Interim Results - 6 Months to 31 March 2000

Diploma PLC
16 May 2000



                                  DIPLOMA PLC


INTERIM RESULTS FOR 6 MONTHS ENDED 31 MARCH 2000

Diploma PLC, the specialised distribution group, today announces its interim
results for the six months ended 31 March 2000.

Highlights                     Six months ended     Year ended
                                       31 March   30 September
                               2000        1999         1999
                                                            
Group Sales                  £46.9m     £125.3m      £241.9m
Profit before tax and         £5.3m       £5.6m       £11.0m
exceptionals
Profit before tax after      £10.7m       £7.8m       £20.2m
exceptionals
Earnings per share*           17.9p       11.5p        32.0p
Adjusted earnings per          7.1p        7.2p        14.0p
share*
Net assets per share*          205p        170p         187p
                                                            


  -    Continued re-shaping of the Group to focus on growth opportunities and
     release shareholder value
  -    Considerations at above, or the top end of estimates, achieved in
     divesting mature subsidiaries - two year programme has now generated £75m
  -    Return of £50.3m of capital (£1.00 per share) to shareholders, completed
     just after the half year in April 2000
  -    Continued focus on the new core of Specialised Distribution businesses
     with investments in new products, geographic expansion, e-commerce and
     management development, to provide the foundation for growth


*Per share figures are based on the old Diploma PLC's 50.3m issued shares.  In
April 2000, a substantial return of capital was made by means of a Scheme of
Arrangement.  For every 2 old Diploma PLC shares, shareholders received 1 new
Diploma PLC share and £2.00 in cash.  The number of shares in issue has been
reduced to 25.2m new Diploma PLC shares.


For further information please contact:-

Christopher Thomas, Chairman or
Bruce Thompson, Chief Executive Officer
Diploma PLC   020 7638 0934


INTERIM REPORT FOR THE SIX MONTHS ENDED 31 MARCH 2000

CHAIRMAN'S STATEMENT

We have continued to re-shape the Group to focus on growth opportunities and
release shareholder value.  Considerations at above, or at the top end of
estimates have been achieved in divesting mature subsidiaries, and
shareholders have received direct benefit in a tax effective manner through
the return of capital.

Following the major divestments, for the six months ending 31st March 2000,
turnover at £46.9m was less than half that of the comparable period (£125.3m).
Operating profit from the continuing activities (before head office charges)
was level at £4.3m, while interest and property rental received, broadly
balanced profits from divested operations.  Profit before tax, exceptional
items and minority interests reduced by 5% to £5.3m (£5.6m). Cash flow was
good with operating activities producing £5.4m in the half year.

During the half year, the divestments of the SEI Macro Group and Robert Lee
were completed.  These divestments, along with the sale of certain properties,
generated cash receipts of £44.5m in the half year and net exceptional gains
of £5.8m. The net cash balance at the end of March 2000 was £69.0m before the
return of capital.

Unadjusted earnings after tax and minority interests were £9.0m or 17.9p per
share, against £5.9m or 11.5p per share for the comparable period.   After
excluding exceptional items, adjusted earnings after tax and minority
interests were £3.6m (£3.7m) or expressed in earnings per share terms
7.1p(7.2p).

After the end of the half year, in April 2000, the planned return of surplus
capital was completed by means of a Scheme of Arrangement.  For every 2
Diploma shares, shareholders received 1 new Diploma share and £2.00 in cash.
This achieved the result of returning £50.3m of surplus capital to
shareholders, while reducing the number of shares in issue to 25.2m shares.
The costs involved in implementing the Scheme were £0.4m.

Broadly adjusting the results to take out interest received on the subsequent
return of capital and profits on businesses divested in the period, earnings
per new ordinary share before exceptional items would be 10.1p.

We intend to make an interim dividend payment of 5.0p per share on 3rd July
2000, to the holders of the 25.2m new Diploma ordinary shares on the register
at 5th June 2000.  This payment of £1.3m compares with the £2.3m payment at
the prior half year, which represented 4.5p for each of the 50.3m shares then
in issue.

SPECIALISED DISTRIBUTION

Specialised Distribution comprises the businesses operating in the areas of
Life Sciences, Seals and Components and Interconnect Products.  Although
performance varied in the different business segments, combined Divisional
sales increased by 7% to £30.8m (£28.8m) with operating profits of £4.8m
(£4.7m).


Life Sciences

This business area, centred on Anachem, supplies the Pharmaceutical &
Biotechnology industries with a range of analytical instrumentation,
consumables and related services.

