(Alliance News) - Diploma PLC on Monday said pretax profit declined slightly in the first half, despite an increase in revenue that increased the company's confidence for the full year and prompting an upgrade to its annual guidance.

The London-based supplier of specialised technical products reported GBP77.8 million in pretax profit for the six months ended March 31, down 1.1% from GBP78.7 million a year before.

Revenue was GBP638.3 million, up 9.5% from GBP582.8 million.

Revenue growth was recorded across Diploma's three sectors, with Seals showing the most significant improvement, by 22% to GBP241.2 million.

Further growth will be supported by Diploma's focus on "selective acquisitions", it said. The company acquired six "high-quality" businesses over the interim period for a total of GBP284 million.

Earnings before interest, tax, depreciation and amortisation rose 16% to GBP273.5 million from GBP236.3 million.

Basic earnings per share were down 8.9% to 43.1 pence from 47.3p.

Operating expenses increased 12% to GBP550.3 million from GBP490.3 million.

Diploma declared an interim dividend of 17.3p per share, up 4.8% from 16.5p in the first half of financial 2023.

Chief Executive Officer Johnny Thomson said: "We've delivered another strong first half with good volume-led organic growth in a more challenging market environment. Our momentum is encouraging going into the second half, underpinning our upgrade to full-year guidance."

Diploma now expects constant currency revenue growth of 16% for the full year, up 0.5% from the company's previous guidance.

Diploma also anticipates an improved operating margin of 20.5%, an increase of 0.8 percentage point from its previous forecast, as well as EPS growth of 15%.

In financial 2023, Diploma delivered GBP1.20 billion in revenue and GBP183.3 million in operating profit at a 19.7% margin. EPS was 90.8p.

Shares in Diploma were up 5.1% at 4,102.13 pence each in London on Monday morning.

By Hugh Cameron, Alliance News reporter

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