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UPDATE 1-Diploma's adjusted profit rises 19 pct; shares surge
November 20, 2017 / 9:55 AM / 25 days ago

UPDATE 1-Diploma's adjusted profit rises 19 pct; shares surge

(Adds details of results, share movement)

By Sanjeeban Sarkar

Nov 20 (Reuters) - British industrial component distributor Diploma Plc reported a 19 percent rise in full-year adjusted pretax profit as its controls unit saw new project activity and recovery in some end-user markets.

Diploma shares rose as much as 8.4 percent to 1160 pence in a muted London market. The stock was trading at the top of the FTSE midcap index by 0945 GMT.

Underlying revenue at the company’s controls unit rose 14 percent, while its seals unit saw a 4 percent growth.

Recovery in the North American heavy construction and industrial sectors in calendar year 2017 boosted revenue, CEO Bruce Thompson told Reuters.

The company, which supplies products ranging from hydraulic seals to engine-repair gadgets for Formula 1 cars, would also be looking to spend about 30 million pounds for acquisitions in North America and Europe, he added.

Acquisitions in 2018 would augment earnings growth, Jefferies analysts said in a note, and reiterated a “buy” rating.

Diploma reported an adjusted pretax profit of 77.5 million pounds ($102.5 million)for the year ended Sept. 30.

Revenue rose 18 percent to 451.9 million pounds for the year, Diploma said. ($1 = 0.7559 pounds) (Reporting by Sanjeeban Sarkar in Bengaluru; Editing by Gopakumar Warrier)

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