discoverIE Group

LN: DSCV

£486.1m market cap

548p last close

discoverIE Group is a leading international designer, manufacturer and supplier of customer-specific electronic products and solutions to 25,000 industrial manufacturers.

Investment summary

discoverIE has acquired Sens-Tech for an initial cash consideration of £58m, partially funded by a £33m placing at 415p per share. Sens-Tech designs and manufactures specialist sensing technology and fits with discoverIE’s strategy to buy businesses supplying niche, highly customised products for critical applications. Sens-Tech increases the group’s international revenues and boosts its presence in target markets such as transportation and healthcare. This is discoverIE’s largest acquisition since Noratel in FY15; we estimate the deal is immediately earnings enhancing (FY20e EPS +2%, FY21e +5%).

Y/E Mar
Revenue (£m)
EBITDA (£m)
PBT (£m)
EPS (fd) (p)
P/E (x)
P/CF (x)
2018A 387.9 29.3 22.6 23.0 23.8 17.9
2019A 438.9 37.0 28.4 28.4 19.3 13.3
2020E 472.8 43.5 33.9 29.5 18.6 16.1
2021E 495.7 48.1 37.9 31.4 17.5 11.8
Industry outlook

discoverIE Group is a designer, manufacturer and supplier of customised electronics to industry with operations throughout Europe and increasingly outside Europe. The company is focused on growing the percentage of higher-margin specialist product through organic growth and acquisition. Its key markets (more than 50% of sales) are medical, renewables, transportation and industrial connectivity, all of which are good growth markets.

Last updated on 15/11/2019
Sector
TMT
Share price graph
Balance sheet
Forecast net debt (£m) 77.3
Forecast gearing ratio (%) 38
Price performance
%
1m
3m
12m
Actual 29.9 26.9 56.6
Relative* 28.3 21.6 49.8
52-week high/low 548.0p/325.0p
*% relative to local index
Key management
Nick Jefferies CEO
Simon Gibbins FD
Joanna Madge Group Company Secretary Designate

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