TIDMDSCV
RNS Number : 3233I
discoverIE Group plc
14 April 2022
For Release
7.00am, 14 April 2022
discoverIE Group plc
Full Year Trading Update
Strong trading continues with full year outturn ahead of
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 for its financial year ended 31 March 2022, ahead of the
announcement of its preliminary results on 14 June 2022.
The Period
Trading in the final two months of the year (the "Period")
continued to be strong and the Group expects to deliver full year
underlying earnings for continuing operations ahead of the Board's
previous expectations.
Group orders(1) in the Period remained well ahead of sales,
growing organically(2) by 13% year-on-year and by 27% compared with
two years ago, driven by widespread strong demand across the
Group's target markets.
Group sales(1) in the Period also grew strongly, increasing
organically by 20% year-on-year and by 22% compared with two years
ago. This was achieved despite ongoing supply chain headwinds, in
particular semiconductor shortages which have delayed sales in two
of our twenty businesses.
Full Year
Group orders for the year were well ahead of sales, growing
organically by 36% year-on-year and by 32% compared with two years
ago. The period end order book of GBP224m was at a record level,
being 62% higher organically than a year ago and 71% higher
organically than two years ago, positioning the Group well for
further organic growth in the new financial year.
Group sales for the year were higher than previously expected,
up 28% at CER(3) (25% higher on a reported basis). Organically,
sales grew by 17% and 13% compared with last year and two years
ago. Trading was strong in each of the Group's two divisions(4) for
both the Period and the Full Year.
The agility of the Group's model and the capabilities of our
employees have enabled our businesses to respond effectively to the
operational challenges caused by COVID-19 and ongoing supply chain
factors, while the effects on the Group of the conflict in Ukraine
have been negligible(5) .
Also during the period, the Group was awarded an "A" rating by
MSCI ESG Research recognising the Group's environmental, social and
governance progress as well as its strong strategic focus on
sustainable technologies in areas such as renewable energy. The
Group is well placed to benefit from increasing sustainability
tailwinds.
The Group is well-funded with good liquidity and strong cash
flow. Following the sale of the Acal BFi distribution business
which completed in the Period, gearing(6) at 31 March 2022 was
0.7x. With the target gearing range being 1.5x to 2.0x, there is
significant headroom for further acquisitions and the pipeline of
opportunities remains strong.
With a clear strategy focused on long-term, high quality,
structural and sustainable 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. Orders and sales are for continuing operations which exclude
the results of the Acal BFi and Vertec SA businesses (the
discontinued operations). The disposals of each of these
distribution businesses were completed during the final quarter of
this financial year ended 31 March 2022.
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 3% compared with the average rate for the same
period last year, and by 5% on average against the three Nordic
currencies, while weakening by 4% compared with the US dollar rate.
For the year ended 31 March 2022, the average sterling rate of
exchange against the Euro strengthened by 5% compared with the
average rate last year, by 2% on average against the three Nordic
currencies, and by 5% compared with the US dollar rate for last
year.
4. On 9 February 2022, the Group announced that, following its
exit from distribution, it had split its remaining division (Design
& Manufacturing) into two divisions, Magnetics & Controls
("M&C") and Sensing & Connectivity ("S&C").
5. discoverIE's direct operational exposure to Russia, Belarus
and Ukraine is very low. All Group companies have ceased sales into
Russia and Belarus and the Group has no companies, facilities or
direct employees in these countries. In the current financial year,
sales to Russia and Belarus represented less than 0.2% of Group
revenues, with no revenue in Ukraine. The Group has no significant
dependency on direct supplies of components or materials from these
countries and is finding alternative sources where necessary.
6. Gearing ratio is defined as net debt divided by underlying
EBITDA (annualised for acquisitions).
7. This trading update is based upon unaudited management
accounts which are subject to finalisation and audit, 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 through its two
divisions, Magnetics & Controls, and Sensing &
Connectivity. 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 and with its key markets aligned with a sustainable
future, MSCI has awarded the Group an ESG "A" rating.
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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