Discoverie Share Discussion Threads

[mfhmfh] 05/12/2017 10:48

from 04.12.17:

FinnCap retains 405p target price.

[rivaldo] 05/12/2017 09:36

New highs again this morning, with buying at 359.95p.

Nice article here:



"One growth stock I’d buy and hold for the next decade

Royston Wild | Tuesday, 28th November, 2017 |

I have long been a big fan of Acal (LSE: ACL) and, although the market has remained unmoved in Tuesday business, the company’s latest trading statement today has firmed up my bullish view.

The electronics builder and distributor — which from today will be known as discoverIE Group — announced that revenues detonated 21% during the six months to September, to £190.2m, a result that pushed underlying pre-tax profit to £10.4m, up 42%.

And discoverIE, boosted by a solid order book, is confident that it can continue making progress in the near term and beyond. Chief executive Nick Jefferies commented: “The second half has started well and we are on track to deliver full-year performance in line with our expectations, supported by a record order book of £111m.

“Together with an increase in new project design wins of over 30%, with an estimated lifetime sales value of over £90m, we are well positioned for continued growth.”

Meanwhile, discoverIE’s multi-year programme to boost margins by expanding its Design and Manufacturing arm is also delivering the goods. The company saw its underlying operating margin increased by 60 basis points, to 6.2%, during the first half.

Brilliant forecasts

It should come as little shock, therefore, that City analysts expect discoverIE to continue growing earnings at a terrific rate.

In the year to March 2018 a 10% bottom-line improvement is anticipated. And the good news does not end here, a further 8% advance predicted for the following year.

These current forecasts make the small-cap a brilliant value pick too. On top of carrying a forward P/E ratio of 14.4 times, it also boasts a corresponding PEG multiple of just 1.4.

What’s more, today’s release underlined the fact that discoverIE is a growth dividend share that investors should take notice of — the business hiked the interim dividend 8% year-on-year to 2.65p per share on the back of its strong results.

In fiscal 2018 the total dividend is expected to increase to 9.3p per share from 8.5p previously, City analysts are predicting, meaning that discoverIE sports a chunky 2.9% yield. And the yield steps to 3.1% for next year thanks to an anticipated 9.8p reward."

[rivaldo] 04/12/2017 13:51

Finncap's quarterly note on the Support Services sector is out today. In it, they highlight how infrastructure will be disrupted by smart technology.

They highlight six companies well placed to benefit from this transformation. DSCV is one of them (I also hold RNWH, which is another):

"discoverIE, with its focus on providing innovative electronics and its design-tomanufacture capability, is well placed to help manufacturers provide the
electronics needed to support Smart Infrastructure. Indeed, in January 2017 the group doubled its sensor capability with the acquisition of Variohm. Recent results confirmed that sensors are a fast-growing segment for discoverIE."

[rivaldo] 04/12/2017 10:14

Nice £385,000 buy at 350p this morning, and moving up to new highs now at 349.25p mid-price (ignore the thread header chart).

[soundbuy] 01/12/2017 15:02

Thread hopping here - cheers all........

[rivaldo] 01/12/2017 10:34

Tipped in this week's IC as follows:

"What’s in a name? I wonder if shareholders were more enamoured by Acal changing its name to discoverIE (DSCV), or an 8 per cent hike in the half-year payout? The new handle is a truncated form of 'discover innovative electronics' and is meant to reflect the primacy of the group’s design and manufacturing (D&M) business, which accounts for 78 per cent of underlying profits. It’s no longer a garden variety distributor although, curiously, management opted to keep the existing trading names. Presumably, the punters are showing more brand loyalty than management.

Whatever you call it, the group revealed underlying revenue and pre-tax growth rates of 15 and 23 per cent, respectively, at constant currencies. It delivered across a range of performance targets, including a 60-basis point increase in the underlying operating margin. An enhanced ability to offer customised D&M options is contributing to a sharp rise in cross-selling opportunities, reflected in an increase in new project design wins of over 30 per cent.

But there is also increased commercial crossover because of a strategic focus on perceived growth areas, such as the renewable energy and medical spheres. All this contributed to a record order book of £111m – a 16 per cent increase at fixed currencies.

Broker Peel Hunt forecasts adjusted profit of £23.6m for the March 2018 year-end, leading to EPS of 23.6p, against £21.5m and 22p in FY2017.

IC View

We’re nonplussed about the rebranding, but the margin uplift and a 2.8 percentage point increase in return on capital employed (ROCE) demonstrate that the transition to a ‘value added’ commercial model makes sense – even if discoverIE doesn’t. Trading at 14 forecast earnings, the shares still look undervalued. Buy."

[rivaldo] 01/12/2017 09:02

New audio interview with the CEO, who comes across very well. In particular:

- D&M is now 80% of profits
- Brexit will have negligible impact as (1) most products are made outside Europe, and (2) there's very little cross-border trading between the UK and the EU:

http ://www.proactiveinvestors.co.uk/companies/stocktube/8421/discoverie-is-the-new-acal-8421.html?utm_source=Sign-Up.to&utm_medium=email&;utm_campaign=7163-371538-Proactivity+-+28%2F11%2F2017

[mfhmfh] 30/11/2017 11:54

looking for 400p here by end of year.

