discoverIE Group (DSCV) H1 2026 earnings summary

Executive summary

• Record profitability and cash flow achieved in H1 FY26, with adjusted operating profit up 5% CER to £30.2m and adjusted EPS up 6% to 19.5p, driven by organic sales and order growth, especially in Sensing & Connectivity.

• Three of four operating units returned to growth, with Sensing & Connectivity and Magnetics leading, while Controls lagged due to destocking.

• Free cash flow conversion exceeded 100% (104%), reflecting a capital-light business model and supporting ongoing acquisitions.

• The business remains on track for full-year targets, with confidence in the outlook and a robust acquisition pipeline.

• Interim dividend increased by 4% to 4.05p per share, maintaining a progressive policy.

Financial highlights

• Revenue rose to £216.4m, up 3.5% CER year-over-year, with Q2 sales up 1% and orders up 8%.

• Adjusted operating margin improved to 14.0% (up 0.3ppt CER), with reported profit before tax up 11% to £17.6m.

• Adjusted profit before tax up 7% to £25.5m; adjusted EPS up 6% to 19.5p; reported EPS up 11% to 13.5p.

• ROCE at 15.4%, above target, and ROTCE at 46.5%.

• Dividend cover at over 3x adjusted earnings, with progressive policy maintained.

Outlook and guidance

• On track to deliver full-year adjusted earnings in line with Board expectations, with strong order book and improving organic sales and order trends.

• Tariff situation stabilizing, with customers adapting and a strong pipeline of design wins and M&A opportunities.

• Controls division expected to stabilize in H2, supporting margin recovery.