REG - TT Electronics PLC - Full Year Results
10/04/2025 07:00
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RNS Number : 4316E TT Electronics PLC 10 April 2025
2024 Final Results, 10 April 2025
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION
FOR IMMEDIATE RELEASE
TT Electronics plc
Results for the year ended 31 December 2024
For further information, please contact:
TT Electronics
Warren Tucker, Chairman
Mark Hoad, Chief Financial Officer
Eric Lakin, Acting Chief Executive Officer
Kate Moy, Head of Investor Relations and
Communications Tel: +44 (0)1932 827 779
MHP
Tim Rowntree / Ollie
Hoare
Tel: +44 (0)7817 458804
A management presentation for analysts and investors will be held today at
0830hrs and can be accessed on https://brrmedia.news/TTG_FY_2024
(https://protect.checkpoint.com/v2/___https:/brrmedia.news/TTG_FY_2024___.bXQtcHJvZC1jcC1ldXcyLTE6bmV4dDE1OmM6bzo0MGI0ZmJiODY0NDE5MWNmMzE5ODdkNzg3NjIzM2ZhYjo2OjZiMzg6YWNjMjM4M2ZhYTM2OTZmN2FjYWJlNTM0MTFkYjk4NjkzNGEwNWZkYzgwNWMyZTcxYTZjMDk4NmUyMjUwOGE2NzpwOkY6Tg)
A recording of the presentation and Q&A session will be available on the
website later in the day.
A PDF of this full year announcement is available for download from
https://www.ttelectronics.com/investors/investor-highlights/reports-presentations-videos/
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.
Results for the year ended 31 December 2024
Good strategic progress offset by North America challenges
£ million (unless otherwise stated) Adjusted Results(1) Statutory Results
2024 2023 restated(2) Change Change constant fx 2024 2023 restated(2)
Revenue 521.1 613.9 (15)% (13)% 521.1 613.9
Revenue ex divestment 505.0 545.3 (7)% (5)%
Operating profit 37.1 47.1 (21)% (17)% (23.5) 3.0
Operating profit ex divestment 37.3 45.2 (17)% (13)%
Operating profit margin 7.1% 7.7% (60)bps (40)bps (4.5)% 0.5%
Operating profit margin ex divestment 7.4% 8.3% (90)bps (70)bps
Profit/(loss) before taxation 27.2 37.3 (27)% (23)% (33.4) (6.8)
Earnings/(loss) per share 11.0p 16.7p (34)% (30)% (30.2)p (6.4)p
Return on invested capital 10.0% 10.9%
Cash conversion 117% 104%
( ) 2024 2023(2)
Free cash flow(1) 27.7 23.9
Net debt(1) 97.4 126.2
Leverage(1) 1.8x 1.9x
Dividend per share 2.25p 6.8p
Financials
· Revenue at constant currency, down 2% excluding unwind of
pass-through revenue, 5% down organically
o Growth from Europe and Asia offset by North American region
· Adjusted operating profit down 17% at constant currency to £37.1
million (£37.3 million excluding Project Albert divestment)
o Cost action taken in year to address impact of weakness in components
market
· Adjusted operating margin 7.1%, 7.4% ex Project Albert divestment
including severance costs of £2.3m
o Strong European delivery with margin up 580 bps to 12.9%
o Asian margin improved 400 bps to 15.0%
o North American performance impacted by subdued components market and
operational challenges
· Statutory operating loss £23.5 million, including £52.2 million
write down of goodwill and fixed assets in North America
· Statutory basic EPS of (30.2)p
· £11.2 million UK pension surplus (net of tax) returned to Company -
progressing towards final stages of buy-out
· Cash conversion at 117%, strong free cash flow of £27.7 million
resulting in net debt reduction and leverage of 1.8x, within 1-2x target range
Project Dynamo
· £17 million of potential benefits from cost savings and margin
improvement identified by 2026, net of £4 million for reinvestment. Progress
evident in Europe and Asia
· Eight key workstreams underway to drive productivity and efficiency,
immediate focus on operational execution issues in two North American sites
· Inventory management project delivered £13 million reduction in 2024
with a further £15 million reduction in net inventory expected by end of 2026
Going Concern
· Expect to be compliant with covenants in base and severe downside
cases
· Uncertain and volatile macroeconomic backdrop which could have an
impact beyond severe downside case creating material uncertainty over going
concern in certain extreme scenarios (see page 28)
Outlook Statement
In 2024, our European and Asian regions have delivered strong improvements in
profitability. However, this progress has been more than offset by continued
demand softness in our components business in North America and operational
issues in Kansas City and Cleveland.
The Board is mindful of the increased market uncertainty arising from the
recently announced trade tariffs and the potential impact on demand patterns.
Given the current macro backdrop the Board sees a wider range of potential
outcomes for 2025. We remain resolutely focused on our operational improvement
plan, Project Dynamo, and our clear action plan to improve operational
efficiency and productivity however the current uncertainty has increased the
downside risk for the Group and the Board now expects adjusted operating
profit to be in the range of £32 million to £40 million.