Sales and operating profits were somewhat lower than the comparable period,
primarily due to shortfalls in the sale of capital equipment to the more
established sectors.  The core Pharmaceutical sector, in particular, continues
to be affected by delayed customer expenditure during industry consolidation.
Recent actions to upgrade its product portfolio should put Anachem in an
improved position as market growth resumes.

A positive development has been Anachem's growing presence in the emerging
sector of Bio-instrumentation.  Anachem has quickly built a portfolio of new
instrumentation and software products to service this segment.  This has been
the lead product line in the start up operation in Germany, A1 Biotech, which
is developing well in line with plans.


Seals & Components

Hercules, the principal company in this business area, is a catalogue based
distributor of hydraulic seals and other components, supplied for repair and
maintenance applications into a broad range of mobile machinery markets in
North America, as well as to selected industrial OEM's.

Hercules has achieved a 12.5% growth in sales over the comparable period, and
30% growth in operating profits, within a market which generally has performed
strongly.   The launch of a range of new catalogues in early 2000, along with
associated sales and marketing initiatives, should position Hercules well for
continued growth when the market returns to more normal levels of demand.

In the period, the remaining 7% minority interest in Hercules was acquired.

In the UK, FPE has continued to perform steadily in a tight market.  Again,
considerable time and resources have been invested in the first set of FPE's
UK/European catalogues which were launched in April 2000.


Interconnect

The IS Group, comprising Rayfast and Sommer, and Abacon are distributors of
high performance wiring, thermal shrink fit components and interconnect
products, supplied into high technology applications.

The IS Group has produced modest growth in sales and operating profits over
the comparable period. In Germany, Sommer has performed well in a recovering
German manufacturing sector, delivering sales and profit increases and
establishing a broader geographic coverage in Germany. Rayfast was held back
in the UK by continuing difficult market conditions but made further progress
in selling to a range of continental European territories. Abacon made a small
operating loss following increases in inventory provisions.

More broadly, progress has been made in expanding, with a broader range of
products, into the chosen focus sectors of Aerospace, Motorsport and Defence.


SPECIAL STEELS & BUILDING PRODUCTS

The continuing Special Steels and Building Products companies again showed a
loss at the operating level of £0.5m, compared with a loss of £0.4m in the
comparable period, on sales reduced to £12.4m from £15.8m.


Special Steels

The Special Steels businesses of Henry Whitham, AG Alloys and Carbon & Alloy
Metals all made operating losses in the half year, but showed some improvement
compared with the second half of FY99.

Healthy oil prices combined with modest increases in OPEC oil production have
created improved confidence among the oil majors, but  they are still
exercising caution in their exploration and production investment programmes.
Growth in global capital expenditure on oilfield equipment, is forecast this
year to be only 10-15% above the very depressed levels of last year.

The recovery will vary geographically depending on the relative cost of
extracting the oil as well as on risk levels.  Carbon & Alloy Metals, focused
on Houston-based customers serving the Gulf of Mexico, has already experienced
some improvement and in recent months has moved back into modest
profitability.  By contrast, Henry Whitham and AG Alloys which are more
dependent on the North Sea, are still experiencing reduced levels of demand.
The emphasis remains on cost reduction.

Building Products

Robert Lee contributed £0.2m of operating profit before its divestment in
January 2000 and Williamson Cliff operated at break-even levels over the half
year.


DISCONTINUED BUSINESSES

In October 1999, the sale of the SEI Macro Group was completed for a basic
consideration of £37.5m.  This has generated a surplus over net assets in the
half year of £6.0m from which has been deducted £1.4m of goodwill already
written off to reserves, yielding a net exceptional gain of £4.6m.  £1.6m of
the consideration was retained in an interest bearing escrow account, to be
released in four tranches over a twelve month period.  To date, two of the
payments have been made as scheduled.  Certain assets, principally properties,
with a net book value of £3.3m, were retained in the Group for eventual sale.
There will be an adjustment to the consideration based on completion accounts
when finalised.

In January 2000, the sale of Robert Lee was completed for the sum of £5.2m
with an adjustment for actual net assets following completion.  This sale has
generated an exceptional gain of £1.5m.


PROSPECTS

Following the return of capital, the Group is now more closely focused on a
smaller core of specialised distribution businesses with the potential for
long term profitable growth by supplying expanding sectors of the world
economy.  Growth strategies are being implemented for this new core of
businesses with investments in new products, geographic expansion, e-commerce
and management development, to provide a strong foundation for long term
growth.

