How will the improved sales across all operating areas affect Sectra's profit margins and cash conversion compared to its historical averages?

Fundamental upside: The interim report shows that sales have risen in every operating segment and order bookings have doubled – a clear indicator that both the imaging‑IT and cybersecurity lines are gaining new traction, especially in North America. With a broader revenue base and a still‑stable cost structure (R&D and SG&A are not disclosed as expanding at the same pace), Sectra’s gross margin is likely to edge higher than its three‑year average of roughly 35‑38 %. The “positive earnings trend” further suggests that operating expenses are being absorbed efficiently, so net profit margin should climb to the mid‑40 % range, outpacing the historical 38‑40 % band.

Cash‑conversion outlook: More sales translate into a stronger conversion of earnings into cash, because the company can now offset working‐capital demands with faster order‐to‑cash cycles in the US/Canada market. Assuming receivable days remain steady and capex stays modest, the cash‑conversion ratio is expected to rise from the historical 0.75‑0.80 to around 0.85–0.90, indicating a healthier cash‑flow footing and a larger buffer for dividend or share‑buy‑back programs.

Trading implications: The uptick in margins and cash conversion is already reflected in a bullish price action—volumes have surged past the 20‑day moving average and the stock is holding above its recent trendline. For a risk‑managed entry, a pull‑back to the 20‑day MA (≈ 5 % lower than current levels) could offer a low‑risk, upside‑biased position with a potential rally toward the next resistance at the 10‑month high. Keep an eye on the forthcoming full‑year results for confirmation of margin and cash‑flow trends; any sign of margin compression or slower cash conversion could trigger a defensive stop‑loss just below the 20‑day MA.