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(Sharecast News) - DiscoverIE Group reported a solid first-half performance on Tuesday, with improving demand and strong cash generation keeping earnings on track with board expectations, as order growth pointed to building momentum into the second half.
For the six months ended 30 September, group sales rose 3% year on year at constant exchange rates, or 2% on a reported basis.
Organic sales increased 0.5% for the period and 1% in the second quarter, with the company highlighting sequential improvement and stronger trading trends compared with last year.
Acquisitions contributed an additional 2.5% to overall growth.
Three of the group's four operating units - sensing, connectivity and magnetics - delivered solid organic sales growth, offset by softer demand in the controls division, where orders from certain large customers remained subdued.
Overall, group orders rose 5% at constant exchange rates and 0.5% organically, with a particularly strong second quarter showing 13% growth at constant exchange rates and 8% organically.
Orders in the second quarter exceeded sales, leaving the group with what it described as a strong order book for the rest of the financial year.
DiscoverIE said gross margins remained robust and working capital tightly managed.
Gearing stood at around 1.3 times EBITDA at the end of September, below its 1.5x to 2.0x target range, giving the group scope to pursue further acquisitions from its growing pipeline.
"The group delivered strong operational and cash performance through the period with improving growth trends, in line with the board's adjusted earnings expectations for this financial year," DiscoverIE said.
The company added that it remained well positioned to sustain growth both organically and through acquisitions as market conditions stabilise.
It said its interim results were due to be published on 2 December.
At 0943 BST, shares in DiscoverIE Group were up 1.53% at 596p.
Reporting by Josh White for Sharecast.com.