The Lemon Fool

PRELIMINARY RESULTS FOR THE YEAR ENDED 30 SEPTEMBER 2021
Strong results and well-positioned for long-term growth

https://ir.q4europe.com/solutions/Diplo ... d=15255447

Best wishes


Mark.

Sometimes, the best performing companies fly 'under the radar' as it were.

Best wishes


Mark.

Sometimes, a company raises its dividend 43% for 2021; upgrades 2022 guidance in April 2022; reiterates that guidance; raises the interim for 2022 by 20% instead of the 13% forecast for full year; and then plunges on the market opening!

Best wishes


Mark

ADrunkenMarcus wrote:Sometimes, a company raises its dividend 43% for 2021; upgrades 2022 guidance in April 2022; reiterates that guidance; raises the interim for 2022 by 20% instead of the 13% forecast for full year; and then plunges on the market opening!

Best wishes


Mark

No-one invests in Diploma for the dividend though, so the share price reaction has nothing to do with it and more to do with the outlook for the next 6-12 months which the company itself highlighted will face tougher comparatives. So it is maybe the lack of growth in H2 YoY profits which the market is more concerned by today. As a long-term holder, short-term price changes are absolutely meaningless. Everything else seems fine profitability wise. FCF conversion dropped off but this was mainly due to inventory build up which is a sensible move until component shortages and supply chains normalise.

All the best, Si

Well I agree with both of you if I can.

I can't see why the SP was so badly off, what was there that wasn't expected, or changed since april? All the comparatives etc was all known? Was the market really expecting another upgrade?

I've been having a look at Spectris and Spirax too, good companies at better prices than seen for a long time. Renishaw too, all different to DPLM but similar too.

I have to admit that I do hold DPLM for the dividend and I have a very healthy dividend stream, growing strongly. Given the reiteration of April's updated guidance, I had suspected future comparatives would be baked in.

Best wishes


Mark.

ADrunkenMarcus wrote:I have to admit that I do hold DPLM for the dividend and I have a very healthy dividend stream, growing strongly. Given the reiteration of April's updated guidance, I had suspected future comparatives would be baked in.

Best wishes


Mark.

I was only pointing out that the vast majority of the market has no interest in the dividend and so a 20% increase is not going to move the share price on its own. I suspect many holders would prefer they paid none at all and reinvested the dividend money at the high rates of return the company enjoys. I know I would. It’s not like the company is going to upset any Equity Income funds as a result.

simoan wrote:I was only pointing out that the vast majority of the market has no interest in the dividend and so a 20% increase is not going to move the share price on its own.

Yes, I agree entirely Diploma investors are not the typical 'equity income' holders and your point is absolutely valid.

However, I do find it noteworthy that the proportional increase in the interim dividend is significantly higher than existing 'consensus' forecasts for the full year payout. Perhaps they will slow the growth in the final accordingly, but this is on the surface a very positive signal of confidence.

Best wishes


Mark.

doug2500 wrote:I've been having a look at Spectris and Spirax too, good companies at better prices than seen for a long time. Renishaw too, all different to DPLM but similar too.

I hold all other than Spectris:

SPX since 2015
DPLM since 2021
RSW since 2011

Best wishes

Mark.

ADrunkenMarcus wrote:

doug2500 wrote:I've been having a look at Spectris and Spirax too, good companies at better prices than seen for a long time. Renishaw too, all different to DPLM but similar too.

I hold all other than Spectris:

SPX since 2015
DPLM since 2021
RSW since 2011

Best wishes

Mark.

Quality though they are I can only imagine that your portfolio has gone through a similar amount of 'derisking' as mine

doug2500 wrote:Quality though they are I can only imagine that your portfolio has gone through a similar amount of 'derisking' as mine

Yes and no. I'll be putting together the year-end review for my dividend growth portfolio shortly. It's taken a hit but hasn't done as badly as I'd expected against my benchmarks.

Best wishes


Mark.

https://www.londonstockexchange.com/news-article/DPLM/directorate-change/15578458

That reads like something's not right - leaving before replacement in place, replacement doesn't have a start date yet, 6 week's notice, CEO taking over. As an ex-employee of a Diploma subsidiary, I would love to know the back story to this.

richreduk wrote:https://www.londonstockexchange.com/news-article/DPLM/directorate-change/15578458

That reads like something's not right - leaving before replacement in place, replacement doesn't have a start date yet, 6 week's notice, CEO taking over. As an ex-employee of a Diploma subsidiary, I would love to know the back story to this.

I agree, this doesn't look good. And with the September financial year end coming up, more than slightly concerning. At least she is thanked!

All the best, Si

ADrunkenMarcus wrote:

doug2500 wrote:I've been having a look at Spectris and Spirax too, good companies at better prices than seen for a long time. Renishaw too, all different to DPLM but similar too.

I hold all other than Spectris:

SPX since 2015
DPLM since 2021
RSW since 2011

The above should say 2012 for DPLM.

Despite the recent RNS, they had only just reiterated promising full year guidance. The most recent interim dividend was increased 20 percent so the business itself doesn't seem to be performing catastrophically.

Best wishes


Mark.