- DiscoverIE Group makes customised components for industrial applications
DiscoverIE Group shares topped the FTSE 250 on Wednesday morning after the electronics maker said it expected a ‘limited direct impact’ from US tariffs.
The group, which designs and manufactures customised electronic components for industrial applications, had previously outlined plans to shift more manufacturing to the US in the wake of President Donald Trump’s tariffs.
DiscoverIE told investors on Wednesday its capacity to transfer manufacturing meant it could ‘substantially mitigate the effects of US tariffs on imports.’
Shares in the Surrey-based firm, which makes customised components for industrial applications, shot up by almost 13 per cent to 715p by midday.
During President Donald Trump’s first term, DiscoverIE relocated some production to India and Mexico after the US government imposed levies on some imported Chinese goods.
Two months ago, it announced plans to increase US-based production ‘in the coming months’ following the imposition of tariffs by the new Trump administration.
A 10 per cent baseline tariff exists on most US goods imports, while goods from China are subject to a 30 per cent duty.
Flying high: DiscoverIE Group shares topped the FTSE 250 risers on Wednesday morning after the electronics maker said it expected a ‘limited direct impact’ from Trump’s tariffs
Trump has also just doubled the tariff on foreign steel and aluminium products to 50 per cent, although the UK is exempt from this levy.
Nick Jefferies, chief executive of DiscoverIE, said: ‘Whilst we will pass on any incremental tariff costs, we continue to do all we can to mitigate them with our local manufacturing and expect limited direct impact, although remain mindful of the volatile economic conditions and its potential to impact customers’ demand.
It came as the Guildford-based business reported record annual adjusted operating profits and earnings, which totalled £60.5million and 38.7 pence per share, respectively, in the year ending March.
This was despite the firm’s revenue declining by 3 per cent to £427.9million due to industry destocking and supply chain normalisation.
Organic sales slumped by 10 per cent in the first half of the financial year but fell by 4 per cent over the following six months amidst strong demand from the industrial and security sectors.
DiscoverIE’s organic sales remained the most resilient in Asia, where they tipped up by 1 per cent, compared to a 7 per cent drop in both the UK and Germany.
Meanwhile, DiscoverIE’s orders expanded by 8 per cent at constant exchange rates to £411.9million, and its full-year dividend rose by 4 per cent to 12.5p per share.
Jefferies said: ‘DiscoverIE is aligned with target markets which are underpinned by structural growth drivers and, with the addition of the security market during the year, our total market opportunity increased to over $30billion.
‘With a strong pipeline of organic and inorganic opportunities, the group is well placed to continue its resilient performance and development.’
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