Intel stock spikes after report of possible US government stake
Investing.com -- discoverIE Group PLC (LON:DSCV) shares rose more than 13% Wednesday after the company posted fiscal 2025 results slightly ahead of expectations, raised its long-term margin target, and reported a strong start to fiscal 2026.
The company reported sales of £423 million for the year ended March 31, broadly in line with the consensus forecast of £424 million.
Jefferies said reported sales declined 3%, with organic sales down 7% and sales at constant exchange rates (CER) down 2%.
Operating profit totaled £60.5 million, slightly above RBC’s £60 million estimate. Operating margin improved 120 basis points from the prior year to 14.3%.
Underlying profit before tax was £50.1 million, ahead of consensus at £49.6 million and profit before tax rose 4% year over year.
Earnings per share were 38.7p, topping the 37.7p consensus. Normalized EPS was up 5% from the previous year and 3% above consensus. The dividend was 12.5p, in line with expectations.
Free cash conversion reached 106%, above the 85% target. Net debt to EBITDA was 1.3x, lower than the 1.45x indicated in April and below the target range of 1.5x to 2.0x. Jefferies attributed the improvement partly to deferred consideration received at year-end.
Fourth-quarter orders rose 15% organically across both divisions. Group orders increased 2% year over year in constant currency terms.
In the Sensing & Connectivity division, sales grew 1% and orders rose 12%, supported by demand in data security and industrial applications. Magnetics & Controls sales declined 11% due to destocking, with orders down 4%.
The order book covers approximately 4.5 months of revenue. Design wins increased 5% year over year, with a projected lifetime value of £355 million. A pension buy-in completed in January is expected to reduce annual cash costs by £1.5 million.
Management said early trading in fiscal 2026 reflects continued supportive trends and that the company plans to pass on incremental tariff costs. Consensus for fiscal 2026 underlying profit before tax is £52.5 million. RBC forecasts £52.7 million and expects no material changes following the update.
DiscoverIE raised its long-term EBITA margin target from 15% by fiscal 2027–28 to 17% by fiscal 2029–30. Jefferies cited manufacturing efficiencies, commercial synergies and future acquisitions as drivers.