TIDMDSCV
RNS Number : 6997C
discoverIE Group plc
13 October 2022
For Release
7.00am, 13 October 2022
discoverIE Group plc
First Half Trading Update
Further strong organic sales growth and record orderbook
discoverIE Group plc (LSE: DSCV, "discoverIE" or "the Group"), a
leading international designer and manufacturer of customised
electronics for industrial applications , today issues a trading
update for the first six months of the financial year ending 31
March 2023 ("the Period").
The strong organic sales growth reported last financial year
continued in the first half of this year(1) with the Group
continuing on track to deliver full year underlying earnings in
line with the Board's expectations.
Group sales in the Period were 23% ahead of last year at CER(2)
, 26% ahead on a reported basis and 14% ahead organically (3) .
Sales increased by 17% organically in the Magnetics & Controls
division and by 11% organically in the Sensing & Connectivity
division.
Orders were stronger than expected and continued to be ahead of
sales with a book to bill ratio for the Period of 1.07. The
orderbook at 30 September 2022 increased to another record level of
GBP257m (31 March 2022: GBP224m), being 21% higher than a year ago
organically. During the second half, the orderbook level is
expected to begin to normalise as it converts into sales.
Gross margins in the Period continued to be resilient and the
semiconductor sourcing issues flagged last year, impacting two of
our 21 businesses, are gradually improving although supply still
remains constrained.
Despite the ongoing economic challenges in Sri Lanka, our
facility there, which accounts for around 6% of Group sales, has
continued at expected output levels throughout the Period and the
Group continues to provide support to local employees. Construction
has also commenced in Kerala, India, of a new larger production
facility which will supersede our existing plant there next
year.
Our initiatives to reduce the Group's carbon emissions by 50% by
2025 are making good progress. These include the installation of
further solar panels at our Sri Lankan facility, plans to commence
installation of solar panels at our facility in Thailand and the
transfer of certain other plants to renewable sources.
Following the acquisition of CDT in June 2022 and performance
related earnout payments during the Period for Cursor and CPI along
with some targeted increases in working capital to support growth
in the second half of the year, gearing(4) at 30 September 2022 was
0.8x. This is well below the Group's target gearing range of 1.5x
to 2.0x, leaving good headroom for further acquisitions.
With a clear strategy focused on long-term, high quality,
structural and sustainable growth across Europe, North America and
Asia, a diversified customer base, a record order book and a strong
pipeline of acquisition opportunities, the Group 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, Jack Devoy
discoverIE@buchanan.uk.com
Notes
1. Growth rates refer to the comparable prior year period unless stated.
2. Growth rates at constant exchange rates ("CER"). The average
sterling rate of exchange strengthened 1% against the Euro compared
with the average rate for the same period last year and
strengthened 2% on average against the three Nordic currencies
while weakening by 12% against the US Dollar.
3. Organic growth for the Group compared with last year is
calculated at CER and is shown excluding the first 12 months of
acquisitions post completion (CPI in May 2021, Antenova in August
2021, Beacon in September 2021 and CDT in June 2022) .
4. Gearing is defined as net debt divided by underlying EBITDA
(excluding IFRS 16, annualised for acquisitions).
5. 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:
discoverIE Group plc is an international group of businesses
that designs and manufactures 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 has an ongoing commitment to
reducing the impact of its operations on the environment and with
its key markets aligned with a sustainable future, MSCI has awarded
the Group an ESG "A" rating.
The Group employs c.5,000 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.
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END
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(END) Dow Jones Newswires
October 13, 2022 02:00 ET (06:00 GMT)
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