With approaching £20m of cash (80p per share), we have the resources to fund
organic growth, as well as the acquisition of suitable complementary
businesses in our core areas.



Christopher Thomas
Chairman


             DIPLOMA HOLDINGS PLC - GROUP PROFIT AND LOSS ACCOUNT

                     Six months ended Six months ended    Year ended
                        31 March 2000    31 March 1999  30 Sept 1999
                        Sales  Profit    Sales  Profit   Sales Profit
                           £m      £m    £m      £m       £m       £m
Continuing operations:                                                
Specialised                                                          
Distribution             30.8     4.8  28.8     4.7     57.9      9.4
Special Steels and                                               
Building Products        12.4   (0.5)   15.8    (0.4)    26.4     (1.6)
Total continuing                                                     
operations               43.2     4.3  44.6     4.3     84.3      7.8
Discontinued                                                         
operations:
Electronic Components       -       -  61.9     0.7    122.5      1.7
Special Steels and                                                   
Building Products         3.7     0.2  18.8     1.4     35.1      2.8
                         46.9          125.3            241.9         
Head office expenses            (0.7)         (0.7)             (1.4)
Operating profit                  3.8           5.7              10.9
Exceptional items:-                                                  
 Disposals:-                                                         
  Surplus of proceeds                                                
  Over net asset value    7.6           2.2              9.3         
  Goodwill previously                                                 
  w/off to reserves     (1.4)             -            (0.2)         
  Profit on disposals     6.2           2.2              9.1         
  Return of capital                                                  
  costs                 (0.4)             -                -
                                                                     
 Properties - write                                                  
 down less profit on                                        
 sales                  (0.4)             -              0.1
                                  5.4           2.2               9.2
Profit before interest            9.2           7.9              20.1
Net interest                                                         
receivable/ ( payable)            1.5         (0.1)               0.1
Profit on ordinary                                                  
activities before tax            10.7           7.8             20.2

                                                                    
United Kingdom                                                       
taxation                (1.3)          (1.6)            (3.4)
Overseas taxation       (0.3)          (0.2)            (0.4)         
                                (1.6)         (1.8)             (3.8)
Profit on ordinary                9.1           6.0              16.4
activities after tax
Minority interests              (0.1)         (0.1)             (0.3)
Profit for the                                                       
financial period                  9.0            5.9              16.1
Dividends                        (1.3)         (2.3)             (4.5)
Retained profit                   7.7           3.6              11.6
                                                                     
Earnings per share:                                                  
On profit for the                                                    
financial period                17.9p         11.5p             32.0p
Elimination of                                                       
exceptional items,
net of tax and                                                       
minorities                     (10.8)         (4.3p)           (18.0p)
Adjusted                         7.1p          7.2p              14.0
Dividends per share             2.5p*          4.5p              9.0p
*The equivalent of the 5p actually to be paid on the new shares of
Diploma PLC
             

              DIPLOMA HOLDINGS PLC - GROUP BALANCE SHEET

                            31 March 2000 31 March 1999 30 Sept 1999
                              £m    £m       £m   £m      £m      £m
                                                                    
Tangible fixed assets       16.7           28.9         21.1        
Intangible fixed assets      1.4              -          0.8    
                                     18.1        28.9            21.9
Current assets                                                      
Stocks                      18.6           45.7        339.8       
Debtors                     20.6           43.9         43.2        
Tax recoverable after more                                          
than one year                -              0.5          -
Cash at bank and in hand    69.2           10.6         24.5        
                           108.4          100.7        107.5        
                                                                    
Creditors - amounts                                                 
falling due within one yr
Bank overdrafts              0.2            3.6          1.7        
Bank loan                    3.0              -          2.9        
Taxation                     4.2            2.8          1.7        
Dividend payable             1.3            2.3          2.2        
Other creditors             12.7           28.3         23.8        
                            21.4           37.0         32.3        
                                                                    
Net current assets                87.0          63.7            75.2
                                                                    
Total assets less current        105.1          92.6            97.1
liabilities
                                                                    
Creditors - amounts                                                 
falling due after more
than one year                                                       
Bank loans                    -             3.0          -          
Taxation                      -             1.1          -          
Provisions                   0.4            0.4          -          
                                   0.4           4.5               -
                                                                    
Net assets employed              104.7          88.1            97.1
                                                                    
Capital and reserves                                                
Called-up share capital            2.5           2.5             2.5
Capital redemption reserve         0.4           0.4             0.4
Share premium account             12.7          12.5            12.7
Profit and loss account           87.5          70.0            78.3
Shareholders' funds              103.1          85.4            93.9
Minority interests                 1.6           2.7             3.2
                                 104.7          88.1            97.1

