discoverIE Group PLC (LSE:DSCV) delivered what CEO Nick Jefferies described as a resilient first-half performance against the backdrop of industry de-stocking.
Highlights for the custom electronics group were the operating margin, which grew to a record 13.8% in the period, putting it well on course for its 15% target, and its prodigious cash flow generation.
Focus on the former allowed the business to increase its underlying profits by 4% at constant currencies to £29.1 million as revenues fell 5% to £211.1 in the six months ended September 30.
Jefferies told investors: "Our flexible operating model allows us to control costs in response to lower production volumes, which along with ongoing efficiency initiatives and accretive acquisitions, has more than offset lower sales."
Over the six months, cash flow surged 46% to £45 million, enabling potential acquisitions worth £70 million in the second half.
Looking ahead, the company remains on track to meet its full-year earnings expectations, supported by a strong £163 million order book and a robust pipeline of acquisition opportunities.
"Third quarter trading to date is in-line with our expectations with orders run rate ahead of sales and ahead of the second quarter," discoverIE said.