discoverIE Group Delivers Record Profits Amid Volatile Conditions
Why we think this is very good
The trading update from discoverIE Group plc indicates strong financial performance, with the company expecting to deliver another year of record profitability. Key highlights include: - Continued growth in underlying operating profits and margins over the last 10 years - Strong fourth quarter order growth of 11% sequentially and 15% organically year-on-year - Excellent free cash flow generation and a well-funded balance sheet with low gearing - The company appears undervalued based on its price-to-sales and price-to-earnings ratios While the update mentions 'volatile trading conditions', the overall tone is very positive, and the company appears well-positioned to continue its resilient performance and development.
Key Points
- Expects to deliver another year of record profitability
- Continued growth in underlying operating profits and margins over the last 10 years
- Fourth quarter orders increased by 11% sequentially and 15% organically year-on-year
- Group is well funded with low gearing
- Company appears undervalued based on valuation metrics
Summary
discoverIE Group plc (LSE: DSCV), a leading international designer and manufacturer of customised electronics, has issued a positive trading update for its financial year ended 31 March 2025. The Group expects to deliver another year of record profitability, continuing its growth in underlying operating profits and margins in each of the last ten years.
Fourth quarter orders increased by 11% sequentially and by 15% organically year-on-year, with similar organic growth in both divisions. The Group is well funded, with year-end gearing of 1.45x, below the lower end of the Group's target gearing range. The company appears undervalued based on its price-to-sales and price-to-earnings ratios.
The Group has built an international manufacturing capability that is flexible, resilient, and efficient, allowing it to support customers through volatile trading conditions. The company remains mindful of the volatile trading environment but is well-placed to continue its resilient performance and development.