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discoverIE confident of making continued progress

A strong performance from the Design & Manufacturing division offset a disappointing December for the Custom Supply division

discoverIE Group PLC -

Customised electronics maker discoverIE Group PLC (LON:DSCV) is on track to deliver full-year earnings in line with the board’s expectations.

In a trading update covering the final three months of 2019 – the third quarter of the group’s financial year – the group said sales were up by 6% year-on-year on a constant exchange rates (CER) basis and 3% on a reported basis. Growth in orders was ahead of sales growth.

Year-to-date, group sales are up 8% on a CER basis and by 7% on a reported basis, with like-for-like sales up 3%, driven by a strong performance from the Design & Manufacturing (D&M) division.

D&M saw its sales increase by 16% year-on-year on a CER basis, representing organic growth of 7%, in line with that seen in the first half of the financial year.

Growth was driven by sales in the renewable energy and medical sectors. D&M orders were in line with sales.

The Custom Supply (CS) division experienced a bit of a hiccup in December with some short-term customer destocking, particularly in general industrial markets in Germany and the UK, which resulted in third-quarter sales being down by 10% organically.

Orders were ahead of sales in the period, however, with a book to bill ratio of 1.06, and January sales and orders have returned to the higher levels achieved in the first half of the year, discoverIE said.

The group noted that its order book at the end of 2019 was up 5% (CER) year-on-year, with more than 80% of those orders for delivery in the next 12 months. Its gross margin in the third quarter improved by one percentage point from a year earlier.

“The group has a clear strategy focusing on the target markets of renewable energy, medical, transportation and industrial & connectivity to create sustainable organic growth. This platform, together with a pipeline of further acquisition opportunities, means that the board is confident of making continued progress,” the trading statement concluded.

Quick facts: discoverIE Group PLC

Price: 560.72 GBX

LSE:DSCV
Market: LSE
Market Cap: £501.6 m
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