discoverIE confident on order book and pipeline of acquisition opportunities
- The voyage of discoverIE ... back on course and full steam ahead
- DiscoverIE upgraded after recent acquisitions
- discoverIE Group 'very strong second half across all of our operations'
Quick facts: discoverIE Group PLC
Price: 1178 GBX
Market Cap: £1.11 billion
About the company
discoverIE (LSE: DSCV) is an international group of businesses that designs, manufactures and supplies highly differentiated, innovative components for electronics applications.
The Group provides application-specific components to original equipment manufacturers (“OEMs”) internationally. With in-house engineering capability, we are able to design components to meet customer requirements, which are then manufactured and supplied, usually on a repeating revenue basis, for their ongoing production needs. This generates a high level of recurring revenue and long term customer relationships.
How it is doing
DiscoverIE Group PLC has come a long way since it changed its name from Acal PLC in November 2017.
The name change signified the transformation of the group over the preceding years into a higher margin business focused on design and manufacturing.
The name stands for “discover innovative electronics” so it is not just a trendy mixed-case name designed to irritate journalists and grammar purists.
At the time of the name change, the company was valued at around £160mln; less than four years later it is close to being a billion-pound company, with a market capitalisation of £920mln.
DiscoverIE Group PLC splashed out £77mln on acquisitions in the US and UK to strengthen and broaden its presence in the customised electronic components sector.
US firm Logic PD Inc (known as Beacon) makes embedded computing boards and is being acquired for £80.5mln (£58.8mlm) cash.
discoverIE Group PLC has the potential to reach a share price of 1,250p within four years, according to broker Shore Capital, as it looks increasingly likely the group will meet its targets.
“We expect the company’s consistent double-digit EPS growth to continue as end markets recover post-pandemic and highlight the group’s increasing exposure to attractive end markets.
What the brokers say
DiscoverIE PLC has been given a new price target of 1,220p by broker finnCap after its two recent acquisitions and cash call.
FinnCap has also upgraded its earnings forecasts following the acquisitions - Beacon and Antenova – that it says fit entirely with the company's long-established growth strategy.
DiscoverIE’s core target end-markets are Renewable Energy, Transportation, Medical and Industrial & Connectivity, it says and Beacon and Antnovas will create further organic growth opportunities and significantly increase the footprint in North America, said the broker.
What management says
discoverIE Group's (LON:DSCV) Nick Jefferies speaks to Proactive London about their preliminary results for the year ended 31 March 2021. Jefferies has hails a strong second half recovery with a record order book and excellent cash generation.
Second half orders were up 12% organically and 40% above the first half. He says trading has been 'very resilient' with a record year end order book, up 11% organically to £181m.
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