discoverIE Group plc (LON:DSCV) saw profits more than treble last year as the customised electronics supplier and manufacturer reaped the rewards of its efficiency and cost reduction programme.
The London-listed firm implemented its efficiency plan in the 16/17 financial year which saw it shut its unprofitable Spanish business, trim management numbers and make a series of improvements to its infrastructure and manufacturing processes.
WATCH: discoverIE enjoys year of 'good progress' with strong organic growth
Despite the changes, discoverIE’s management hasn’t lost sight of sales, with revenues climbing 15% in the year ended 31 March 2018 to £387.9mln (2017: £338.2mln).
Much of that growth came from the design and manufacturing business which now accounts for more than three-quarters of the group’s total profits.
Costs as a percentage of sales fell in the year to 27.9% (2017: 30.5%). Coupled with the higher revenues, this allowed profits to soar 229% to £15.8mln (2017: £4.8mln). On an underlying basis, pre-tax profits climbed 27% to £21.9mln (2017: £17.2mln).
As a result of the strong performance, discoverIE – formerly known as Acal – increased its full-year dividend by 6% to 9.0p (2017: 8.5p).
Record year-end order book
“As expected, this has been a year of good progress,” said chief executive Nick Jefferies.
“The Design & Manufacturing division has delivered strong organic growth in revenue and profits and in Custom Supply, the efficiency programme of last year has delivered much improved profitability.”
He added: “The group order book grew by 12% to reach a new record level of £122mln and the value of new projects won during the year continued to grow well.”
Looking ahead, Jefferies said that trading in the opening couple of months of the new year has started well with continuing growth in orders and sales.