Diploma PLC

Good morning, everyone. Happy New Year to you all. Thank you very much for joining us. I'm delighted to be here with our newly promoted CFO, Wilson. Congratulations to him. A few words on our quarter one performance, and then we'll quickly get on to Q&A. We've made a great start to the year in quarter one, double digit organic growth and exciting acquisition momentum. Starting, first of all, with the organic side, As expected, we've had a strong quarter one, volume-led organic growth of 14%, similar shape to what we saw towards the end of last year. Peerless remains strong. Controls have done very well with some solid end market exposures like aerospace, defense, energy. Windy City is doing well, particularly with data centers and digital antenna systems. Seals fairly consistent with what we were seeing at the end of last year. North American seals doing well. Good progress in Europe and international seals. UK still quite tough and we're happy in a tougher environment, I would say, in life sciences and the healthcare space that life sciences is delivering at or around about our financial model. The margins are good and in line with what we would have expected. If I move on secondly to acquisitions, we're really pleased with the momentum in acquisitions. And as we know, they support our future organic growth at great returns. We've done another four in the quarter, spending around 75 million at a roughly seven times multiple. And that makes eight now in the last two quarters for about 130 million of investment. And I expect those eight to generate annualized profits of around about 20 million. The majority of our M&A, as you know, naturally gravitates towards the smaller bolt-on deals, and very occasionally we do a slightly bigger one. But we're very happy with the profile of the deals that we're seeing. The pipeline looks very good, but as always, we will maintain our discipline on M&A. Returns are very, very important to us, and so the deal flow we would never expect to be linear. But the acquisition momentum feels really, really good. Finally, a few words on the full year outlook. Organic growth guidance is unchanged at 6%. As we said in November, we expect this year to be first half weighted. Margin guidance also unchanged at 22.5%. Obviously, revenue from acquisitions is up a little given what I've just said. And of course, if we were to do more, this would increase over time. So overall, we're feeling good about the year. It's a good start. And we're feeling good about continuing our successful long-term track record of sustainable quality compounding. And with that, we'll hand over to questions.

Thank you. Ladies and gentlemen, if you would like to ask a question, please press star 1 on your telephone keypad. We'll pause for a brief moment. Thank you. We will now take our first question from Annelies Remmelin of Morgan Stanley. Your line is open. Please go ahead.

Morning, Johnny. Morning, Wilson. Two relatively quick ones are both on the acquisitions. So, as you say, last couple of quarters showing some increasing momentum in acquisitions and appreciate deals could be lumpy, but I'm wondering if there's anything new driving that that you would call out have you seen a change in the environment or improved availability of assets etc um and and perhaps you could comment on on how the more near-term pipeline looks for as we head into q2 and then secondly of those businesses that you've acquired could you comment on what kind of growth they're doing today and anywhere in particular that you feel there's a lot of upside to unlock um in line with your playbook thank you