REG - TT Electronics PLC - Divestment of selected business units

TT electronicsAnnouncement

04/03/2024 07:00

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RNS Number : 3635F  TT Electronics PLC  04 March 2024

 

 

4 March 2024

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION

 

TT Electronics plc

 

Divestment of selected business units

 

TT Electronics plc ("TT", "the Group"), a global provider of engineered
electronics for performance critical applications, today announces it has
reached an agreement to sell three business units within the GMS and Power and
Connectivity divisions to the Cicor Group for a cash consideration of £20.8
million on a cash and debt free basis(1), subject to normal completion account
adjustments (the "Transaction").

 

The divestment relates to business units in Hartlepool and Cardiff, UK and
Dongguan, China which provide electronics manufacturing services ("EMS") and
certain connectivity products, principally to industrial clients (the
"Transaction Group").

 

Key highlights of the Transaction:

 

·    Cash consideration of £20.8 million on a cash and debt free basis;
subject to normal completion account adjustments

·    Proceeds from the disposal will reduce TT's existing debt

·    Expected operating margin enhancement of c. 50-70 basis points

·    Simplified operational footprint for the Group

 

The divestment reflects the Board's continued efforts to improve the quality
of earnings, strengthens the balance sheet and will allow the Group to focus
on growth opportunities in its core businesses and end markets to deliver
value for all stakeholders.

 

The Transaction is expected to complete by the end of Q1 2024 subject to the
completion of certain organisation restructuring steps.

 

The Cicor Group (SIX Swiss Exchange: CICN) is a global provider of electronic
solutions with approximately 2,700 employees.

 

Peter France, TT Chief Executive Officer commented:

 

"We are focused on being a more profitable and resilient business underpinned
by a strong balance sheet and operating in attractive growth markets.

 

This simplification of our portfolio will further improve our financial
profile and allows TT to focus on delivering value to our stakeholders by
focusing on our core growth markets, strengthening the balance sheet and
driving margin progression. Today's announcement demonstrates our disciplined
approach to our portfolio and provides a good home for our colleagues
transferring to Cicor.

 

I would like to thank the teams who will transfer across to Cicor for their
hard work and wish them continued success."

 

Information on the Transaction Group

For the year ended 31 December 2022 the Transaction Group generated £72.5
million of revenue and a loss before tax of £0.7 million(2). As at 30 June
2023 the Gross Assets of the Transaction Group were £85.4 million.
Consequently, the Transaction is expected to result in a one-off held for sale
write down expense for the Group in its FY23 accounts of circa £32
million(3).

 

 For further information please contact:

 TT Electronics plc                        Tel: +44 (0)1932 827 779
 Peter France, Chief Executive Officer

 Mark Hoad, Chief Financial Officer

 Kate Moy, Head of Investor Relations and Communications

 MHP                                       Tel: +44 (0)20 3128 8100
 Tim Rowntree / Ollie Hoare

 

Notes:

 

1.   Proceeds net of transaction costs are expected to be circa £17.8
million

2.   Including an allocation of Group and central costs, the Transaction
Group generated a loss before tax of £2.1 million

3.   Subject to completion of audit

4.   TT will announce its full year results on 7 March 2024

 

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, North America and Asia.

The company has three divisions. 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. 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.

 

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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