FPE Seals operator Diploma raises dividend after strong year

A technical equipment supplier operating a North East seals and hydraulic cylinder parts distributor and manufacturer is upping its dividend payout after strong results.

Diploma’s board has recommended an increase to its final dividend of 15 per cent to 20.5p per share following rises in revenues and profits.

The business operates across the areas of life sciences, seals and controls, with its estate including the Darlington-based FPE Seals, which makes and supplies polymeric seals and hydraulic cylinder parts for the engineering sector.

According to Diploma’s annual results for the period to September 30, released today (Monday, November 18), FPE played an important part in the group’s strong performance.

Bosses said FPE delivered double-digit underlying growth after benefiting from continued improvement in the oil and gas market, strong growth in international sales and demand in the UK aftermarket for hydraulic seals and cylinder parts.

When combined with Diploma’s wider portfolio, FPE’s performance helped group statutory pre-tax profit rise 15 per cent on a year ago to £83.5 million.

Revenues were up 12 per cent to £544.7 million.

Commenting on its results, chief executive Johnny Thomson said that while political and economic uncertainty is affecting industrial markets, the business remains confident of making further progress as moderately lower underlying growth will be offset by a strong contribution from acquisitions.

He added: “Diploma has delivered another strong set of results with double-digit revenue and earnings growth in the year.

“The political and economic outlook remains uncertain, but I am confident our resilient business model will support a consistently strong performance again in the year ahead.

“We have also reviewed and refreshed our strategy since I joined.

“Our plans are about continuity, building on the strong foundations of our value-add distribution model, focusing on the development of the organisation’s capability to deliver that model at scale and focusing on the significant growth opportunities in our core markets and products.

“I am excited by the prospect of working with my colleagues to deliver more success for Diploma in the future.”