DiscoverIE Group Reports Record Profitability, Revenue Rises, and Acquisition Pipeline Grows

discoverIE Group plc (LSE: DSCV) has announced robust interim results for the six months ended September 30, 2025, showcasing record profitability driven by growing orders and a promising acquisition pipeline.

The company remains on track to deliver full-year adjusted earnings in line with Board expectations.

Headline Numbers:

• Revenue: £216.4m, up 2.5% (3.5% at constant exchange rates (CER)).
• Adjusted Operating Profit: £30.2m, a 4% increase (5% CER).
• Adjusted Operating Margin: 14.0%, up 0.2 percentage points (ppt) (0.3ppt CER).
• Adjusted Profit Before Tax: £25.5m, a 7% increase.
• Adjusted EPS: 19.5p, up 6%.
• Interim Dividend Per Share: 4.05p, a 4% increase.

The results indicated a positive trajectory for discoverIE, driven by organic sales growth in the second quarter and strong cash flow generation. The Group's free cash conversion rate of 104%, significantly exceeding targets, demonstrates efficient financial management.

The company's ability to maintain conversion rates above 100% over the last decade highlights its consistent performance and financial discipline. This strong cash flow provides discoverIE with the flexibility to pursue strategic acquisitions and investments.

discoverIE has also extended its revolving credit facility of £240m to May 2030, and reported a period-end gearing of 1.3x, indicating a solid financial foundation and access to capital for future growth initiatives. Subsequent to the period end, the company signed an accretive bolt-on acquisition for £5.5m, further expanding its capabilities and market presence.

Driver Breakdown:

• Organic Growth: Sales grew 1% organically in Q2 and 0.5% in H1, with orders growing 8% in Q2 and 0.5% in H1.
• Margin Expansion: Adjusted operating margin increased by 0.3ppt at CER to 14.0%.
• Cash Flow: Free cash conversion of 104%, surpassing targets, reflecting efficient cash management.

Nick Jefferies, Group Chief Executive, commented: “discoverIE delivered a good first half performance with record profits, excellent cashflow and a return to organic sales and orders growth.” Jefferies also noted the improved trading momentum and robust pipeline of design wins and acquisition opportunities.

The company's diverse operating units, particularly Sensing, Connectivity, and Magnetics, have demonstrated strong organic growth after a period of customer destocking. The Controls unit, typically a later-cycle business, is expected to follow suit, contributing to overall growth.

discoverIE's order book provides good visibility for the second half of the year and beyond, supported by a strong pipeline of design wins and new opportunities. The company is also poised to benefit from recovering cyclical demand and potentially decreasing interest rates, further bolstering its financial performance.