discoverIE Group PLC on Wednesday said it had delivered ‘another strong performance against a tougher trading backdrop’ although sales growth was limited by destocking in industrial automation.

In the financial year ended March, the Guildford, Surrey-based customised electronics manufacturer and designer said pretax profit fell 24% to £22.2 million from £29.1 million a year prior.

This reflected the timing of a non-core disposal, discoverIE said. The company pointed out costs associated with the sale of the Santon solar business unit are included in these results with net cash proceeds of around £7 million to be recognised in the new financial year.

Revenue was 2.7% lower at £437.0 million from £448.9 million a year ago, but up 1% at constant exchange rates.

Double-digit organic sales growth in medical, renewable and transportation markets was offset by short-term destocking in industrial automation, discoverIE said.

Chief Executive Nick Jefferies said the results reflect ‘another strong performance against a tougher trading backdrop, with good growth in underlying operating profits and margin, as well as underlying earnings per share. Revenues in our Transportation, Renewable and Medical markets delivered strong organic growth whilst Industrial & Connectivity declined as a result of customer destocking.’

Underlying pretax profit rose by 4.1% to £48.2 million from £46.3 million. Underlying EPS rose 4.5% to 36.8 pence from 35.2p.

discoverIE highlighted a record underlying operating margin of 13.1%, up 1.6 percentage points, which it called a ‘significant step’ towards achieving targets of 13.5% in the year ahead and 15% over the medium term.

Trading in the first quarter of the new financial year is in line with expectations against a tough comparator with first half sales expected to be ahead sequentially, the company added.

‘Whilst the softer market conditions in some sectors are expected to continue for the first half of the year, we have a strong pipeline of design wins, order backlog and acquisition opportunities. With the benefit of a robust balance sheet, we expect to make further progress in the year ahead, in line with the Board’s expectations, building on the essential role that our specialist products provide for our customers,’ Jefferies added.

discoverIE declared a final dividend of 8.25p per share making the total payout 12.0p, up 4.8% from 11.45p a year prior.

Shares in discoverIE down 0.8% to 736.00p in London on Wednesday morning.

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