What’s in a name? I wonder if shareholders were more enamoured by Acal changing its name to discoverIE (DSCV), or an 8 per cent hike in the half-year payout? The new handle is a truncated form of 'discover innovative electronics' and is meant to reflect the primacy of the group’s design and manufacturing (D&M) business, which accounts for 78 per cent of underlying profits. It’s no longer a garden variety distributor although, curiously, management opted to keep the existing trading names. Presumably, the punters are showing more brand loyalty than management.
Whatever you call it, the group revealed underlying revenue and pre-tax growth rates of 15 and 23 per cent, respectively, at constant currencies. It delivered across a range of performance targets, including a 60 basis point increase in the underlying operating margin. An enhanced ability to offer customised D&M options is contributing to a sharp rise in cross-selling opportunities, reflected in an increase in new project design wins of over 30 per cent.
But there is also increased commercial crossover because of a strategic focus on perceived growth areas, such as the renewable energy and medical spheres. All this contributed to a record order book of £111m – a 16 per cent increase at fixed currencies.
Broker Peel Hunt forecasts adjusted pre-tax profit of £23.6m for the March 2018 year-end, leading to EPS of 23.6p, against £21.5m and 22p in FY2017.
| DISCOVERIE (DSCV) | ||||
| ORD PRICE: | 320p | MARKET VALUE: | £226m | |
| TOUCH: | 315-320p | 12-MONTH HIGH: | 340p | LOW: 205p |
| DIVIDEND YIELD: | 2.7% | PE RATIO: | 31 | |
| NET ASSET VALUE: | 177p* | NET DEBT: | 30% | |
| Half-year to | Turnover | Pre-tax | Earnings per | Dividend |
| 30 Sep | (£m) | profit (£m) | share (p) | per share (p) |
| 2016 | 157 | 1.9 | 1.9 | 2.45 |
| 2017 | 190 | 6.9 | 6.9 | 2.65 |
| % change | +21 | +263 | +263 | +8 |
| Ex-div: | 21 Dec | |||
| Payment: | 15 Jan | |||
| *Includes intangible assets of £99m, or 140p a share | ||||
