Diploma expects interim revenue growth to be 9% higher than in 2013

LONDON (ShareCast) - Specialised technical products and services provider Diploma (LSE: DPLM.L - news) said it expected first half revenue to be approximately 9% higher year-on-year. In a trading update on Monday, the FTSE 250 group said acquisitions have contributed 9% to revenues, but strong currency volatility weighed on results, reducing revenue by approximately 2% The group said that after adjusting for the impact of currencies and acquisitions, sales are expected to climb 2% on an underlying basis.

The Seals business, which has benefited from acquisitions completed 2014 and from strong demand in North America, where growth has declined slightly from 9% to 7-8% in the second quarter.

Citing weak second quarter trading in the group's Life Sciences and Controls division, analysts at Numis estimate underlying growth to have slowed down from 4% in the first quarter to zero in the following three months.

However, "acquisitions made to date should ensure that full year remains a double-digit revenue growth year," the brokerage said in a note on Monday, adding it reiterated its 'add' rating on the stock.

Diploma shares were up 0.55% to 815.50p at 09:50 on Monday.