                    DIPLOMA HOLDINGS PLC - GROUP CASH FLOW
                                       
                        Six months ended Six months ended Year ended
                           31 March 2000    31 March 1999 30 Sep 1999
                              £m     £m     £m     £m       £m     £m
                                                                
Operating profit                     3.8           5.7            10.9
Depreciation                         1.0           2.0             4.0
Profit on sale of fixed                                          
assets                               0.2           0.1               -
Decrease in stocks                   0.9           1.0             4.9
(Increase) / decrease in                                              
debtors                             (1.6)          3.2             1.8
Increase / (decrease) in                                              
creditors                            1.1          (0.1)           (0.7)
Cash flows from operating                                      
activities                           5.4          11.9            20.9
                                                                     
Investment returns and                                            
servicing of finance
Net interest                                                                   
received/(paid)              1.5         (0.1)              0.1
Dividends paid to minority                                        
interests                     -          (0.1)             -
                                    1.5         (0.2)             0.1
Exceptional item                                                      
Reduction in closure costs             -           0.1             -
Taxation                           (0.5)         (1.6)           (5.6)
Capital expenditure                                                   
Purchase of tangible fixed                                             
assets                      (1.4)         (3.9)           (5.5)
Sale of tangible fixed                                                
assets                       1.1           0.6             0.9
                                  (0.3)         (3.3)           (4.6)
Acquisitions                                                          
Acquisition of subsidiaries                                     (1.3)
and shares                        (1.2)            -  
                                                                     
Disposals                                                             
Disposals proceeds           42.0           2.1            20.1       
Net (cash)/overdrafts in                                              
disposals                    1.6             -            (2.2)
                                   43.6           2.1            17.9
Equity dividends paid              (2.3)         (5.0)           (7.3)
Cash flows before financing        46.2           4.0            20.1
                                                                     
Financing                                                             
Purchase of own share                                                 
capital                             -           (0.1)           (0.1)
                                                                     
Movement in cash in period         46.2          3.9            20.0
                                  
Cash at beginning of period  24.5           6.6             6.6       
Overdrafts at beginning of                                                 
period                      (1.7)         (3.8)           (3.8)
Bank loans at beginning of                                            
period                      (2.9)         (2.8)           (2.8)
Net funds at beginning of                                       
period                             19.9          -              -
                                                                     
Currency translation                                                  
variance                          (0.1)           0.1           (0.1)
                                                                     
Cash at end of period        69.2          10.6            24.5       
Overdrafts at end of period  (0.2)         (3.6)           (1.7)           
Bank loans at end of period  (3.0)         (3.0)           (2.9)           
Net funds at end of period          66.0           4.0            19.9
                                                                      
Notes to the Interim Accounts

1.   These accounts are for Diploma Holdings PLC (previously named Diploma
 PLC). Under the Scheme of Arrangement which came into effect after 31st March
 2000, the new Diploma PLC acquired Diploma Holdings PLC.


2.  Reconciliation of movement in shareholders' funds

                     Six months ended   Six months ended    Year ended
                        31 March 2000      31 March 1999  30 Sept 1999
                                  £m             £m             £m
Retained profit                  7.7            3.6           11.6
Purchase of own share              -           (0.2)               
capital                                                      (0.1)
Goodwill written back on         1.4              -            0.2
disposals
Currency translation             0.1            0.1            0.2
variances
Proceeds of share issue            -              -            0.1
                                 9.2            3.5           12.0
                                                                  
                                                                  
Shareholders' funds at          93.9           81.9           81.9
beginning of period
                                                                  
Shareholders' funds at end     103.1           85.4           93.9
of period


3.   This interim report is unaudited, has not been reviewed by the auditors
 and has been prepared using the accounting policies set out in the Annual
 Report and Accounts for the year ended 30 September 1999.  The financial
 information for the full year 1999 has been extracted from the statutory
 accounts of the Group on which the auditors gave an unqualified report.  A
 copy of those accounts has been filed with the Registrar of Companies.

4.   Post balance sheet event
 On 25th April 2000, Diploma Holdings PLC paid £50.3m to its shareholders by
 a return of capital.
 
 

     Diploma PLC's Registered Office is at 20 Bunhill Row, London, EC1Y 8UD.
Tel: [phone]  Fax: [phone]. Registered Number 3899848