Shares round-up: rallies and record highs for this pair

The “unstoppable momentum” of deal-making Diploma and a 36th consecutive dividend hike by Cranswick were today celebrated during strong sessions for the growth compounders.

Diploma shares surged by 325p to 6,950p after the controls, seals and life sciences business bolstered guidance for the second time this year, having benefited from favourable conditions in its key markets that include aerospace, defence, nuclear power and data centres.

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Chief executive Johnny Thomson said today’s first-half results showed the company’s ability to balance ambitious earnings growth and disciplined returns - in good times and bad.

The shares have surged from 2,196p in the space of four years, including growth of 22% as the third-best performing FTSE 100 stock since the start of the Iran war at the end of February.

However, analysts at Berenberg continue to see a “route to outsized shareholder returns” after lifting their price target from 7,500p to 9,000p on the back of today’s results.

The half-year figures showed organic revenues growth of 15%, which compares with Diploma’s five-year average of 10%, and an operating margin improvement of 300 basis points to 24.5%.

Acquisitions have been an important part of the success story after 57 deals worth £1.6 billion completed since 2019 collectively generated returns over 20%.

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Flagship businesses now thriving within Diploma’s decentralised model include Chicago’s Windy City Wire, which makes premium low voltage wire and cable.

A step-up in deal activity over the last 12 months has resulted in the addition of 14 new businesses, including four since March, while a 15th is subject to regulatory clearance.

Diploma said the £310 million investment on these businesses is expected to generate annualised operating profit of about £40 million.

It pointed out: “Not only do these new businesses immediately contribute to the top and bottom line, importantly, they unlock opportunities across our three strategic buckets accelerating organic growth.”

Diploma now expects operating profit growth above 30% in the year to September, a 6% upgrade to the City consensus following today’s half-year rise of 33% to £208.9 million.

The new guidance targets organic revenue growth of 12% - up from 9% previously - and for acquisitions announced so far to add 6% to reported growth – up from 3%.

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In its Buy note highlighting Diploma’s “unstoppable momentum”, Berenberg said the sustainable compounding model continued to excel and that a forward price/earnings multiple in the high 20s was more than warranted.

The bank added: “Diploma’s culture and model give us high conviction in the group’s ability to deliver sustainable mid-teens-plus free cash flow per share and earnings growth over the long term.”

Diploma boasts a 25-year record of dividend growth, which is built on a policy of increasing the payout by 5% each year. Today’s interim award of 19.1p is due to be paid on 12 June.

Source: ShareScope. Past performance is not a guide to future performance.

Cranswick extended its dividend run to a 36th year today as the pork, poultry and convenience foods supplier beat City forecasts with a 11.2% rise in annual pre-tax profits to £220 million.

A dividend of 85.5p is due to be paid on 28 August, increasing the total for the year by 11.4% to 112.5p.

Over the last 10 years, Cranswick has delivered average growth in revenue, adjusted profit, earnings per share and dividends of more than 10% a year.

The business, which employs 16,000 people and operates from 23 facilities in the UK, was formed in the early 1970s by farmers in East Yorkshire to produce animal feed.

It now supplies the major grocery multiples as well as the growing premium and discounter retail channels. Revenues rose 9.5% to £3 billion in the year to 31 March.

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Cranswick’s FTSE 250-listed shares today jumped to a record of 5,570p, a rise of 350p and a 13% improvement so far in 2026.

Peel Hunt lifted its price target to 6,100p following the results, while house broker Shore Capital said the “best-in-class” UK food player had delivered another set of outstanding results.

Shore highlighted Cranswick’s “exceptionally strong” balance sheet and said the company’s £56 million plan to increase capacity at its Eye fresh poultry facility in Suffolk by an additional 25% was the “icing on the cake”.

Cranswick has invested more than £560 million in five years, including a record £163 million in 2025/26, as it looks to support growth, resilience and long-term returns. Projects have included the £30 million expansion of two Hull poultry sites and £27 million on the fit out of a houmous facility in Greater Manchester.

Peel Hunt added: “Cranswick has delivered another strong year and is well set to continue given capital spend and business wins.”