discoverIE Group (LON: DSCV), which makes customised electronic components for industrial equipment manufacturers, said today that full-year adjusted earnings are running ahead of the Board’s expectations. The FTSE 250 company headlined its first-half trading update “Strong trading momentum driving earnings upgrade”.
The shares were quoted at 890p at 08:25 UK time, up 10p or 1.14% on yesterday’s 880p close. They opened at 906p, touched 917p and dipped to 885p. Monday’s 895p was the highest close of the past three months.
The update covers the first half of the financial year ending the 31st of March. Organic sales, which strip out acquisitions and currency effects, rose 8%, with growth of 6% in the first quarter and 10% in the second.
Magnetics & Controls grew 13% organically, helped by demand in industrial electrification, renewable energy and security. Sensing & Connectivity grew 1%, held back by longer supply lead times in some segments and a tougher prior-year comparison. The company expects it to accelerate in the second half. Total sales rose 13% at constant exchange rates and 14% as reported, based on unaudited management accounts.
Orders rose 22% organically and 30% at constant exchange rates, with Magnetics & Controls up 25% and Sensing & Connectivity up 18%. The book-to-bill ratio, orders received against sales billed, was 1.12, which the company said supports its expectation of good second-half growth.
Gearing, net debt divided by adjusted EBITDA annualised for acquisitions, is put at 1.6x at the 30th of September and is expected to be about 1.8x by the 31st of March after the 3Gmetalworx acquisition, whose regulatory approval is well progressed.
The company’s outlook statement was explicit about the earnings picture:
The positive outlook continues with full year adjusted earnings running ahead of the Board’s expectations and driving strong earnings growth over last year.
discoverIE Group plc
The shares had already risen before the announcement. Yesterday’s 880p close was 33% above the 662p low close of the 10th of July, and Monday’s 895p was a 35% gain.
Interim results are due on the 2nd of December.
