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Diploma warns of coronavirus hit to first-half numbers
25th Mar 2020 09:59
(Sharecast News) - Diploma, the technical products specialist, warned on Wednesday that market conditions had changed rapidly in recent weeks following the coronavirus outbreak, weighing on first-half numbers.
Updating the market on the six months to 31 March, the FTSE 250 firm said it had seen "very limited impac" from Covid-19 up to 16 March. Revenues for period had been expected to be 11% higher year-on-year, and group operating margin had been forecast to be broadly in line with the first six months of the 2019 full year.
"However, the outbreak of Covid-19 has led to a rapid change in market conditions, affecting Diploma's trading from around 16 March, particularly, until now, in continental Europe, where public mobility has been most restricted, and in sectors most affected by the crisis, such as civil aerospace," it said.
"While it is difficult to draw precise conclusions from a single week of trading, the group now expects to report for the first of the year an overall performance slightly weaker than described above. The change in market conditions as a result of Covid-19 is now affecting trading in many of our businesses."
The company added it had a "resilient and proven business model, with a robust balance sheet and health liquidity". But it conceded: "It remains too early to assess the impact that this unfolding situation will have on trading for the full year."
Chief executive Johnny Thomson said the company had planned to confirm its full-year outlook, but said that was no longer possible.
"Our immediate priority is to safeguard the health and wellbeing of our colleagues, and to continue to serve our customers and operate effectively with our suppliers," he added. "We continue to work closely with all our businesses to manage our response to the outbreak of Covid-19 as effectively as possible."
As at 0930, shares in Diploma were off 1% at 1,413.0p.
Updating the market on the six months to 31 March, the FTSE 250 firm said it had seen "very limited impac" from Covid-19 up to 16 March. Revenues for period had been expected to be 11% higher year-on-year, and group operating margin had been forecast to be broadly in line with the first six months of the 2019 full year.
"However, the outbreak of Covid-19 has led to a rapid change in market conditions, affecting Diploma's trading from around 16 March, particularly, until now, in continental Europe, where public mobility has been most restricted, and in sectors most affected by the crisis, such as civil aerospace," it said.
"While it is difficult to draw precise conclusions from a single week of trading, the group now expects to report for the first of the year an overall performance slightly weaker than described above. The change in market conditions as a result of Covid-19 is now affecting trading in many of our businesses."
The company added it had a "resilient and proven business model, with a robust balance sheet and health liquidity". But it conceded: "It remains too early to assess the impact that this unfolding situation will have on trading for the full year."
Chief executive Johnny Thomson said the company had planned to confirm its full-year outlook, but said that was no longer possible.
"Our immediate priority is to safeguard the health and wellbeing of our colleagues, and to continue to serve our customers and operate effectively with our suppliers," he added. "We continue to work closely with all our businesses to manage our response to the outbreak of Covid-19 as effectively as possible."
As at 0930, shares in Diploma were off 1% at 1,413.0p.