PRELIMINARY RESULTS FOR THE YEAR ENDED 30 SEPTEMBER 2021
Strong results and well-positioned for long-term growth |
|
|
FY 2021 |
FY 2020 |
Y/y change |
|
Revenue |
£787.4m |
£538.4m |
+46% |
|
Underlying revenue growth (1) |
12% |
(7)% |
|
|
Adjusted operating profit(2) |
£148.7m |
£87.1m |
+71% |
|
Adjusted operating margin(2) |
18.9% |
16.2% |
+270bps |
|
Statutory operating profit |
£104.3m |
£69.8m |
+49% |
|
Free cash flow conversion(3) |
103% |
113% |
|
|
Adjusted earnings per share(2) |
85.2p |
56.4p |
+51% |
|
Basic earnings per share |
56.1p |
43.5p |
+29% |
|
Total dividend per share |
42.6p |
30.0p |
+42% |
|
ROATCE |
17.4% |
19.1% |
(170)bps |
(1) Adjusted for acquisition and disposal contribution and currency effects
(2) Before acquisition related charges and acquisition related finance charges
(3) Before cash flows on acquisitions, disposals and dividends
Strong full year financial performance
- Underlying revenue growth 12% year-on-year, well ahead of our 5% financial model and 7% up on FY 2019, driven by our organic growth initiatives and better demand.
- Strong overall acquisition contribution with an outstanding Windy City Wire (“WCW”) performance.
- Adjusted operating margin +270bps to 18.9%, supported by our value-add servicing distribution model, offsetting inflation, and well ahead of our 17%+ financial model.
- 51% growth in adjusted earnings per share (“EPS”) and 42% proposed increase in total dividend.
Delivering Value Responsibly (“DVR”) – ESG
- Our colleagues have been brilliant and Engagement Survey results are encouraging.
- ESG priorities and metrics defined and starting to embed in our businesses' commercial and operational strategies.
- Products and solutions with a Positive Impact on the environment and society an important component of current revenues and future growth strategy.
- Sustainable supply chain: part of our value proposition to align with our supply partners on environmental and social responsibility.
Strong underlying growth in all three Sectors
- Controls +16%: International Controls +8%, benefiting from diversification initiatives and returning to underlying growth over FY 2019 by year end. Outstanding year for WCW, with underlying revenues +26% on the back of market share gains.
- Seals +7%: North American Seals +5%, starting to benefit from the transition to Louisville facility and building on a resilient FY 2020. International Seals +9% on the back of encouraging diversification activities.
- Life Sciences +14%: sharp recovery due to increased access to hospitals and laboratories, some Covid-related product, and excellent performances from our Scandinavian acquisitions (Simonsen & Weel and Kungshusen).
Strategic progress through acquisitions
- Portfolio: focusing around high quality, scalable businesses for organic growth.
- £456m invested in 10 strategically important acquisitions to accelerate our growth, including £348m on WCW.
- Five acquisitions completed in H2 for total spend of £55m including: Kungshusen (Life Sciences, Sweden), SWA (Controls, UK), Techsil (Controls, UK), AHW (Controls, US).
- The pipeline is encouraging. We remain disciplined and focused on ROATCE, which has increased during H2 to 17.4% for the full year (from 16.5% at H1).
- Disposals: a1-CBISS in H2, Kentek post-year end for a combined total of £22m.
Strong free cash generation and balance sheet to support future growth
- Cash conversion of 103% with selective inventory investment offset by good receivables collection.
- Faster than expected deleveraging: net debt/EBITDA 1.1x (0.8x excluding H2 acquisitions).
Positive outlook
- The market environment remains uncertain and we continue to manage supply chain disruption and labour pressures.
- Positive and unchanged outlook for FY 2022: expect ca.10% reported revenue growth including mid-single digit underlying revenue growth, consistent with our financial model and H1 weighted; and a margin between 18% and 19%.
- Confident in our ability to deliver long-term growth at sustainably high margins.
Commenting on the results, Johnny Thomson, Diploma's Chief Executive said:
“I want to thank all my Diploma colleagues for another outstanding year in very challenging circumstances. We have delivered strong results, including underlying growth and margin well ahead of our financial model. We have made significant strategic progress, including a record year for acquisitions, as we continue to develop high quality scalable businesses for organic growth. We are excited by the progress we have made with our Delivering Value Responsibly agenda, with clear priorities which we are embedding in our business activity. So, despite market uncertainties, I remain confident in our ability to deliver attractive long-term growth at sustainably high margins .”