discoverIE (DSCV) finished its 2020 financial year with a record order book of £159m, which included big wins in the medical, renewable wind energy and rail transport sectors. The acquisitive electronics group continues to generate a sizeable proportion of turnover (64 per cent) from its higher-margin design and manufacturing (D&M) activities. It made three acquisitions in the year, and these helped boost underlying profitability. Consequently, it has lifted its margin target by four percentage points to 12.5 per cent.
discoverIE hasn’t emerged completely unscathed from the coronavirus pandemic. Its first-quarter sales were down by around 10 per cent, and the group was forced to close a handful of its 27 factories earlier in the year, although these have all now been reopened. The group lost £1.5m of D&M sales owing to coronavirus, while sales volumes were also constrained by de-stocking in its third quarter, particularly in the US and Germany.
Broker Peel Hunt forecasts adjusted pre-tax profits of £26.1m and EPS of 21.9p for March 2021, rising to £27.5m and 23p in FY2022.
|ORD PRICE:||508p||MARKET VALUE:||£454m|
|TOUCH:||508-516p||12-MONTH HIGH:||606p||LOW: 330p|
|DIVIDEND YIELD:||0.6%||PE RATIO:||30|
|NET ASSET VALUE:||224p*||NET DEBT:||41%**|
|Year to 31 Mar||Turnover (£m)||Pre-tax profit (£m)||Earnings per share (p)||Dividend per share (p)|
|*Includes intangible assets of £182m, or 203p a share **Includes lease liabilities of £20m †Restated to reflect fraud costs recovered from insurance|