DiscoverIE Group plc delivered an “upbeat” trading update this week, according to equities analysts at Liberum.
Liberum was impressed by a better-than-expected order book driven by stronger-than-expected fourth-quarter group order intake.
With “better demand visibility for first-quarter 2023”, analysts raised their earnings forecast by 3%, 2% and 4% for the following full-year time frames.
Cash flow generation should provide £65mln of dry powder for M&A deals over the following two years, without taking net debt-to-EBITDA gearing above 1.5x.
“In our view M&A will remain key to maintaining the group’s recent track record of achieving above-GDP organic revenue growth as well as beating and upgrading its margin targets,” said Liberum.
“The group operates in markets that are still highly fragmented, and in our view balance sheet deleveraging will create financial headroom for further growth-enhancing and margin accretive M&A.”