Diploma (DPLM) H2 2025 earnings summary

Executive summary

• Delivered strong full-year results ahead of expectations, with double-digit revenue and earnings growth, positive momentum into FY26, and a disciplined, returns-focused strategy driving sustainable quality compounding.

• Seven-year CAGR: 19% revenue, 7% organic growth, 18% EPS, reflecting accelerated performance under current strategy.

• Strategic focus on organic growth, disciplined capital allocation, and selective acquisitions, supported by a robust and diversified portfolio and a powerful, decentralised culture.

• Significant investments in talent, management capability, and end market development to sustain long-term growth.

Financial highlights

• Revenue grew 12% year-over-year to £1,524.5m, with organic growth of 11% and 3% from net acquisitions.

• Adjusted operating profit increased 20% to £342.7m; operating margin expanded 160bps to 22.5%.

• Adjusted EPS rose 21% to 176.0p; dividend per share increased 5% to 62.3p.

• Free cash flow of nearly GBP 250 million and 105% cash conversion.

• Return on capital improved to 20.9%; leverage reduced to 0.8x net debt/EBITDA.

Outlook and guidance

• FY2026 organic growth expected at 6%, with growth weighted to the first half due to strong prior-year comparables.

• Acquisitions, net of disposals, to contribute 2% to revenue growth; further acquisitions could increase this.

• Operating margin guidance maintained at 22.5% for FY2026 at constant currency.

• Continued focus on compounding outcomes and maintaining prudent leverage below 2.0x.

• Long-term prospects remain strong, with a focus on sustainable quality compounding.