REG - discoverIE Group plc - Q3 Trading Update

DiscoverieAnnouncement

30/01/2025 07:00

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RNS Number : 1704V  discoverIE Group plc  30 January 2025

For Release

7.00am, 30 January 2025

 

discoverIE Group plc

Q3 Trading Update

 

 

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 three months ended 31 December 2024 ("the Period").

 

The Group remains on-track to deliver full year underlying earnings in line
with the Board's expectations.

 

Group sales for the Period were flat year-on-year at CER((1)). Organic((2))
sales performance continued to recover being 3% lower than last year (from 7%
lower in the second quarter and 12% lower in the first quarter). At a
divisional level, S&C continued to lead the recovery cycle with a return
to organic sales growth in the Period whilst M&C remains negative, albeit
improving over the first half.

 

Gross margins in the Period continued to be robust with operating costs and
working capital again tightly managed.

 

The order book increased by 4% during the Period and the book-to-bill ratio
increased to 1.01 from 0.98 in the first half. Orders were down 6% organically
against a strong prior year comparator.

 

Since the Period end and as previously announced, the Group has acquired
Burster, a designer and manufacturer of specialist sensors, for an initial
cash consideration of €30.6m (£25.9m) funded from the Group's existing debt
facilities, plus an earn-out of up to €12.4m (£10.5m).

 

The Group's cash generation has continued to be strong and on completion of
the acquisition, the Group's consensus gearing((3)) at 31 March 2025 increases
from 1.25x to 1.6x, well within the Group's target range of 1.5x to 2x.

 

With an excellent pipeline of organic and inorganic opportunities and strong
cashflow, the Group is well positioned to deliver sustained growth as markets
recover.

 

 

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

 

Burson
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. In calculating CER for the Period, the average Sterling rate of
exchange strengthened 4% against the Euro compared with the average rates for
last year, 3% against the US Dollar and 5% on average against the three Nordic
currencies, resulting in a 3% sales reduction for the Period.

 

2.     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 (Silvertel in August 2023, 2J Antennas Group ("2J") in September
2023 and Shape, DTI and IKN in Q4 2023/24, Hivolt in July 2024) and excluding
last year's announced disposal of the Santon solar business unit.

 

3.     Gearing is defined as net debt divided by underlying EBITDA
(excluding IFRS 16, annualised for acquisitions).

 

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 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, high quality customer relationships.

 

With a focus on key markets driven by structural growth, increasing electronic
content and sustainability, namely medical, electrification of transportation,
renewable energy, security 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 in order 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 FTSE 250, classified within the Electrical Components and
Equipment subsector.

 

 

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