TIDMDSCV
RNS Number : 0788B
discoverIE Group plc
09 February 2022
For Release
7.00am, 9 February 2022
discoverIE Group plc
Trading Update
Strong trading momentum continues, ahead of Board
expectations
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 covering the four month period to 31 January 2022 (the
"Period").
The strong trading momentum seen in the first half continued
during the Period with a further strengthening of the Group's order
book, and revenue significantly ahead of the prior year period and
two years ago. Accordingly, the Group is on track to deliver full
year underlying earnings for continuing operations ahead of the
Board's previous expectations, despite ongoing supply chain
headwinds.
Group orders(1) in the Period continued to be well ahead of
sales, growing organically(2) by 18% year-on-year and 30% compared
with two years ago. The order book at 31 January 2022 was at a
record level of GBP216m, over 65% higher organically than both a
year ago and two years ago.
Group sales(1) in the Period were 34% ahead of the prior year at
CER(3) , growing organically by 20% year-on-year and 17% compared
with two years ago.
Trading was strong in both of the Group's new operating
divisions announced separately this morning.
For the 10 months ended 31 January 2022, orders for the
continuing Group grew organically by 42% year-on-year and by 32%
compared with two years ago. Sales for the 10-months were 28%
higher at CER and grew organically by 17% and 12% compared with
last year and two years ago.
The Group has made five acquisitions over the last 16 months for
a total consideration of GBP107m on a debt free, cash free basis.
Businesses are performing well, as expected, and integrations are
on track.
In the third quarter of the current financial year, the
disposals of the Group's distribution businesses, Acal BFi and
Vertec SA, were announced, subject to customary approvals. The
disposal of Vertec SA completed in January 2022, and the disposal
of Acal BFi is expected to complete during this quarter. The
Group's focus is therefore now solely on the higher margin design
and manufacturing operations which increases its exposure to
structural growth markets and positively impacts Group operating
margin.
The Group is well-funded with good liquidity and strong cash
flow. Gearing at 31 January 2022 was 0.9x on a proforma basis(4) .
With the Group's target gearing range being 1.5x to 2.0x, there is
significant headroom for further acquisitions and the pipeline of
possible acquisition opportunities remains strong.
With a clear strategy focused on long-term, high quality,
structural growth markets 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 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. Group orders and sales are for continuing operations which
exclude the results of the Acal BFi and Vertec SA businesses
following their disposal announcements.
2. Growth rates refer to the comparable prior year period unless
stated. 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
(Phoenix was acquired in October 2020, Limitor in February 2021,
CPI in May 2021, Antenova in August 2021 and Beacon in September
2021). Organic growth compared with two years ago excludes the
first 24 months of acquisitions so also excludes Sens-Tech acquired
in October 2019.
3. Growth rates at constant exchange rates ("CER"). The average
sterling rate of exchange against the Euro for the period
strengthened by 7% compared with the average rate for the same
period last year, and by 4% on average against the three Nordic
currencies, and by 1% compared with the US dollar rate .
4. Gearing ratio is defined as net debt divided by underlying
EBITDA (annualised for acquisitions). Proforma gearing factors in
the disposal of Acal BFi as if it had completed at the period
end.
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:
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. 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 key markets driven by structural growth and
increasing electronic content, namely renewable energy, medical,
transportation 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's continuing operations employs c.4,500 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 a member of the FTSE250, classified within the
Electrical Components and Equipment subsector.
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