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Diploma pulls dividend as Covid-19 hits April revenues
11th May 2020 07:07
(Sharecast News) - Diploma pulled its interim dividend and said April revenue had slumped by more than a quarter as it warned of an uncertain second half amid the coronavirus crisis.
The technical products specialist on Monday said underlying revenues fell 28% last month as it posted a 4% rise in pre-tax profits to ?41.6m for the six months to March 31.
Revenues for period had been expected to be 11% higher year-on-year until the coronavirus started to hit Diploma's numbers on March 16 as lockdowns started to restrict movement and affecting sectors such as aerospace.
"However trading in April has been more challenging as it reflects the economic impact of the Covid-19 pandemic, said chief executive Johnny Thomson.
"We have also taken decisive action to mitigate the impact on our business which includes freezing all capital expenditure and discretionary spend and we remain focused on managing our working capital."
The company said the board and and executive team had also taken a 20% cut in basic salary and fees for the duration of the crisis.
Underlying half-year revenues were up 10% on constant currency basis while underlying revenue up 1% reflecting a softer industrial environment and impact of Covid-19 pandemic in March as well as against a strong comparative; good contribution of 9% from acquired businesses.
Diploma said it continued to generate good operating profits and cash flows. The group also said it was eligible for up to ?225m of cash facilities under the government's Covid Corporate Financing Facility.
The technical products specialist on Monday said underlying revenues fell 28% last month as it posted a 4% rise in pre-tax profits to ?41.6m for the six months to March 31.
Revenues for period had been expected to be 11% higher year-on-year until the coronavirus started to hit Diploma's numbers on March 16 as lockdowns started to restrict movement and affecting sectors such as aerospace.
"However trading in April has been more challenging as it reflects the economic impact of the Covid-19 pandemic, said chief executive Johnny Thomson.
"We have also taken decisive action to mitigate the impact on our business which includes freezing all capital expenditure and discretionary spend and we remain focused on managing our working capital."
The company said the board and and executive team had also taken a 20% cut in basic salary and fees for the duration of the crisis.
Underlying half-year revenues were up 10% on constant currency basis while underlying revenue up 1% reflecting a softer industrial environment and impact of Covid-19 pandemic in March as well as against a strong comparative; good contribution of 9% from acquired businesses.
Diploma said it continued to generate good operating profits and cash flows. The group also said it was eligible for up to ?225m of cash facilities under the government's Covid Corporate Financing Facility.