discoverIE Group PLC (LSE:DSCV) said it remained "on track" to deliver full-year results in line with previous expectations, as its sales performance improved in the past quarter and cash generation continued to be strong.
The custom electronics group said sales in the three months to 31 December, the third quarter of its financial year, were flat year-on-year at constant exchange rates, having been down 4% in the first half.
This reflected a further recovery in organic sales, which were down 3% compared to the 7% decline in the second quarter and 12% in the first.
The recovery was led by the Sensing & Connectivity arm, which returned to organic sales growth in the quarter, while Magnetics & Controls improved on the first half but remained negative.
"With an excellent pipeline of organic and inorganic opportunities and strong cashflow, the Group is well positioned to deliver sustained growth as markets recover," discoverIE said.
Gross profit margins, which grew to a record 13.8% in the first half, were said to have "continued to be robust" as the group kept tight control of operating costs and working capital.
The order book, which ended the first half at £163 million, increased 4%, with the book-to-bill ratio increasing to 1.01 from 0.98, even if orders were down 6% on an organic basis against a strong quarter a year ago.
Post-period end, discoverIE acquired sensor specialist Burster for an initial €30.6 million (£25.9 million) cash, funded from existing debt facilities, plus an earn-out of up to €12.4 million (£10.5 million) which is expected to increase gearing by 31 March 2025 from 1.25x to 1.6x, which the group said was "well within" its target range of 1.5x to 2x.