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Diploma PLC share rose on Tuesday after it said that it expects full-year revenue growth to be significantly ahead of its previous guidance.
Shares were trading 8.6% higher at 2,728.00 pence each in London on Tuesday morning.
The London-based specialised technical products and services company said it has seen double-digit underlying growth in the second quarter - in line with its first quarter performance - driven by ‘robust’ demand and market share gains.
The firm also noted it has made two acquisitions for a combined total of around £121 million.
‘Acquisitions are an integral part of the strategy, with a disciplined focus on acquiring value-added businesses, with great management teams, to accelerate our organic growth,’ the company explained.
It has acquired aftermarket distribution business R&G Fluid Power Ltd for about £100 million and LJR Electronics LLC, a distributor of connectors in the US, for about £14 million.
In relation to the conflict between Russia and Ukraine, the company noted that the situation is not directly impacting its businesses. It added that it is still ‘closely monitoring the wider economic trading environment.’
Looking ahead, Diploma said it anticipates low double digit underlying revenue growth and reported revenue growth a ‘little over’ 20%. This would exceed its previous guidance of revenue growth of around 10% including mid-single digit underlying revenue growth.
The company expects its operating margin expectation to be at the top end of its 18% to 19% range.
‘Our strong trading to date, acquisitions and confidence in our prospects mean we now expect full year performance to materially exceed our previous guidance,’ the firm said.
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