discoverIE Group (DSCV) H2 2026 earnings summary

Executive summary

• Organic orders grew 14% in Q4 and 5% for the year, with organic sales up 5% in Q4 and 2% for the year, showing strong momentum into the next financial year.

• Both divisions returned to growth, with Controls recovering from de-stocking and Magnetics leading growth; order book up 5% in H2, providing good visibility.

• Three high-margin acquisitions (3Gmetalworx, Trival, Storm) totaling £95m were completed, expanding presence in defense, aerospace, and high-growth markets.

• Strong cash flow conversion (92%) supports self-funded acquisitions and ongoing investments.

• The business exited the year with strong momentum and a robust order book, positioning well for the next year.

Financial highlights

• Revenue rose 5% to £443.3m, with organic sales up 2% and adjusted operating profit at £61.0m (+1%).

• Adjusted operating margin was 13.8%, down 40bps due to growth investments.

• Reported profit before tax rose 13% to £36.1m, and reported fully diluted EPS increased 18% to 29.4p.

• Free cash flow reached £37m, with operating cash flow at £56m and capital investment at £6.6m.

• Net debt stood at £81m, with gearing expected to reduce from 2.2 to 1.8 during the year.

Outlook and guidance

• Q1 trading started strongly, with organic orders and sales growth momentum continuing and order book supporting a positive outlook.

• Adjusted earnings are in line with Board expectations, with a broadly even H1/H2 split anticipated.

• Margin expected to rise by 80bps annually from recent acquisitions, supporting the 17% margin target by FY2030.