Diploma sales growth accelerates thanks to weak pound

Underlying sales grew 2% in the year to September at Diploma with acquisitions and the weak pound helped lift statutory revenues 14%.

Acquisitions are expected to contribute roughly 8% to group revenues, while currency effects add around 4%.

The technical products group said its free cash flow in the year ending 30 September 2016 is likely to be "substantially" ahead of last year, helped by reduced investment in working capital in the second half of the year.

Acquisitive Diploma also hailed its "very strong" balance sheet that is expected to return to a modest net cash position by the period end and, alongside its £50m multi-currency revolving facility, provides ammunition for further purchases.

Of the three divisions, Life Sciences has seen underlying revenue growth of around 3% as revenue growth slowed in the second half, as anticipated due to the strong comparative period last time.

The Seals arm grew underlying revenue growth roughly 1%, with trading in North America still "challenging", Australia "weaker" and Europe "robust".

Controls should deliver 3% growth as market conditions were said to have improved for the Interconnect businesses, particularly in the Aerospace and Defence sectors, while the Specialty Fasteners businesses made a strong contribution.

Operating margins will remain roughly 100 basis points below the prior year, after a keeping broadly consistent with the first half.