DiscoverIE Share Price Rallied 6.94% on Interim H1 FY24 Results

The DiscoverIE Group PLC (LON: DSCV) share price rallied 6.94% after releasing its interim results for the six months to 30 September 2023. The group sales increased by 4% at constant exchange rates (CER), despite facing tough comparators from the previous year when we experienced a remarkable 23% CER growth.

Organic sales showed a steady 1% growth, with the Markets and Customers (M&C) segment achieving a 2% increase and the Sales and Services (S&C) segment recording a 1% growth. The firm maintained robust gross margins, thanks to significant operational efficiencies implemented across the organization.

Its underlying operating profit surged by an impressive 17% at constant exchange rates. Underlying EPS also demonstrated solid growth, rising by 8%. The company made notable progress towards its key targets, with the underlying operating margin increasing by 1.4 percentage points to reach 12.9%.

The company’s operating cash flow for the last 12 months increased by a remarkable 36%, accompanied by an impressive 91% conversion rate. Our Return on Capital Employed (ROCE) stands at 15.1%, aligning with our targeted objectives.

DiscoverIE is committed to sustainability, as evidenced by the substantial reduction of approximately 45% in carbon emissions since the calendar year 2021. The company’s supply chain has normalized, and it boasted a period-end order book of £203 million, equivalent to around five months of sales, providing excellent forward visibility.

The firm has successfully completed two high-margin acquisitions totalling £65 million. Integration efforts for 2J and Silvertel are underway and progressing as planned. Its period-end gearing stood at 1.6 times, which is at the lower end of its target range of 1.5 to 2.0 times.

The Group is strategically positioned for further growth, with a record bank of design wins, up 23% to £190 million ELV (Equivalent Lifetime Value), and significant additional opportunities on the horizon.

Nick Jefferies, Group Chief Executive, commented: “DiscoverIE performed well in the first half. Our operational focus and sustained strong sales levels, which follows two years of growth at over 20% per year, delivered significant efficiencies with underlying operating profit increasing by 17% at constant exchange rates. 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.”

DiscoverIE Group share price. 

The DiscoverIE Group share price rose 6.94% to trade at 647.5p from Monday’s closing price of 605.5p.