Last close As at 05/08/2026
GBP8.23
▲ 24.00 (3.00%)
Market capitalisation
GBP802m
Research: TMT
discoverIE’s Q125 trading update confirmed that underlying earnings expectations for FY25 are unchanged. While the Q125 revenue decline reflects the lower bookings environment in previous quarters, book-to-bill was above one and bookings increased organically year-on-year despite ongoing destocking by customers in the industrial market. Robust gross margins and a well-controlled cost base support the company’s 13.5% target operating margin for FY25 and we maintain our forecasts.
discoverIE |
FY25 earnings expectations maintained |
Trading update |
Electrical components |
26 July 2024 |
Share price performance
Business description
Analyst
discoverIE is a research client of Edison Investment Research Limited |
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discoverIE’s Q125 trading update confirmed that underlying earnings expectations for FY25 are unchanged. While the Q125 revenue decline reflects the lower bookings environment in previous quarters, book-to-bill was above one and bookings increased organically year-on-year despite ongoing destocking by customers in the industrial market. Robust gross margins and a well-controlled cost base support the company’s 13.5% target operating margin for FY25 and we maintain our forecasts.
Year |
Revenue |
PBT* |
Diluted EPS* |
DPS |
P/E |
Yield |
03/23 |
448.9 |
46.3 |
35.2 |
11.45 |
20.7 |
1.6 |
03/24 |
437.0 |
48.2 |
36.8 |
12.00 |
19.8 |
1.6 |
03/25e |
453.1 |
49.9 |
37.3 |
12.50 |
19.5 |
1.7 |
03/26e |
466.7 |
52.4 |
39.0 |
13.00 |
18.7 |
1.8 |
Note: *PBT and EPS as per discoverIE’s underlying metric, excluding amortisation of acquired intangibles and exceptional items.
In Q125, discoverIE saw a 6% y-o-y decline in revenue at constant exchange rates (CER), an organic decline of 12% CER, reflecting a strong comparator, and a 6% net contribution from acquisitions. Industrial customers continue to destock but, despite this, orders grew 4% organically and 13% CER year-on-year as customers in other target markets placed orders. This resulted in a book-to-bill ratio of 1.01 compared to 0.84 in Q124 and 0.89 in FY24. discoverIE reported strong growth in design wins in FY24, which should provide the foundation for revenue growth when customer inventory unwinds are complete.
Gross margins in the quarter were robust and operating costs and working capital were tightly managed with the company continuing to target a 13.5% operating margin this year (in line with our forecast) and 15.0% in the medium term.
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Research: Healthcare
OSE Immunotherapeutics’ run of positive news continues with the announcement of encouraging data from the Phase II proof-of-concept CoTikiS study, evaluating Lusvertikimab as a novel treatment for ulcerative colitis (UC). The randomised, double-blind trial (n=136) has reported encouraging, statistically significant benefits, reflected in material improvements on the Modified Mayo Score (MMS). The full data set will be presented in due course, and we expect the next stage of development to be undertaken in partnership, which we estimate will be in place in 2025. Lusvertikimab is a potentially first-in-class IL-7R antagonist, offering a differentiated mechanism of action to other available biologics that currently dominate the UC market. We expect the next major catalyst for OSE to be the initiation of the Phase III trial for lead asset Tedopi, anticipated to commence imminently (previous guided timeline was Q224).