For
Release
7.00am, 6 February 2024
discoverIE Group
plc
Trading
Update
Full year performance on
track, positive order momentum
discoverIE Group plc (LSE: DSCV,
"discoverIE" or "the Group"), a leading
international designer and manufacturer of customised electronics
to industry, today issues a trading update
for the four months ended 31 January 2024 ("the
Period").
The Group continues to make good
financial and strategic progress and is on track to deliver full
year underlying earnings in-line with the Board's
expectations.
Orders in the Period grew by 3%
organically1 year-on-year with a similar sequential
growth and were in line with sales. This is the first growth in
orders since the quarter ending September 2022.
Group sales in the Period were 4%
lower at CER following two years of strong growth when sales
increased by around 50%. Revenue growth of 3% from
acquisitions partly offset a 7% reduction in organic sales as
customers processed their inventory reductions, as expected.
Performance was similar in both divisions. Sales at the start of Q4
have returned to organic growth, with margins continuing to be
robust.
Year-to-date ("YTD") Group sales
increased by 1% at CER comprising 3% from
acquisitions offset by organic sales being 2% lower. With strong
gross margins and tight control of operating expenses, the Group
continues to perform well through the cycle with YTD underlying
profit higher than last year organically and augmented by the
contribution from acquisitions.
Design wins increased strongly in
the third quarter contributing to YTD growth of around 25%, with
90% being in our target growth markets. Design wins are a key
driver of future organic revenues and we have a strong pipeline of
opportunities in development.
The acquisitions of Silvertel in
August 2023 and 2J Antennas in September 2023 are performing as
expected with integrations proceeding as planned. Cash flow
continued to be strong with gearing reducing to 1.5x at 31 December
2023 (30 September 2023: 1.6x).
In January 2024, the Group made a
small, higher margin bolt-on acquisition for the Noratel magnetics
cluster in North America for a mid-single digit EBIT multiple.
With a clear strategy focused on
structural and sustainable international growth, a diversified
customer base, a healthy order book and record pipeline of design
wins and acquisition opportunities, the Group has a resilient
business model that, despite varied market conditions, is well
positioned to make further good progress on its key priorities.
For further information, please
contact:
discoverIE Group plc
01483 544
500
Nick Jefferies
Group
Chief Executive
Simon Gibbins
Group Finance Director
Lili Huang
Head of Investor Relations
Buchanan
020 7466 5000
Chris Lane, Toto Berger
discoverIE@buchanan.uk.com
Notes
1. Growth rates refer
to the comparable prior year period unless stated.
Organic growth for
the Group's continuing operations compared with last year is
calculated at constant exchange rates ("CER") and is shown
excluding the first 12 months of acquisitions post completion
(Magnasphere in January 2023, Silvertel in August 2023 and 2J in
September 2023). In calculating CER, the
average Sterling rate of exchange strengthened 1% against the Euro
compared with the average rate for the same period last year, 5%
against the US Dollar and 7% on average against the three Nordic
currencies.
2. 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 design and manufacture
innovative electronic components for industrial
applications.
The Group provides
application-specific components to original equipment manufacturers
("OEMs") internationally through its two divisions, Magnetics &
Controls, and Sensing & Connectivity. 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
customer relationships.
With a focus on sustainable key
markets driven by structural growth and increasing electronic
content, namely renewable energy, medical, electrification of
transportation and industrial automation & connectivity, the
Group aims to achieve organic growth that is well ahead of GDP and
to supplement that with complementary acquisitions. The Group is
committed to reducing the impact of its operations on the
environment with an SBTi aligned plan to reach net zero. With its
key markets aligned with a sustainable future, the Group has been
awarded an ESG "AA" rating by MSCI and is Regional (Europe) Top
Rated by Sustainalytics.
The Group employs c.4,500 people
across 20 countries with its principal operating units located in
Continental Europe, the UK, China, Sri Lanka, India and North
America.
discoverIE is listed on the Main
Market of the London Stock Exchange and is a member of the FTSE250,
classified within the Electrical Components and Equipment
subsector.