Diploma: Shares in FTSE 100 giant boom after profit upgrade
Shares in specialist tech supplier Diploma boomed on Wednesday morning after the group slapped a hefty upgrade on its financial targets for 2026.
The firm’s stock was up as much as 15 per cent on open to 5,771.06p.
It came as the FTSE 100 giant said it expects revenue growth to come in at nine per cent for the year, as opposed to a previously six per cent, following a boost in activity from its aerospace and data centre operations.
Diploma said it is seeing a surge in demand for specialised parts used in commercial aircraft, which are currently being built at record rates.
The blue-chip firm added it expects its operating margin – a key measure of profitability – to swell to 25 per cent from 22.5 per cent. This is set to hand a 13 per cent upgrade to the business’ profit.
Diploma said it expects another “outstanding” growth performance from Peerless, its US-based distributor of speciality fasteners for aerospace and defence markets.
“The upgraded guidance largely reflects a strong performance in Peerless,” Akhil Patel, equity research analyst at Shore Capital, said.
Diploma ‘much more resilient’
Patel added: “The group is now much more resilient and well-diversified given its expansion into attractive end markets, which are backed by long-term structural growth drivers”.
Diploma has completed eight acquisitions in the two most recent quarters for a price tag of around £130m.
The firm said it expects these moves to add around £20m to its annual profit.
“With a healthy short-term pipeline, we feel optimistic about this momentum continuing in the months ahead,” Diploma said on Wednesday.
Wednesday morning’s stock surge helped take the group to a ten per cent gain for the year, erasing previous losses amid stock jitters around the Middle East conflict.
In the last 12 months, the stock has risen by nearly 50 per cent.