DiscoverIE lifts dividend as first-half profits rise

Shares in discoverIE rose strongly on Tuesday after the industrial electronics group lifted its interim dividend and delivered a 7% increase in first-half underlying profits on the back of better-than-expected margins.

The company reported an underlying pre-tax profit of £25.1m for the six months to 30 September, up from £23.5m the year before, as the underlying operating margin increased to 12.9% from 11.5%.

"We are making excellent progress towards our margin targets with a 1.4ppts increase in underlying operating margin, reflecting the leverage in our technology clusters, that is enabling efficiencies and creating value from acquisitions," said chief executive Nick Jefferies.

The company is targeting an underlying operating margin of 13.5% by year ending March 2025 and 15% in the medium term.

Nevertheless, as previously reported, revenues were flat year-on-year in the first half at £222m, rising 4% at constant exchange rates (CER), against a strong comparator with last year's sales rising 23% CER.

The company ended the period with an order book of £203m, which equates to around five months of sales which is said "provides good forward visibility". However, this was down from £223m at the start of the fiscal year and below the £257m reported the year before.

The company declared an interim dividend of 3.75p, up 6% on last year.

The stock was up 3.4% at 624.6p by 0830 GMT.