Entering text into the input field will update the search result below

Diploma Plc - Enough To Seal The Deal?

Apr. 09, 2018 12:59 PM ETDiploma Plc. (DPMAF)
Cameron M Miller profile picture
Cameron M Miller


  • Another under the radar UK stock with impressive dividend growth.
  • Member of the FTSE 250 with a market cap just above £1bn.
  • 16% p.a average dividend growth over the past 10 years, coupled with 18-years of consecutive dividends.

In line with my previous articles looking at UK focused companies, I want to focus on Diploma PLC (OTC:DPMAF) here and the opportunities and challenges that face it going forward.


Diploma is not a household name in the UK, incorporated in 1931 and listed in 1960 the firm has undergone various changes in its core area of expertise mainly driven by acquisitions. During the 1970-80's the key elements of the business were Steel, building products and electronic components. These are highly cyclical sectors and ones in which the UK was losing its competitive advantage (as with most non-technical manufactured sectors), the ensuing economic downturn in the late 1990's led aspects of the company relating to these industries being sold off and that capital reinvested into new ventures. Diploma today stands as an amalgamation of the different smaller businesses that they have acquired.

The three sectors in which it now operates are life sciences, seals and controls. The share of revenue between the functions is 28%, 43% and 29%. The entry into these new markets was largely driven by a acquisitions of smaller companies both within the UK and increasingly in other markets. Diploma makes a point to celebrate the range and scope of acquisitions that it has made in the past 25 years, with a cumulative spend of £296m and a high of £38m being spent in 2015 expanding the product offering.

The diversity in products is also matched by the diversity in geography with Diploma having shifted from being focused solely on the UK to gaining traction in three main markets in Europe, North America and Australasia. This spread in geographic location has allowed the UK to become only 1/5th of group revenues. The breadth of Diploma's operations is presented below in the figure from the groups website.

This article was written by

Cameron M Miller profile picture
All opinions are my own.

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, but may initiate a long position in DPMAF over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

Recommended For You

To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.