Diploma (DPLM) H2 2024 earnings summary

Executive summary

• Achieved 14% reported revenue growth and 6% organic growth year-over-year, despite challenging industrial markets.

• EPS grew by 15%, and margins increased by 120 basis points to 20.9%, maintaining a track record of sustainable quality compounding.

• Seven quality businesses were acquired for £293 million, and three non-core entities were divested for £45 million to support portfolio focus and future growth.

• Maintained high returns, robust cash generation, and a strong balance sheet, supported by disciplined capital allocation and a scalable value-add model.

• Positive outlook supported by scalable value-add model and disciplined capital allocation.

Financial highlights

• Revenue rose to £1,363.4m (+14% year-over-year); adjusted operating profit up 20% to £285.0m.

• Adjusted operating margin expanded 120bps to 20.9%; adjusted EPS grew 15% to 145.8p.

• Free cash flow reached nearly £200 million, with cash conversion at 101%.

• Net debt increased to £420 million, leverage at 1.3x, well within policy limits.

• Dividend increased by 5% in line with policy, total dividend per share at 59.3p.

Outlook and guidance

• FY25 guidance: organic revenue growth around 6%, with acquisitions net of disposals adding ~2% to reported growth.

• Operating margin expected at approximately 21% (constant currency), slightly ahead of model.

• Medium-term model updated for structurally higher operating margin, transitioning to a 20%+ margin group.

• Positive start to FY25 with momentum across all sectors and margin-accretive acquisitions.

• Diversification and value-add propositions expected to drive continued resilience and growth.