discoverIE Group Shares Slide: Reports Solid Q3, Acquisition Strategy Continues

discoverIE Group plc (LSE: DSCV) shares fell around 0.9% at the open on Monday after the company released its Q3 trading update, showcasing a period of consistent growth and strategic expansion. The company's focus on customised electronics continues to resonate in the market.

Group sales saw a 5% increase at constant exchange rates (CER) and a 1% organic rise, demonstrating steady performance. Orders increased by 9% at CER and 4% organically, resulting in a book-to-bill ratio of 1.03x, indicating healthy demand exceeding current sales.

The Controls operating unit, previously lagging behind other units, exhibited improved sales and order trends compared to the first half of the year, with organic orders now surpassing last year's figures. This recovery signals a potential turnaround in this segment's contribution to overall growth.

Gross margins remained strong, reflecting efficient operations. The company maintained tight control over working capital, and cash generation remained robust. These factors contribute to a solid financial foundation for future growth initiatives.

The current order book provides substantial coverage for the final quarter of the fiscal year. As a result, discoverIE remains confident in achieving full-year adjusted earnings in line with Board expectations. This reaffirms the company's stability and predictability in a dynamic market.

discoverIE has successfully completed the acquisition of Keymat Technology Ltd, expanding its technological capabilities. Approval for the acquisition of Trival Antene d.o.o is currently in progress. The company also maintains a strong pipeline of potential acquisition targets, indicating a commitment to inorganic growth.