discoverIE Group — Accelerating demand

discoverIE Group (LSE: DSCV)

Last close As at 05/08/2026

GBP8.23

24.00 (3.00%)

Market capitalisation

GBP802m

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Research: TMT

discoverIE Group — Accelerating demand

discoverIE saw a strong finish to the year, with Q426 organic order growth of 15% y-o-y, organic revenue growth of 5% and 6% growth in the order book compared to end-H126. The company expects to deliver FY26 adjusted EPS in line with consensus. Reflecting an increased level of investment to support growing demand, we revise our adjusted EBIT forecasts. This is more than offset by reduced finance costs in FY26. Management has a number of acquisition opportunities in development, which, along with its pipeline of organic opportunities and design wins, positions the company well for further resilient growth.

Written by

Katherine Thompson

Director

Electrical components

FY26 trading update

17 April 2026

Price 623.00p
Market cap £607m

Net cash/(debt) at end H126

£(90.7)m

Shares in issue

97.4m
Free float 96.0%
Code DSCV
Primary exchange LSE
Secondary exchange N/A
Price Performance
% 1m 3m 12m
Abs 8.5 1.8 13.5
52-week high/low 748.9p 497.0p

Business description

discoverIE is a leading international designer and manufacturer of customised electronics to industry, supplying customer-specific electronic products and solutions to OEMs.

Next events

FY26 results

3 June

Analyst

Katherine Thompson
+44 (0)20 3077 5700

discoverIE Group is a research client of Edison Investment Research Limited

Note: PBT and EPS as per discoverIE’s adjusted metric (excludes amortisation of acquired intangibles and exceptional items).

Year end Revenue (£m) PBT (£m) EPS (p) DPS (p) P/E (x) Yield (%)
3/24 437.0 48.2 36.78 12.00 16.9 1.9
3/25 422.9 50.1 38.68 12.50 16.1 2.0
3/26e 442.1 51.6 39.79 12.95 15.7 2.1
3/27e 471.0 55.9 41.82 13.55 14.9 2.2

Positive momentum in Q426

In Q426, all operating units saw a sequential increase in demand (both orders and sales). Group revenue grew 6% y-o-y at constant exchange rates (CER) and 5% on an organic basis with acquisitions contributing 1%. Group orders were up 16% CER and 15% organically, with a book-to-bill above 1x, as customers both increased their short-term demand and extended order periods. The Magnetics & Controls division saw a strong pick-up in demand from industrial and medical customers. In Controls, which has lagged due to several US customers working down inventory, organic orders grew strongly for the third consecutive quarter. The Sensing & Connectivity business made encouraging progress as orders improved from the industrial, security and wireless segments.

Growth in order book; Trival acquisition closes

For FY26, group sales grew 5% (reported and CER) and 2% organically; organic sales in both divisions grew 2%. Orders grew 9% CER and 5% organically and the year-end order book was 6% higher half-on-half. Regulatory approval has been received for the Trival acquisition (announced on 4 December 2025) and the deal completed earlier in April. Year-end gearing is expected to have reduced to 1.2x (vs 1.3x at end H126); taking into account the post year-end acquisition of Trival, pro forma gearing would be 1.7x, comfortably within the company’s 1.5–2.0x target range.

Valuation: Discount overdone

Through a period of low revenue growth induced by industrial destocking, discoverIE has managed to grow operating profit and earnings, but over the same period, its discount to peers (at c 30%) has widened on a P/E basis. Considering that organic revenue growth has resumed, and the company continues to make good progress towards its margin targets, we believe this discount is overdone. With an active M&A pipeline and a disciplined approach to valuation, we expect further acquisitions to boost growth and earnings.

Changes to forecasts

During FY26, gross margins remained robust and combined with internal efficiencies and lower interest costs, supported earnings momentum. The group is on track to deliver adjusted EPS in line with consensus (40.1p). The company highlighted that it made additional investments in the year to support increased demand, including manufacturing capacity expansions in Thailand and India, and increased sales and engineering headcount in the US and Europe.

We have revised our forecasts to reflect slightly lower revenue, a slightly higher cost base and lower net finance costs. For FY26, our adjusted EBIT forecast is reduced by 2.8% but our adjusted EPS forecast is increased by 0.9%. For FY27, we reduce adjusted EBIT by 2.5% and adjusted EPS by 1.3%.

We have shifted the payment for Trival from FY26 to FY27, reflecting the closure of the deal earlier in April.

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London │ New York │ Frankfurt

20 Red Lion Street

London, WC1R 4PS

United Kingdom

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