DiscoverIE Group plc (LSE:DSCV) reported a 1% increase in organic sales for the three months ended 31 December, with signs of recovery emerging in its previously lagging Controls operating unit.
On a constant currency basis, group revenue rose 5% over the quarter. Order intake was stronger, climbing 9% at constant exchange rates and 4% organically, lifting the book-to-bill ratio to 1.03x from 0.99x in the first half of the financial year.
The Controls division, which had trailed DiscoverIE’s other three operating units earlier in the year, delivered an improved sales trajectory during the quarter. Organic orders in the unit exceeded those of the comparable prior-year period, indicating a more sustained recovery in demand.
The London-listed designer and manufacturer of customised electronics reaffirmed its full-year adjusted earnings guidance. Management said the current order book provides good visibility into the final quarter, leaving the group on track to meet the board’s expectations for the full year.
During the period, DiscoverIE completed the acquisition of Keymat Technology Ltd following regulatory clearance. Approval for the planned acquisition of Trival Antene d.o.o remains in progress, and the company said it continues to see a healthy pipeline of potential acquisition opportunities.
Gross margins remained resilient, working capital discipline was maintained and cash generation continued to be strong, according to the update. In constant currency calculations, sterling strengthened by 4% against the US dollar compared with average rates last year, while weakening by 5% versus the euro and by an average of 7% against the Nordic currencies.
Analysts at Jefferies described the trading update as “very much an in-line statement.” They noted that while DiscoverIE’s valuation does not appear demanding and there are reasons for cautious optimism around the outlook, they retain a Hold rating pending clearer evidence of sustained improvements in operating cash conversion and M&A-led growth. Excluding the Controls unit, Jefferies estimates the rest of the group delivered around mid-single-digit organic growth.
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