DiscoverIE makes 'good financial and strategic progress' in H1

Industrial electronics manufacturer DiscoverIE said on Wednesday that it had made "good financial and strategic progress" and was on track to deliver full-year underlying earnings in line with recently upgraded expectations.

DiscoverIE said group sales in the six months ended 30 September were 4% ahead of last year, comprising 1% organic growth and 3% from acquisitions. After foreign exchange effects of 3%, reported sales were 1% ahead of last year.

Sales increased by 2% organically in the magnetics and controls division and by 1% organically in the sensing and connectivity unit. Whilst DiscoverIE saw "some normalisation of order books", its focus on "a diverse range" of customers in its four target markets provided the group with "long-term, structural growth in less cyclical markets" which led to "resilient overall demand and sustained positive trading momentum".

The FTSE 250-listed firm also noted that orders in the second quarter increased by 2% sequentially, with the book-to-bill ratio increasing from 0.84 in the first quarter, to 0.91 in the second quarter.

Operating margins continued to strengthen, expected to increase by around 100 basis points year-on-year, making excellent progress towards the group's FY25 target of 13.5% and mid-term target of 15%.

Looking ahead, DiscoverIE said: "With a clear strategy focused on structural and sustainable international growth, a diversified customer base, a healthy order book, and pipeline of design wins and acquisition opportunities, the group has a resilient business model that, despite varied market conditions, is well positioned to make further good progress on its key priorities."

As of 0935 BST, DiscoverIE shares were up 2.18% at 656.01p.

Reporting by Iain Gilbert at Sharecast.com