DiscoverIE expecting record full-year underlying profits
said in an update on Wednesday that it expects to report record underlying profits and earnings for the year ended 31 March, with full-year results set to come in slightly ahead of board expectations.
The FTSE 250 electronic components company highlighted strong order growth, resilient margins, and ongoing operational efficiency gains as key drivers of its performance.
Underlying operating profit and margin improved for the 10th consecutive year, excluding the impact of the Covid-19 period.
Orders rose 15% organically year-on-year in the fourth quarter, with both divisions contributing to growth, while total orders increased 11% sequentially.
Fourth-quarter sales rose 19% sequentially, but fell 4% organically compared to the same period last year.
The sensing and connectivity division delivered 5% organic growth in the fourth quarter, while magnetics and controls remained down 10%, consistent with the prior quarter due to lingering customer overstocking.
For the full year, revenue was 2% lower at constant exchange rates.
A 7% decline in organic sales was partially offset by a 5% contribution from acquisitions net of disposals.
Sterling strength also weighed on results, reducing reported revenue by 1%, resulting in a 3% year-on-year decline overall.
The company said it expected second-half operating margins to come in comfortably ahead of the 13.8% achieved in the first half, aided by efficiency improvements and a higher quality revenue mix.
DiscoverIE reaffirmed its progress toward its 2028 target of a 15% underlying operating margin.
Free cash flow remained strong, and year-end gearing stood at 1.45x, below the lower end of the company's target range.
With 38 manufacturing sites across 20 countries, including seven in the US, the company emphasised the flexibility and resilience of its supply chain in the current uncertain trading climate.
It said US operations now supported more than half of local demand, with minimal reliance on Chinese imports.
DiscoverIE said it was planning to expand US production capacity to meet rising domestic demand and benefit from supply chain shifts driven by tariffs.
Its management said it was confident in the group's ability to continue delivering resilient performance despite volatile trading conditions, with both organic growth initiatives and acquisition opportunities in the pipeline.
At 0947 BST, shares in DiscoverIE Group were up 1.85% at 551p.
Reporting by Josh White for Sharecast.com.
Disclaimer & Declaration of Interest
The information, investment views and recommendations in this article are provided for general information purposes only. Nothing in this article should be construed as a solicitation to buy or sell any financial product relating to any companies under discussion or to engage in or refrain from doing so or engaging in any other transaction. Any opinions or comments are made to the best of the knowledge and belief of the writer but no responsibility is accepted for actions based on such opinions or comments. Vox Markets may receive payment from companies mentioned for enhanced profiling or publication presence. The writer may or may not hold investments in the companies under discussion.