REG - TT Electronics PLC - Covid-19 Update

TT electronicsAnnouncement

03/04/2020 07:00

RNS Number : 6581I
  
TT Electronics PLC
  
03 April 2020
  
 

 
 
3 April 2020
 
TT Electronics plc
 
COVID-19 Update 
 
TT Electronics plc ("TT", "the Group"), a global provider of engineered electronics for performance critical applications, publishes this update given the current and rapidly changing developments regarding COVID-19.
 
Our employees, customers and business operations
 
The safety and well-being of our people, our wider communities, our customers and our partners remains our primary concern. We are following the advice of local authorities around the world as the situation develops whilst adopting the most stringent of safety standards to minimise the risk from the virus.
 
Across all of the Group's facilities we have implemented personal protection measures, including additional hygiene and social distancing, building on the lessons learned in our two Chinese facilities through January and February.  Our operations continue to design and manufacture products to meet the critical needs of our customers in medical, aerospace and defence markets including requirements for equipment to support front line medical operations. 
 
To date, disruption to the Group's trading performance from COVID-19 has been relatively modest. Our operations in China have quickly returned to full capacity with the supply chain supporting the return to this level of activity.  At this time nearly all of our facilities remain open save for three small facilities in Malaysia, Tunisia, and Barbados.
 
Given the uncertainty and the unknown duration of the COVID-19 pandemic and the reduced outlook for economic and industrial output globally, we have taken actions already to reduce costs and protect our cash flows. These actions include reductions to capital expenditure, other than for health, safety and environmental matters or to maintain production, a temporary hiring freeze and the curtailment of all discretionary expenditure. The members of the Board have agreed a 20% salary reduction, effective 1 April 2020, for a minimum of three months.
 
Financial position
 
The Group entered this period of uncertainty in a strong financial position.  As at 31 December 2019 it had:
 
·      Net debt excluding lease liabilities of £51.5 million
·      Net debt to EBITDA (pre-IFRS 16) of 0.9 times compared to a covenant maximum of 3.0 times
·      Interest cover (pre-IFRS 16) of 15.7 times compared to a covenant minimum of 4.0 times
·      £60.2 million of cash and £66.8 million of undrawn headroom on the Group's £180 million committed RCF facility. The Group's RCF matures in November 2023.
 
Dividend
 
Despite the Group's balance sheet strength and liquidity position, given the exceptional levels of uncertainty, and recognising the other mitigating actions the company is taking the Board considers it prudent to conserve cash and withdraw the recommendation to pay the proposed 2019 final dividend, thereby retaining £8.0m of cash in the business. We will review the decision in relation to the 2019 final dividend in the second half of this year once the outlook is clearer.
  
Board changes
 
Today TT has announced separately the appointment with immediate effect of Warren Tucker as a Non-executive director and Chairman elect. The appointment follows Neil Carson's previously announced intention to step down, having led the Board through a period of significant change. Neil will continue as Chairman until the conclusion of the Annual General Meeting on 6 May 2020.  Further, TT also announces that Stephen King will be stepping down from the Board in September 2020 after nine years of service.
 
Outlook and guidance
 
Given the demand uncertainty in our markets and the potential for disruption caused by COVID-19, we are withdrawing guidance for 2020. 
 
Commenting Richard Tyson, Chief Executive Officer said:
 
"We delivered a good performance in the first quarter whilst managing disruption in Asia. The period ahead is uncertain for everyone as the current global crisis develops and TT will not be immune, but our strategy has positioned TT well to deal with these challenges.  I am very proud of the outstanding response of our teams across the globe to COVID-19 and this has allowed us to continue to support our customers in critical industries."
 
 




For further information please contact:


 




TT Electronics plc        


Tel: +44 (0)1932 827 779




Richard Tyson, Chief Executive Officer
Mark Hoad, Chief Financial Officer
Julian Wais, Head of Investor Relations and Communications




 


 




MHP


Tel: +44 (0)20 3128 8100




Tim Rowntree / Rachel Mann




 


 



 
 
 



 
About TT Electronics
TT Electronics is a global provider of engineered electronics for performance critical applications. 
The company operates in industries where there are structural growth drivers, working with market-leading customers primarily in the industrial, medical, aerospace and defence sectors. Products designed and manufactured include sensors, power management devices and connectivity solutions. TT has design and manufacturing facilities in the UK, US, Sweden and Asia.
The company has three divisions. The Sensors and Specialist Components division works with customers to develop standard and customised solutions including sensors and power management devices. Our solutions improve the precision, speed and reliability of critical aspects of our customers' applications. The Power and Connectivity division designs and manufactures power application products and connectivity devices which enable the capture and wireless transfer of data. We collaborate with our customers to develop innovative solutions to optimise their electronic systems. The Global Manufacturing Solutions division provides manufacturing services and engineering solutions for our product divisions and to customers that often require a lower volume and higher mix of different products. We manufacture complex integrated product assemblies for our customers and provide engineering services including designing testing solutions and value-engineering. 
Cautionary statement
This update contains forward-looking statements. These have been made by the directors in good faith based on the information available to them up to the time of their approval of this update. The directors can give no assurance that these expectations will prove to have been correct. Due to the inherent uncertainties, including both economic and business risk factors underlying such forward-looking information, actual results may differ materially from those expressed or implied by these forward-looking statements. The directors undertake no obligation to update any forward-looking statements whether as a result of new information, future events or otherwise.


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