RNS Number : 3732O
discoverIE Group plc
09 February 2021
7.00am, 9 February 2021
discoverIE Group plc
Good trading momentum continues
discoverIE Group plc (LSE: DSCV, "discoverIE" or the "Group"), a
leading international designer, manufacturer and supplier of
customised electronics to industry, today issues a trading update
covering the four month period to 31 January 2021.
Trading has continued to strengthen with underlying earnings for
the full year ending 31 March 2021 expected to be towards the upper
end of market expectations.
Order intake in the period has been strong, with both Group and
divisional orders increasing by 10% organically(1) over the prior
year's pre COVID-19 levels and with a Group book to bill ratio of
1.17:1. This represents a significant improvement on the first half
of the year (H1 Group orders: 18% lower; book to bill: 0.91:1), as
the COVID-19 recovery strengthened and trading momentum increased.
The Group order book has increased to GBP162m, 2% ahead of last
year at CER(2) and a sequential increase of 14% organically since
the end of the first half.
Sales also showed positive momentum: Group average monthly sales
increased by 4% compared with the first half, while sales in our
target markets, which account for 69% of Group sales, grew well
ahead of other markets and returned to organic growth. As a result,
Group sales for the period were 5% lower year-on-year organically,
having been 8% lower in the first half. This improvement was
evident across both divisions: sales in D&M, which were 67% of
Group sales, reduced by 3% organically (H1: 7% lower) while in
Custom Supply, sales reduced by 10% organically (H1: 11% lower).
During the period, gross margins have remained firm and tight
control of operating expenses has continued.
Year to date, Group orders and sales are lower by 5% CER, by 4%
on a reported basis and by 7% organically.
Phoenix America Inc ("Phoenix"), which was acquired in October
2020, is performing well and in line with expectations. Its sales
were ahead of last year and its integration into the Variohm Group
is progressing well. The acquisition of Limitor GmbH ("Limitor")
which was announced in December 2020, is expected to complete this
The Group remains well funded with good liquidity. Cash flow
during the period has continued to be strong with gearing(3) at the
period end reducing to 1.1x from a proforma gearing (including
Phoenix) of 1.2x at 30 September 2020. Including the Limitor
acquisition, proforma gearing at the period end was 1.35x, below
our target gearing range of 1.5x to 2.0x with significant headroom
remaining for further acquisitions.
The recovery through the second half to date and the strong
order momentum provides a solid base from which to return to Group
wide organic sales growth and underpins the expected progress into
the next financial year. With a clear strategy focused on long-term
high quality growth markets, a strong funnel of design wins and
acquisition targets, the Group is well positioned to make further
For further information, please contact:
discoverIE Group plc 01483 544 500
Nick Jefferies Group Chief Executive
Simon Gibbins Group Finance Director
Buchanan 020 7466 5000
Chris Lane, Toto Berger, Charlotte Slater
1. Growth rates refer to the comparable prior year period unless
stated. Organic growth for the Group is calculated at CER and is
shown excluding the first 12 months of acquisitions post completion
(Sens-Tech was acquired on 16 October 2019 and Phoenix on 14
2. Growth rates at constant exchange rates ("CER"). The average
sterling rate of exchange against the Euro for the period weakened
by 5% compared with the average rate for the same period last year,
and by 5% on average against the three Nordic currencies, while
strengthening by 3% compared with the US dollar rate for last
3. Gearing ratio is defined as net debt divided by underlying
EBITDA (annualised for acquisitions). Gearing of 1.0x was reported
at H1 2020/21 with proforma gearing of 1.2x including the
acquisition of Phoenix in October 2020.
4. This trading update is based upon unaudited management
accounts and has been prepared solely to provide additional
information on trading to the shareholders of discoverIE Group plc.
It should not be relied on by any other party for other purposes.
Certain statements made in this update are forward looking
statements. Such statements have been made by the Directors in good
faith using information available up until the date that they
approved this update. Forward looking statements should be regarded
with caution because of the inherent uncertainties in economic
trends and business risks.
Notes to Editors:
About discoverIE Group plc
discoverIE Group plc is an international group of businesses
that designs, manufactures and supplies innovative components for
The Group provides application-specific components to original
equipment manufacturers ("OEMs") internationally. By designing
components that meet customers' unique requirements, which are then
manufactured and supplied throughout the life of their production,
a high level of repeating revenue is generated with long term
With a focus on key markets driven by structural growth and
increasing electronic content, namely renewable energy,
transportation, medical and industrial & connectivity, the
Group aims to achieve organic growth that is well ahead of GDP and
to supplement that with targeted complementary acquisitions. The
Group has an ongoing commitment to reducing the impact of its
operations on the environment, while its key markets are aligned
with a sustainable future.
The Group employs c.4,200 people and its principal operating
units are located in Continental Europe, the UK, China, Sri Lanka,
India and North America.
The Group is listed on the Main Market of the London Stock
Exchange and is in the top quartile of the FTSE Small Cap Index,
classified within the Electrical Components and Equipment
subsector, and has revenues of over GBP450m.
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(END) Dow Jones Newswires
February 09, 2021 02:00 ET (07:00 GMT)