating of “Moderate Buy” and an average target price of GBX 6,251.25.

Diploma Company Profile

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.