discoverIE Group (DSCV) H2 2024 earnings summary

Executive summary

• Strategy centers on organic revenue growth above market, margin improvement, value-creating acquisitions, and strong cash flow and ROI.

• Achieved 1% sales growth at CER, with strong performance in renewables, medical, and transportation markets offsetting industrial destocking.

• Operating margin reached a record 13.1%, up 1.6ppts, driven by operational efficiencies and cost reductions.

• Five acquisitions completed for £83 million and partial disposal of the solar business to enhance margins and generate cash.

• Absolute carbon emissions reduced by 47% since CY21, with continued ESG progress.

Financial highlights

• Sales reached £437 million, up 1% at CER, but down 1% organically.

• Operating profit up 16% at CER to £57 million; underlying EPS up 5% (10% at CER); reported EPS down 27% due to disposal and acquisition costs.

• Operating cash flow up 22% to £59 million, with free cash flow at £37 million and cash conversion over 100%.

• Dividend per share increased by 5% to 12.0p, maintaining a progressive policy.

• Underlying PBT up 4% to £48.2 million.

Outlook and guidance

• FY 2025 outlook unchanged; Q1 and H1 trading in line with expectations, with H1 sales expected to be sequentially ahead.

• Continued margin expansion expected, supported by a strong order book and robust pipeline of design wins and acquisitions.

• Order book stabilizing at 4.5 months, indicating a return to normal operations.