discoverIE Group plc Trading Update (3673P)
October 10 2019 - 2:00AM
UK Regulatory
TIDMDSCV
RNS Number : 3673P
discoverIE Group plc
10 October 2019
7.00am, 10 October 2019
discoverIE Group plc
Trading Update
discoverIE Group plc (LSE: DSCV, "discoverIE" or the "Group"), a
leading international designer, manufacturer and supplier of
customised electronics to industry, today issues a trading update
for the six months ending 30 September 2019 ahead of publishing its
interim results on 28 November 2019.
Trading in the second quarter has continued to be good against
strong comparators and the Group is on track to deliver full year
underlying earnings in line with the Board's expectations.
Group sales increased(1) by 11% CER(2) for the second quarter
and by 9% for the first half (on a reported and CER basis) with
Group gross margin remaining consistent with the prior year.
Organically(3) , Group sales grew by 6% in the second quarter,
building on the 4% growth of the first quarter and resulting in 5%
growth for the first half of the year. This was driven by 12%
second quarter organic growth in the Design & Manufacturing
division ("D&M"), leading to 7% organic growth for the division
in the first half. The D&M division benefits from a diverse
customer base and the focus on our target markets where we continue
to experience growth ahead of the wider market. Custom Supply
division organic revenues in the first half were level with last
year, principally reflecting a higher proportion of sales outside
the target markets. The higher margin D&M division accounted
for 64% of Group sales in the first half, up from 61% at the year
end.
Group orders for the second quarter grew by 7% organically, up
from 3% in the first quarter, leading to first half Group order
growth of 4%. Orders were similarly driven by strong growth in the
D&M division, with Custom Supply division orders being down
slightly. The Group order book at 30 September 2019, of which over
80% is for delivery over the next twelve months, was GBP153m, an
increase of 15% at CER and 11% organically over last year.
Hobart and Positek, which were both acquired in April this year,
are settling in well, with integration progressing as expected.
Both businesses are high quality, high margin custom design
businesses, selling into international markets, and further build
our business in line with our strategic objectives.
With a clear strategy focused on markets that offer long term
sustainable organic growth prospects and an active pipeline of
acquisition opportunities, the Board expects to make further
progress throughout the year.
Enquiries:
discoverIE Group
plc 01483 544 500
Nick Jefferies - Group Chief Executive
Simon Gibbins - Group Finance Director
Instinctif Partners 0207 457 2020
Mark Garraway
James Gray
Notes
1. Growth rates refer to the comparable prior year period unless stated.
2. Growth rates at constant exchange rates ("CER"). The average
sterling rate for the first half weakened 0.4% against the Euro
compared with the average rate for the same period last year,
weakened 6% against the US Dollar and was up 2% on average against
the three Nordic currencies.
3. Organic growth for the Group is calculated at CER and is
shown excluding the first 12 months of acquisitions (Cursor
Controls was acquired last financial year on 17 October 2018);
Hobart and Positek were both acquired on 16 April 2019.
4. This trading update is based upon unaudited management
accounts and has been prepared solely to provide additional
information on trading to the shareholders of discoverIE Group plc.
It should not be relied on by any other party for other purposes.
Certain statements made in this update are forward looking
statements. Such statements have been made by the Directors in good
faith using information available up until the date that they
approved this update. Forward looking statements should be regarded
with caution because of the inherent uncertainties in economic
trends and business risks.
5. The information contained within this announcement is deemed
by the Group to constitute inside information as stipulated under
the Market Abuse Regulation, Article 7 of EU Regulation 596/2014.
Upon the publication of this announcement via Regulatory
Information Service, this inside information is now considered to
be in the public domain.
Notes to Editors:
About discoverIE Group plc
discoverIE Group plc is an international group of businesses
that designs, manufactures and supplies innovative components for
electronic 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 basis, for their ongoing production needs.
This generates a high level of repeating revenue and long term
customer relationships.
By focusing on key markets which are driven by structural growth
and increasing electronic content, namely renewable energy,
transportation, medical and industrial & connectivity, the
Group aims to achieve organic growth that is well ahead of GDP and
to supplement that with targeted complementary acquisitions.
The Group employs c.4,400 people and its principal operating
units are located in Continental Europe, the UK, China, India, Sri
Lanka and North America.
The Group is listed on the Main Market of the London Stock
Exchange and is a member of the FTSE Small Cap Index, classified
within the Electrical Components and Equipment subsector, and has
revenue of over GBP400m. Over the last five years, revenue and
underlying earnings per share have both more than doubled.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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