discoverIE Group plc Trading Update (6495D)
October 11 2018 - 2:00AM
UK Regulatory
TIDMDSCV
RNS Number : 6495D
discoverIE Group plc
11 October 2018
For Release
7.00am, 11 October 2018
discoverIE Group plc
First Half 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 ended 30 September 2018, ahead of publishing its
interim results on 4 December 2018.
Second quarter trading has been strong and the Group remains on
track to deliver full year earnings in line with our
expectations.
Organic sales growth(1) increased from 3% in the first quarter
to 5% in the second quarter, driven by continued strong performance
in the Design & Manufacturing division ("D&M"). This
resulted in Group sales for the first half increasing by 13% CER(2)
with 4% organic growth and 9% from acquisitions. Sales on a
reported basis increased by 12%. Orders in the first half also
increased by 13% CER and 4% organically. The Group order book has
increased by 18% CER year-on-year and by 13% organically,
positioning us well for further growth in the second half of the
year.
In the D&M division, sales in the first half increased by
21% CER and by 5% organically. The benefits of previous design wins
and strong demand from our key target markets generated strong
organic growth during the period in most parts of the division. The
reduction in sales at Santon, following change in its Chinese solar
market, has stabilised and the business has secured a number of
design wins driving good growth in new markets. D&M sales,
which generate over 75% of Group profits, accounted for 61% of
first half Group sales (FY 2017/18: 57%).
In the Custom Supply division, second quarter sales grew by 4%
organically with an improvement in UK trading adding to a good
performance in Europe. For the first half, sales grew by 2% CER and
2% organically.
Group gross margin increased over the prior year, reflecting the
continued focus on products with higher added value.
With a clear organic growth strategy and an active pipeline of
acquisition opportunities, the Board expects to make further
progress throughout the year.
For further information, please contact:
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. Organic growth for the Group is calculated at constant
exchange rates including the equivalent pre-acquisition period of
Santon which was acquired last financial year on 1 February
2018.
2. Growth rates at constant exchange rates ("CER"). The average
sterling rate of exchange weakened 1% against the Euro compared
with the average rate for the same period last year, and
strengthened 3% against both the US Dollar and on average against
the three Nordic currencies.
3. 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.
4. 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 (previously Acal 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.4,000 people and its principal operating
units are located in Continental Europe, the UK, China, Sri Lanka,
India 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 GBP0.4bn. Over the last five years, revenue and
underlying earnings per share have 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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