It has been a long time since I last looked at Diploma, which was an unexciting company in the 1990s involved in electronic component distribution, building products, lintels and special steels. When I did take a fresh look though, I found much had changed. All those original businesses had been sold with £70m of the £90m raised returned to shareholders.
The reshaped business has since grown part organically and partly by acquisition. It has three divisions in life sciences, seals and controls and is delivering impressive growth. The latest interims shows sales and profits up 25 and 22 per cent respectively with adjusted earnings per share up 21 per cent at 7.6p and a policy of targeting cover at two times rather than 2.5 times allowing the dividend to be raised 39 per cent to 2.5p.
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