REG - discoverIE Group plc - Full Year Trading Update

DiscoverieAnnouncement

19/04/2023 07:00

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RNS Number : 6454W  discoverIE Group plc  19 April 2023

For Release

7.00am, 19 April 2023

 

discoverIE Group plc

 

Full Year Trading Update

 

Strong finish to the year with results ahead of Board expectations

 

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 its financial year ended 31 March 2023,
ahead of the announcement of its preliminary results on 8 June 2023.

 

The Group's positive trading momentum continued through the final quarter with
the Group on track to deliver full year underlying earnings ahead of the
Board's expectations.

 

Group sales for the year were 16% ahead of last year((1)), of which 8% was
organic growth((2)), 5% from acquisitions and 3% from foreign exchange, with
8% organic growth in both divisions. Sales in the fourth quarter continued to
be strong, despite challenging comparators, with year-on-year growth of 8%, of
which 2% was organic growth, 3% from acquisitions and 3% foreign exchange.

 

The order book continues to be at a higher than expected level and in line
with last year, normalising less than previously anticipated as a result of
stronger order intake in Q4, which was 16% higher sequentially than in Q3, and
in line with sales. As previously guided, during the second half the order
book has been normalising from the record level at 30 September 2022 as it
converts into sales and we expect this to continue in the new year. The strong
order book provides good visibility of demand heading into FY24.

 

Gross margins remain robust and the semiconductor sourcing issues flagged last
year, impacting two of our 21 businesses, are mostly resolved with
availability at required levels and lead-times returned to near normal levels.
Operational performance has also continued to be strong, with the Group
benefitting from the agility provided by its broad footprint and decentralised
model.

 

The Group is well-funded with gearing((3)) at 31 March 2023 of c.0.9x and
there remains good headroom for further growth investment within the target
gearing range of 1.5x to 2.0x. The Group's acquisition pipeline has continued
to build and presents a number of good potential opportunities coming into the
new financial year.

 

With a clear strategy focused on long-term, high quality, structural and
sustainability-aligned growth markets across Europe, North America and Asia, a
diversified customer base, a strong order book and pipeline of acquisition
opportunities, the Group is well positioned to make further progress.

 

 

 

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 (mailto:discoverIE@buchanan.uk.com)

 

Notes

 

1.     Growth rates refer to the comparable prior year period unless
stated.

 

2.     Organic growth for the Group compared with last year is calculated
at constant exchange rates ("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, CDT in June 2022 and Magnasphere in January 2023).
In calculating CER for the year ended 31 March 2023, the average sterling rate
of exchange weakened 2% against the Euro and 12% against the US Dollar
compared with the average rates for last year, while strengthening 2% on
average against the three Nordic currencies. For the final quarter ended 31
March 2023, the average sterling rate of exchange weakened 5% against the Euro
and 10% against the US Dollar compared with the average rates for the same
period last year, while strengthening 1% on average against the three Nordic
currencies.

 

3.     Gearing ratio is defined as net debt divided by underlying EBITDA
(annualised for acquisitions).

 

4.     This trading update is based upon unaudited management accounts
which are subject to finalisation and audit, 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 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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