discoverIE Group PLC (LSE:DSCV), the designer and manufacturer of customised electronics for industrial applications, said its new financial year has started well with continued strong growth.
The group added it is well-funded, with a strong balance sheet and cash flow, and has significant funding headroom for further acquisitions.
Supply chain issues and inflation are concerns but management believes they are manageable.
In the year to 31 March 2022, revenue from continuing operations rose 25% to £379.2mln.
Performance in the group’s target markets, which now account for 76% of group sales, continued to be strong. And helped deliver an underlying operating margin of 10.9%, up 3.2 percentage points (ppts) since last year and up 0.7ppts on a continuing basis.
Orders grew by 36% organically compared and by 32% compared with two years ago (i.e. pre-Covid) following the build-up of a strong pipeline of design wins over several years. This resulted in a record order book of £224mln, respectively 62% and 71% higher organically than last year and two years previously.
The group said more than four-fifths of the order book is for delivery within twelve months from the time of order.
But customers also continue to place longer-term orders. Over the course of the new financial year, discoverIE expects the order book level to normalise as it converts into sales.
Profit before tax more than doubled to £25.2mln from £12.0mln the previous year. Underlying profit before tax, which excludes acquisition-related costs, jumped to £37.6mln from £27.2mln.
The full-year dividend was bumped up to 10.8p from the previous year’s payment of 10.15p.
“These results reflect the strength of the discoverIE business model which is performing well in good demand conditions and an inflationary environment and follows a resilient performance through the weaker Covid conditions of the year before. With record growth in orders, sales, order book and underlying earnings per share, which increased by 31%, continuing revenues and earnings are now well ahead of the pre-Covid period,” said Nick Jefferies, the chief executive of discoverIE.
“Following the group's exit during the year from the business of distribution, discoverIE is now solely focused on the design and manufacture of customised electronics for industrial applications; our continuing focus is on achieving organic growth and new design wins in sustainable target markets, together with accretive acquisitions. The Group is well-funded, with a strong balance sheet and cash flow, and has significant funding headroom for further acquisitions,” he added.
“With a clear strategy focused on long-term, high quality, structural and sustainable growth markets across Europe, North America and Asia, a diversified customer base, a record order book and a strong pipeline of acquisition opportunities, the Group is well-positioned to make further good progress in the year ahead,” Jefferies concluded.