Author: Mick Elliott, Contributing Editor
discoverIE Group has delivered year-on-year sales down 1% at £437 million and profits up 16% to £57.2 million.
The company cites operational efficiencies that improved margins and more than offset the 1% reduction in organic sales.
A bank of design wins promises to drive future recurring sales. An order book of four and a half months is fostering confidence for the coming year.
Nick Jefferies, Group Chief Executive, commented: “Whilst the softer market conditions in some sectors are expected to continue for the first half of the year, we have a strong pipeline of design wins, order backlog, and acquisition opportunities. With the benefit of a robust balance sheet, we expect to make further progress in the year ahead, in line with the Board’s expectations, building on the essential role that our specialist products provide for our customers.
“Over the past three years, the underlying profitability of the business has nearly doubled on revenues that have increased by almost 50% as the combination of organic growth with efficiencies and higher margin acquisitions came through. This year’s results reflect another strong performance against a tougher trading backdrop, with good growth in underlying operating profits and margin, as well as underlying earnings per share. Revenues in our Transportation, Renewable, and Medical markets delivered strong organic growth whilst Industrial and Connectivity declined as a result of customer destocking.
“We made five acquisitions during the year for a consideration of £83m. Our approach to long-term compounding organic growth is delivering increasing ROCE over time, with our longer standing acquisitions now generating 28% ROCE and we expect our newer businesses to generate similar returns over time.”
Acquisitions include 2J Antennas, a Slovakia-Based designer and manufacturer of high-performance antennas and Silver Telecom (Silvertel) which designs and manufactures power-over-Ethernet modules for global industrial electronic connectivity markets
Jefferies concluded: “Whilst the softer market conditions in some sectors are expected to continue for the first half of the year, we have a strong pipeline of design wins, order backlog and acquisition opportunities. With the benefit of a robust balance sheet, we expect to make further progress in the year ahead, in line with the Board’s expectations, building on the essential role that our specialist products provide for our customers.”
