Distribution group Diploma has announced a significant increase in full-year dividends following a 20% rise in profit, largely due to a series of acquisitions. The FTSE 100 company reported an adjusted operating profit of £285m, a substantial increase from last year's £237m.
Revenue also saw a boost, rising by 14% to reach £1.4bn. As a result, investors can anticipate a generous 59.3p dividend, marking a 5% increase year-on-year, with adjusted earnings per share standing at 145.8p, up by 15%, as reported by .
CEO Johnny Thomson expressed satisfaction with the company's performance, stating it had been "another excellent year... I am pleased with our organic growth, our margin progress, and the acquisitions we've made."
He further highlighted the importance of discipline in achieving great returns, cash flows, and in selling some non-core businesses. Despite these positive results, shares fell over five per cent in early trading after Thomson acknowledged the company was facing a "tougher environment" seen throughout 2024.
Diploma has completed several acquisitions this year, including a major £243m deal to purchase aerospace supplier Peerless, and a £37m takeover of PAR Group, a provider of plastic, rubber and insulation products. The former deal led to shares reaching an all-time high in March as Diploma predicted an eight per cent earnings per share accretion during the first 12 months of ownership.
The group stated on Tuesday that it expected acquisitions announced to date to contribute around two per cent to revenue and bring operating margins to 21 per cent.
