Updates and Ideas

Diploma - Three attractive niches

January 2006

Investing in shares may lose you all or some of your money. Past performance is no indication of future performance. Some of the shares recommended here may be small company shares, which can be relatively illiquid and hard to trade and this makes such shares more risky than other investments.

Diploma (DPLM; 781p) has been rapidly reshaped by chief executive Bruce Thompson since he took charge of the company in 1994. An acquisition spree in the previous two decades had left the group with three key divisions; electrical component distribution, building products and structural steel. All three were market leading but each division had seen margins shrinking. Over the next few years, Thompson virtually sold all those businesses for a total of approximately £90m and returned £70m to shareholders in 2001. The remaining cash was used to complete 19 acquisitions to establish a presence in three new niches; life sciences, seals and controls. Crucial to Diploma’s success has been the move to operate a ...

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Diploma - Three attractive niches

January 2006

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