Discoverie lifts FY guidance after strong H1 performance

(Sharecast News) - Electronic components manufacturer DiscoverIE said on Wednesday that firsthalf trading remained strong, prompting an earnings upgrade, with organic sales up 8% and orders surging 22%.

Discoverie said growth was led by its magnetics and controls division, where sales jumped 13% on robust demand across industrial electrification, renewables and security. Sensing and connectivity delivered 1% organic growth, an improvement on last year's runrate, with management expecting a faster second half as supply lead times ease.

Including recent acquisitions, total sales rose 13% at constant exchange rates and 14% on a reported basis, while orders increased 30% at CER, giving a booktobill ratio of 1.12 and a strong order book supporting expectations for good H2 growth. Acquired businesses were also said to have continued to perform well.

The FTSE 250-listed group said adjusted earnings for the full year were now running ahead of the board's expectations, underpinned by strong trading momentum and a healthy pipeline of design wins. Operating cash generation remained solid, with gearing expected to be 1.6x at 30 September and around 1.8x post3G acquisition by yearend.

With firm demand, rising orders and ongoing acquisition opportunities, Discoverie added that it was well positioned to extend its longterm record of compounding growth through the cycle.

As of 1115 BST, Discoverie shares were up 2.05% at 898p.

Reporting by Iain Gilbert at Sharecast.com

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