Diploma lifts half -year revenue, strong pound to hurt final results

24th Mar 2014 07:18

- Solid increase in half-year revenue- Adversely affected by appreciation of sterling- Full-year expected to be at similar levels than last yearTechnical products and services provider Diploma said revenue for the half-year is expected to increase by seven per cent from the year earlier but it warned that full-year earnings will be affected by the stronger pound."At the current exchange rates, the significant appreciation in UK sterling will continue to impact the group's reported results on translation," it warned. Diploma expects that adjusted profit before tax for this financial year is likely to be at a similar level to last year. "As an indication, the impact on the prior year results of applying the current exchange rates would have been to reduce full-year revenues and adjusted operating profits by around £14m and £3m, respectively," it said.For the half-year, Diploma said the strongest revenue growth was from Controls, with trading up sharply in both the UK and Germany. Revenues are now expected to increase by 10% on an underlying basis. In Life Sciences, both the Healthcare businesses enjoyed solid growth where strong consumable revenues offset weaker capital revenues. In the European Environmental businesses revenues are expected to increase by 7%. Diploma, which has spent around £12m on acquisitions during the half-year period, said Seals continued to deliver steady revenue growth, with underlying revenues expected to increase by 4%."Despite the strong underlying performance, significant movements in exchange rates have adversely impacted the results of the overseas businesses when translated into UK sterling," Diploma concluded.CJ