[rivaldo] 30/11/2017 11:25

Excellent interview with the CEO:



"Tuesday 28 November 2017 12:28pm

Electronic parts maker Acal reveals its new name will be DiscoverIE as business booms

Acal, the company that supplies electronic components for everything from Nespresso machines to wind turbines, has announced it will change its name to DiscoverIE from today, signifying a shift in the company's ambitions.

The firm began as a distributor of electronic components, but since 2011, it has been building up its design and manufacturing (D&M) business. Now, D&M makes up 80 per cent of the group's profit.

Chief executive Nick Jefferies told City AM it was the right time for a rebrand to make it clear that the company has changed.

"We've reached a tipping point where almost everything we do is D&M. It just felt right to make the change," Jefferies said.

DiscoverIE stands for "discover innovative electronics", and the company will start trading under its new ticker, DSCV, tomorrow.

Jefferies added the company plans to keep building its D&M business, partly through acquisitions. DiscoverIE typically acquires two smaller, niche electrical components firms each financial year. With one bought in January and the end of the year approaching in March, Jefferies said the company is due for another.

"There are a lot of opportunities in this market place," he said, noting that markets from energy to transportation are being driven by the adoption of new technologies. DiscoverIE aims to be the company supplying the niche parts for these new technologies.

The company made the announcement alongside its half-year results.

For the six months to the end of September, the firm's revenue rose 21 per cent, or 15 per cent at constant exchange rates, to £190.2m. Underlying profit before tax jumped 42 per cent compared with the previous year to £10.4m.

"The second half has started well and we are on track to deliver full-year performance in line with our expectations, supported by a record order book of £111m," Jefferies said.

"Together with an increase in new project design wins of over 30 per cent, with an estimated lifetime sales value of over £90m, we are well positioned for continued growth."

The company aims to repeat the success of the past five years by doubling revenue and underlying earnings per share."

[rivaldo] 30/11/2017 11:24

No probs TIM - hope you don't mind, but I've set up a new thread with a full header post and bells and whistles :o))

[rivaldo] 30/11/2017 11:22

!
discoverIE is the new name for Acal (ACL).

Finncap have recently increased their target price to 405p and say Buy. They forecast 22.9p EPS this year rising to 25.1p EPS next year, with 9.2p and 9.7p dividends respectively.

The recent interims were excellent, underlining the company's transformation in recent times to own designed and manufactured (D&M) products at higher margins in growing sectors like medical, internet of things, renewable energy, transportation etc:



"Highlights

Strong growth in sales, orders, profitability and earnings

o Sales up 21% (+15% CER(2)) on orders up 22% (+15% CER)
o Underlying operating profit up 34% (+23% CER)
o Underlying earnings per share up 24%
o Interim dividend increased by 8%"

"Nick Jefferies, Group Chief Executive, commented:

"This is a strong set of results. Sales increased by 21%, of which 9% was widespread organic growth across the Group, and underlying earnings per share increased by 24%. The second half has started well and we are on track to deliver full year performance in line with our expectations, supported by a record order book of £111m. Together with an increase in new project design wins of over 30%, with an estimated lifetime sales value of over £90m, we are well positioned for continued growth.

Since 2011, we have been building a Design and Manufacturing business that would transform the Group into a higher margin business. D&M now accounts for 78% of Group underlying profit contribution and to reflect this and, more importantly, our further ambitions, we are announcing today that the Company is changing its name to discoverIE Group PLC (LSE: DSCV), recognising how we help our customers to 'discover innovative electronics'. The Group's operating business names, which customers know and rely upon, remain unchanged, preserving trusted brands.

We have many growth opportunities ahead of us as we drive towards our stated targets, and our ambition remains to repeat the performance of the last five years by doubling revenue and underlying earnings per share through a combination of organic growth and value-enhancing acquisitions."

Here's the web site:



"discoverIE (LSE: DSCV) is an international group of businesses that designs, manufactures and supplies innovative components for electronic applications.

We provide application-specific components to original equipment manufacturers (OEMs) internationally. With our in-house component design capability, we assist customers in designing a component to meet their requirements from our wide range of products, which we then supply for their production needs.

The Group's long term, multi-year customer relationships generate a high level of recurring revenue. Our key growth markets are renewable energy, transportation, medical and industrial connectivity, all of which enjoy structural growth and increasing electronic content. Our strategy is to complement this organic growth with targeted acquisitions.

The Group employs c.3,800 people and its principal operating units are located in Continental Europe, UK, China and Sri Lanka."

Link to the old ACL thread:


DSCV are also traded on NEX:

[this_is_me] 30/11/2017 08:46

Yes rivaldo; more haste less speed would have been better. Unfortunately advfn don't allow editing of the title.

[petewy] 29/11/2017 20:21

Thanks This is me

[mfhmfh] 29/11/2017 13:39

This from IC today:

'Trading at 14 forecast earnings, the shares still look undervalued. Buy.'

[rivaldo] 29/11/2017 08:29

Thanks TIM. Being a pedant, can I point out that it's "formerly", not "formally"!

It would also be great to have some info about the company in the thread header, as well as the "latest news" box ticked. If you can't be bothered I'm happy to put together a header post for a "new" new thread?