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Diploma says strong pound to hurt first-half results, shares fall
March 24, 2014 / 8:41 AM / in 4 years

Diploma says strong pound to hurt first-half results, shares fall

March 24 (Reuters) - British industrial wiring and component supplier Diploma Plc said a strong pound would hurt its first-half results and revenue growth would halve from a year earlier.

Shares in Diploma, which supplies products ranging from hydraulic seals to components for Formula 1 cars, fell as much as 14.5 percent on Monday morning to become the biggest percentage loser on the London Stock Exchange.

The company said group revenue was likely to grow about 5 percent for the six months ending March 31.

Diploma had posted a 10 percent revenue growth in the year-ago-period.

“Significant movements in exchange rates have adversely impacted the results of the overseas businesses when translated into UK sterling,” the company said in a trading update on Monday.

The pound has risen 1.85 percent against the dollar from Sept. 30 through Friday.

Diploma, which gets about three-quarters of its revenue from outside the UK, also said a strengthening pound will continue to impact its results.

The company said it expects revenue from its controls business to increase about 10 percent on an underlying basis, helped by sales in UK and Germany.

Diploma estimates first-half adjusted profit before tax to be similar to year-ago levels.

The company reported revenue of 139.7 million pound ($230.43 million) and a pretax profit of 23.8 million pounds in the six months ended March 2013.

Diploma shares were down nearly 11 percent at 682.5 pence at 0837 GMT. ($1 = 0.6063 British Pounds) (Reporting by Tasim Zahid in Bangalore; Editing by Joyjeet Das)

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