Half Year 2026 discoverIE Group plc Earnings Call Transcript
Key Points
- discoverIE Group PLC (STU:9A5) reported record profitability and cash flow for the first half of FY26, with cash flow conversion exceeding 100%.
- The company returned to organic sales and order growth in Q2, with orders up 8% and sales up 1%.
- Operating profit increased by 5%, and the operating margin improved by 30 basis points to 14%.
- discoverIE Group PLC (STU:9A5) has a strong pipeline of acquisitions, with a recent acquisition of Keatt for 5.5 million pounds.
- The company has reduced carbon emissions by 63% over 3.5 years, progressing towards its net zero target by 2030.
- One of the four operating units, the controls division, is still experiencing a downturn, although stabilization is expected in the second half.
- Order intake for the S&C division was down 10%, affected by tariff pronouncements and order oscillations.
- The company faces challenges with six customers in the controls division who have overstocked, impacting top-line growth.
- There is a growing backlog of design wins from previous years that have not yet converted into revenue.
- North America experienced a 9% decline in sales, partly due to tariff uncertainties and destocking by major customers.
Okay, good morning everybody. Welcome.
Thank you for coming to Discovery's interim results for FY26, the six months to the September 30.So, I'm going to give you a quick intro into the numbers, and then I'll hand over to Simon, to take you through, some of the detail. So it's been a very strong first half for us, actually record profitability and cash flow through the period, cash flow conversion, so we're very pleased with that.
We've also returned to organic sales and order growth in in Q2, particularly, so orders in Q2 up 8%, sales up 1%. And that was driven by, we have, as you will remember, 3, we have 4 operating units, 2 in each division.
And of those four operating units, 3 of them are now back into good levels of sort of mid-single-digit organic growth. The fourth unit controls we'll talk about later, but that's still down, but we expect that to stabilize through the second half.
So the results of that are operating adjusted operating profit up 5%, CER operating margin up 30 basis points to 14% EBIT
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