FINANCIAL REVIEW
Sterling was 5% stronger this year versus 12 months ago, compared with the US Dollar but 3% weaker against the Euro and 5% weaker on average against Nordic currencies, giving rise to a net reduction in adjusted operating profits on translation of £0.2m for the year. Adjusting items Adjusting items for the year totalled £15.8m (FY 2024/25: £18.1m) comprising the amortisation of acquired intangibles of £16.3m (FY 2024/25: £16.2m), broadly in line with last year, less net acquisition and disposal credits of £0.5m (FY 2024/25: a net expense of £1.9m). The net acquisition and disposal credits of £0.5m comprises a net reduction in the fair value of contingent consideration payable on past acquisitions of £5.8m less £1.3m fair value adjustments on acquired inventory, £3.2m of costs associated with acquisitions, £0.4m of acquisition integration costs and £0.4m of GMP equalisation payments in respect of the Group’s legacy pension scheme. Financing costs Net finance costs for the year were £9.1m (FY 2024/25: £10.4m) and include a £1.3m charge for leased assets under IFRS 16 (FY 2024/25: £1.0m) and a £0.6m charge for amortised upfront facility costs (FY 2024/25: £0.6m). Excluding these, net finance costs related to our banking facilities were £7.2m (FY 2024/25: £8.8m), a reduction of 20%, due to lower average net debt balances during the year and lower base rates for our main borrowing currencies (Sterling, US Dollars and Euros), all of which reduced during the year. The Sterling base rate and US Dollar Federal rate both reduced by 0.75ppts to 3.75%, while the ECB lending rate reduced by 0.5ppts to 2.15%.
As shown below, adjusted operating profit growth has mainly been achieved through organic growth in sales and accretive acquisitions made this year and last year, partially offset by operational investment in future growth.
The Group delivered robust financial performance against challenging market conditions. Together with strong cash generation and disciplined capital allocation, it supports continued investment in both organic and inorganic growth while maintaining a robust balance sheet.”
Adjusted Operating Profit
£m
FY 2024/25
60.5
Gross profit on organic sales increase Organic gross margin impact Sales mix impact on gross margin Organic operational investment
3.4 0.9
(1.4) (4.4)
Simon Gibbins Group Finance Director
Organic profit reduction
(1.5)
Profit from acquired companies CER growth in operating profits
2.2 0.7
Foreign exchange impact
(0.2)
Net growth in operating profits
0.5
Revenue and orders Group sales of £443.3m were 5% higher than last year (both CER and reported) (FY 2024/25: £422.9m). Two acquisitions last financial year (Burster and Hivolt) and one this year (Storm) added 4% to revenue while the disposal of the Santon solar business completed last year reduced sales by 1%. Organic sales increased by 2% following an 18-month period of widespread customer destocking.
The order book at the year-end of £165m was strong, 5% higher than at 30 September 2025 and 2% higher than last year. At c.4.5 months of annualised second half sales, the order book provides good visibility for the first half of the new financial year. Group operating profit and margin Group adjusted operating profit for the year was £61.0m, a 1% increase on last year both at CER and on a reported basis (FY 2024/25: £60.5m) with an adjusted operating margin of 13.8%. This was 0.4ppts lower at CER than last year following investment in operations to fund future growth. Together with high margin acquisitions in the last 6 months, the annualised adjusted operating margin is ahead of last year and we remain on track to reach our target for FY 2029/30 of 17%. Group reported operating profit for the year (including acquisition and disposal-related expenses as discussed below within adjusting items) was £45.2m, 7% higher than last year (FY 2024/25: £42.4m).
FY 2025/26
61.0
Various manufacturing and operating initiatives continued this year helping lift individual business gross margins by 0.2ppts on average which was offset by the mix effect of stronger sales growth in our lower margin businesses (0.3ppts impact). We have invested in new sales and engineering resource and additional operating capacity (Thailand this year with India being completed during the first half next year, both on schedule and on budget) to aid future growth, with organic operating costs increasing by 3.5%. Operating profits of £2.2m were earned this year by last year’s two acquisitions (Hivolt acquired in August 2024 and Burster acquired in January 2025) during their first year of ownership and by Storm (acquired in December 2025).
Revenue (£m) Organic sales
FY 2025/26 FY 2024/25
%
427.3
419.4
+2% +4%
16.0
Acquisitions
Disposals
3.9
-1%
443.3
Sales at CER FX translation Reported sales
423.3
+5%
(0.4)
443.3
422.9
+5%
Adjusted tax rate The adjusted effective tax rate (“ETR”) for the year was 23.5%, 0.5ppts lower than last year (FY 2024/25: 24.0%) due to greater profits in lower tax territories. The overall ETR of 19.7% was lower than last year’s ETR (FY 2024/25: 23.1%) due to a low rate of tax on the net acquisition and disposal credit within adjusting items as shown in the table below.
Orders for the year were £447.8m, 9% higher at CER than last year and on a reported basis (FY 2024/25: £411.9m) giving a rising book-to-bill ratio of 1.01 (H2: 1.03; H1: 0.99 and 0.97 in the second half last year). Orders in the year increased by 5% organically (H2: +10%; H1: +0.5%).
FY 2025/26
FY 2024/25
FY 2025/26
FY 2024/25
£m
PBT
ETR
PBT
ETR
Operating profit
Finance Cost
Profit before tax
Operating profit
Finance Cost
Profit before tax
Adjusted
51.9
23.5%
50.1
24.0%
£m
Adjusted items Amortisation of acquired intangibles Acquisition & disposal credits/(expenses)
Adjusted
61.0
(9.1)
51.9
60.5
(10.4)
50.1
(16.3)
(16.2)
Adjusting items Amortisation of acquired intangibles
0.5
(1.9)
(16.3)
–
(16.3)
(16.2)
–
(16.2)
Reported
36.1
19.7%
32.0
23.1%
Acquisition & disposal credit/ (expenses)
0.5
–
0.5
(1.9)
–
(1.9)
Reported
45.2
(9.1)
36.1
42.4
(10.4)
32.0
34
35
discoverIE Group plc Innovative Electronics
Annual Report and Accounts for the year ended 31 March 2026
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