DiscoverIE Group PLC order book remains strong in face of pandemic

DiscoverIE Group PLC () reported a strong performance for its past financial year despite the fourth quarter being affected by the coronavirus pandemic. 

Underlying profit before tax rose 21% to £32.8mln on sales up 8% at constant exchange rates and 6% to £466.4mln on a reported basis. 

“In response to the COVID-19 pandemic which became evident in the final quarter of the year, we have taken swift action to ensure the safe working of employees and trading partners whilst maintaining operational continuity,” said chief executive Nick Jefferies.

“We are supporting customer needs in the medical sector by quickly developing and supplying products for a range of virus-related medical equipment in over 60 different projects.”

The electronics designer’s gearing at the year-end reduced to 1.25x with significant headroom under existing facilities.

“The group has a strong financial position, a clear strategy and is performing well,” said Jefferies. “We have taken decisive measures to preserve cash and reduce operating expenditure whilst maintaining our capability to respond effectively as conditions improve.”

Looking to the new financial year, first-quarter sales are down 10% on an organic basis, though the order book remains strong at £159mln, up 13% year on year, with the three-month order book in the core Design & Manufacturing division at a level consistent with the prior year.

“With a strong funnel of design wins and acquisition targets, the Group is well positioned for a return to strong growth as conditions recover,” Jefferies said.

The shares were up more than 6% to 514p my late morning on Wednesday.

Broker FinnCap said: “Coupled with strong cash flow reducing net debt/EBITDA to 1.25x, the group is very well placed to trade through the current uncertainties and then resume its proven strategic growth path. We make no changes to our forecasts.”