RNS Number : 0716P
discoverIE Group plc
14 October 2021
7.00am, 14 October 2021
discoverIE Group plc
First Half Trading Update
Continuing strong trading momentum and further strategic
discoverIE Group plc (LSE: DSCV, "discoverIE" or the "Group"), a
leading international designer, manufacturer and supplier of
customised electronics to industry, today issues a trading update
for the six months ended 30 September 2021.
The strong order growth(1) reported in the second half of the
last financial year and the first quarter of the current financial
year has continued. Revenue for the first half remained well ahead
of both the Covid-impacted prior year and the pre-Covid year ended
31 March 2020. Together with continued strong operational execution
and despite foreign exchange headwinds in the period, Group
performance for the first half is ahead of the Board's
Group sales for the period were 23% ahead of last year at CER(2)
. This represents organic (3) growth of 15% over last year and 8%
compared with two years ago. Orders remained well ahead of sales in
the period, with organic growth of 64% and 34% respectively,
against last year and two years ago. Gross margins have remained
firm. Growth was similar in both divisions and resulted in a record
order book at the end of the period, being 71% higher organically
than last year and 53% higher organically than two years ago.
The Group is managing widespread supply chain challenges
effectively and, despite some limiting of growth rates in the first
half, continues to grow strongly. Similar conditions are expected
in the second half. At the Group's facilities in India, Sri Lanka
and Mexico, production capacity remains at near-normal levels
despite ongoing local Covid-related social distancing restrictions.
In Nogales, Mexico, production has begun as scheduled at the
Group's new, larger facility and, to satisfy growing demand,
capacity is being expanded in the US and Germany.
We are continuing to make good progress with our initiative to
reduce the Group's carbon emissions by 50% including the
commencement during the period of solar panel installation at our
Sri Lankan facility, one of the largest in the Group.
The Group has acquired five businesses(3) over the last 12
months for a total up front consideration of GBP109m: all are
making excellent progress and contributing well to the Group's
strong trading performance. The acquisition pipeline remains
Following the recent acquisitions of Beacon and Antenova and the
GBP55m equity placing completed in early September, proforma
gearing(4) , which at 31 March 2021 was 1.6x, has reduced to 1.4x
at the end of September 2021, below the Group's target gearing
range of 1.5x to 2.0x, leaving headroom for further acquisitions.
Continued strong cash generation and a disciplined approach to
portfolio management will further support the Group's capability to
invest in long term growth initiatives.
With a clear strategy focused on long-term, high quality,
structural growth markets(5) 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 Investor Relations
Buchanan 020 7466 5000
Chris Lane, Toto Berger, Jack Devoy
1. Growth rates refer to the comparable prior year period unless stated.
2. Growth rates at constant exchange rates ("CER"). The average
sterling rate of exchange strengthened 4% against the Euro compared
with the average rate for the first half last year and strengthened
10% against the US Dollar while remaining in line on average
against the three Nordic currencies.
3. Organic growth for the Group compared with last year is
calculated at 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.
4. Gearing is defined as net debt divided by underlying EBITDA
(excluding IFRS 16, annualised for acquisitions). Proforma gearing
is what the gearing would have been had acquisitions and equity
placings been completed at that time.
5. Target markets are renewable energy, medical, transportation and industrial & connectivity.
6. This trading update is based upon unaudited management
accounts 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:
discoverIE Group plc is an international group of businesses
that designs, manufactures and supplies innovative components for
The Group provides application-specific components to original
equipment manufacturers ("OEMs") internationally. 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
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, while its key markets are aligned with a sustainable
The Group employs c.5,000 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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(END) Dow Jones Newswires
October 14, 2021 02:00 ET (06:00 GMT)
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