discoverIE Group PLC back on track as organic growth picks up

What discoverIE does DiscoverIE Group PLC () designs, manufactures and supplies highly differentiated, innovative components

What discoverIE does

DiscoverIE Group PLC () designs, manufactures and supplies highly differentiated, innovative components for electronics applications.

The group – which changed its name from Acal in 2017 – provides application-specific components to original equipment manufacturers (OEMs) internationally using its in-house engineering capability.

It focuses on key markets which are driven by structural growth and increasing electronic content, namely renewable energy, transportation, medical and industrial connectivity.

It employs around 4,000 people and its principal operating units are located in Continental Europe, the UK, China, Sri Lanka, India and North America.

 

How it is doing

discoverIE Group said it returned to organic revenue growth in half-year to end September and recently had seen orders running ahead of sales.

Momentum was checked by the coronavirus (COVID-19) pandemic but the second half of its financial year started well enough for the company to resume dividend payments.

Revenue in the first half eased to £217.9mln from £232.0mln in the corresponding period of last year.

Like-for-like (LFL) sales were down 8% year-on-year, with the group’s Design & Manufacturing (D&M) division seeing a 7% decline in LFL sales while the Custom Supply division’s sales were 11% lower than a year earlier.

 

What the boss says: NIck Jefferies, chief executive 

The second half has started well with orders ahead of sales and up on last year.

“With the group’s continued focus on the structural growth markets of renewable energy, medical, electrification of transportation and industrial & connectivity, we expect to continue to perform ahead of wider markets and make further progress on our strategic prioritie.

 

Latest video

 

What the brokers say

DiscoverIE has been tipped to increase in value by some 80% in the coming years as it benefits from the rising uptake of electrification in industrial applications.

Stockbroker Shore Capital started coverage with a ‘buy’ recommendation and said the shares have the potential to reach 1,250p within four years if the company achieves its FY2025 targets.

“We believe that the company is well placed to benefit from the long-term trend of increased electrification in industrial applications. This has been driven by a rise in automation, which we believe may be accelerated by COVID-19, given the sharp fall in employment in the global manufacturing sector.”