Diploma (LON:DPLM) Posts Earnings Results

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

Shares of DPLM stock opened at GBX 6,916.92 on Tuesday. The company has a quick ratio of 0.80, a current ratio of 2.04 and a debt-to-equity ratio of 46.97. Diploma has a 52 week low of GBX 4,558 and a 52 week high of GBX 7,295. The stock has a market capitalization of £9.28 billion, a PE ratio of 50.38, a P/E/G ratio of 2.82 and a beta of 0.92. The firm has a 50 day moving average of GBX 6,303.33 and a two-hundred day moving average of GBX 5,749.15.

Wall Street Analysts Forecast Growth

Several equities research analysts have recently issued reports on the stock. Jefferies Financial Group increased 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. Berenberg Bank raised their price target on shares of Diploma from GBX 6,600 to GBX 7,500 and gave the company a “buy” rating in a research note on Thursday, March 19th. Deutsche Bank Aktiengesellschaft raised their price target on shares of Diploma from GBX 6,200 to GBX 6,400 and gave the company a “buy” rating in a research note on Thursday, March 19th. Royal Bank Of Canada increased their price objective on shares of Diploma from GBX 6,200 to GBX 6,600 and gave the company an “outperform” rating in a report on Thursday, March 19th. Finally, Stifel Nicolaus increased their price objective on shares of Diploma from GBX 6,200 to GBX 6,800 and gave the company a “buy” rating in a report on Thursday, March 19th. Five analysts have rated the stock with a Buy rating and three have issued a Hold rating to the stock. According to MarketBeat, the company presently has an average rating of “Moderate Buy” and a consensus target price of GBX 6,251.25.

Insider Buying and Selling

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

About Diploma

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.