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discoverIE Group achieves robust sales growth as operational efficiencies drive strong results

Last updated: 14:52 15 Mar 2024 GMT, First published: 10:41 30 Jan 2024 GMT

Snapshot

  • DiscoverIE back on growth path suggest brokers
  • News analysis: A closer look at discoverIE's strategy and latest acquisition
  • discoverIE shares ‘offer good entry point’, says Liberum
  • DiscoverIE Group CEO hails profit increase
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About the company

discoverIE Group PLC is an international group of businesses that design and manufacture innovative electronic components for industrial applications.

The group provides application-specific components to original equipment manufacturers (OEMs) internationally through its two divisions, Magnetics & Controls, and Sensing & Connectivity.

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 customer relationships.

How it is doing

15 Feb 2024

Components specialist discoverIE’s half-year numbers showed the first positive the first order growth and positive book-to-bill since September 2022, notes HSBC.

Furthermore, design wins accelerated in the last four months as year-to-date growth reached 25%.

Revenues should continue to grow from here while margins should continue to expand.

Looking ahead, HSBC believes that consensus estimates do not yet factor in the company's 2025 operating margin target.

06 Feb 2024

The trading update from discoverIE Group PLC (LSE:DSCV) was "encouraging" as, despite the slightly weaker sales than expected, "all the key growth drivers are pointing in a positive direction", said analysts at Stifel. 

Third-quarter results were "solid ... in what are still very mixed demand conditions, while establishing strong foundations for a return to stronger growth next financial year", they added.

06 Feb 2024

discoverIE Group PLC said it is on track to deliver full-year earnings in line with board expectations, with the first growth in orders since the September quarter of 2022. 

The designer and manufacturer of customised electronics reported 3% organic growth in orders in the four months to the end of January compared to the same period a year earlier, with similar growth compared to the previous quarter.

Insight: News analysis: A closer look at discoverIE's strategy and latest acquisition

01 Aug 2023

discoverIE Group PLC, the specialist electronics company, has announced the acquisition of Wales-based telecom components group Silver Telecom (Silvertel) for an initial £21 million, with up to a further £23 million in earn-outs. The acquisition is part of discoverIE's ongoing strategy to expand its differentiated, growth-focused electronics group.

Silvertel, based in Newport, focuses on high-speed internet connectivity modules. The company generated sales of £13.5 million and profits of £4.4 million in the year to the end of February 2023.

What the brokers say

15 Mar 2024

discoverIE Group plc’s current share price softness offers a “good entry point” for the OEM components manufacturer, reckon Liberium analysts.

Liberum maintained a ‘buy’' rating on discoverIE stock with a 980p price target, noting that the London-listed group is “on track to meet FY24 underlying earnings expectations”.

“The continued strong level of design wins provides a good pipeline for organic revenue growth,” said analysts.

What management says

05 Dec 2023

 

discoverIE Group PLC (LSE:DSCV) CEO Nick Jefferies speaks to Thomas Warner from Proactive London after the electronic component manufacturer released interim results for the six months to 30 September 2023 showing an increase in profitability. Jefferies gives an overview of the figures, highlighting a 17% increase in operating profits on 4% sales growth.

This success translates into an 8% rise in both profit before tax and earnings per share, alongside a significant 25% boost in cash flow. Jefferies also highlights the company's sustained growth trajectory, having expanded by over 50% in the past three years. He attributes this success to a balanced strategy of driving top-line growth and achieving operational efficiencies as the company scales up.

DiscoverIE Group CEO hails profit increase

  discoverIE Group PLC (LSE:DSCV) CEO Nick Jefferies speaks to Thomas Warner from Proactive London after the electronic component manufacturer released interim results for the six months to 30 September 2023 showing an increase in profitability. Jefferies gives an overview of the figures,...

on 5/12/23