The Board also remains focused on driving performance towards its medium-term
financial framework and while it does not expect to achieve a 12% operating
margin in 2026, its confidence in the medium-term for the business is
underpinned by its operational improvement plans, expectation of continued
momentum in Europe and Asia, and an anticipated improvement in the North
American region.
About TT Electronics
TT Electronics is a global provider of engineered electronics for performance
critical applications.
TT solves technology challenges for a sustainable world. TT benefits from
enduring megatrends in structurally high-growth markets including healthcare,
aerospace, defence, electrification and automation. TT invests in R&D to
create designed-in products where reliability is mission critical. Products
designed and manufactured include sensors, power management and connectivity
solutions. TT has design and manufacturing facilities in the UK, North
America, and Asia.
Notes
1. Throughout this announcement we refer to a number of alternative
performance measures which provide additional useful information. The
Directors have adopted these measures to provide additional information on the
underlying trends, performance and position of the Group with further details
set out on pages 19 to 20. The adjusted measures used are set out in the
"Reconciliation of KPIs and non IFRS measures" section on pages 45 to 56.
2. The reported operating profit for 2023 has been restated by £(5.7)
million as described further in note 2. This is principally related to our
Cleveland site where, as part of our project to address operational execution
challenges, we identified issues in relation to the recoverability of certain
assets recognised in prior periods at this site in North America.
The person responsible for making this announcement is Mark Hoad, Chief
Financial Officer, TT Electronics plc.
BUSINESS AND STRATEGIC REVIEW
Introduction
2024 has been a challenging year for the Group with strong performances in
Europe and Asia offset by difficult market conditions in our shorter cycle
components business as well as operational challenges, impacting North America
in particular. We would like to thank our colleagues for their hard work in
often very difficult circumstances.
On an organic basis revenue was down 2 per cent excluding the unwind of
pass-through revenue and the impact of Project Albert, the divestment of our
business units in Cardiff and Hartlepool, UK and Dongguan, China which
completed at the end of Q1 2024. Adjusted operating margin of 7.1 per cent was
down 40 basis points on a constant currency basis but was 7.4 per cent
excluding the Project Albert divestment. Adjusted operating profit included
circa £2.3 million of severance costs expensed.
The performance of our Europe and Asia regions was excellent with organic
growth of 14 per cent and 6 per cent excluding pass-through respectively. The
operational leverage on this growth, coupled with strong efficiency
improvements in a number of sites resulted in strong margin improvement in
both regions. This was further enhanced as a result of the divestment of
margin dilutive businesses at the end of the first quarter.
In North America, distributor de-stocking, which has continued for longer than
originally expected, had a significant impact on demand for our components
products. We took cost action, reducing headcount by almost 400 in the first
half equating to £9 million of annualised benefit, to offset the lower
demand; the £1.7 million severance costs were incurred within adjusted
operating profit in the period. In the second half we took further cost action
reducing headcount by a further 100 heads (severance costs of £0.6 million)
and bringing the annualised benefits to £12 million in total. Furthermore, we
experienced operational execution issues in two North American sites,
Cleveland and Kansas City. This, combined with the performance of the
component business created a significant profit shortfall in North America. In
light of this trading performance and reflecting a revised view of recovery,
we have booked a £52.2 million non-cash write-down being a £36.7 million
non-cash impairment of goodwill for the region and £15.5 million write-down
in respect of assets within a North American components site.
In terms of our end markets, there was strong growth in Aerospace &
Defence, up 27 per cent organically and Automation & Electrification
markets were flat organically, excluding pass-through revenues. Healthcare
revenues decreased by 14 per cent organically, or 7 per cent excluding zero
margin pass-through revenues. Revenues from Distribution, which is the main
route to market for our components business, reduced by 27 per cent
organically.
Book to bill in the year was positive at 103 per cent and order intake was 9
per cent higher than the prior year on an organic basis.
The successful divestment of the Hartlepool, Cardiff and Dongguan businesses
(Project Albert) completed in the first half supporting improvement in Group
margin, and we have re-organised the business from three divisions to a
function-led regional structure which will enable improved business
performance.
Significant benefits will be delivered through our self-help programme,
Project Dynamo, through eight initial workstreams across the Efficiency,
Growth and Innovation headings. Of the opportunities we have scoped to date,
we expect cost savings and margin improvements of £17 million, net of £4
million of reinvestment in the business, to drive long term growth and
underpin our medium-term targets.
There are eight areas of near-term focus under Project Dynamo which can be
summarised under the headings:
· SG&A savings
· Logistics & Energy
· Inventory management
· Make vs Buy & Asset optimisation
· Cost of Production
· Commercial - Pricing
· Pipeline expansion & Sales growth
· Innovation
Our focus on building close, long-term relationships further up the value
chain and collaborating on design-led solutions often leads to us being
designed in for the life of the product. This is evidenced by new business,
with 58 significant new wins in the year delivering over £150 million of
potential lifetime revenues and further key customer growth from pipeline
opportunities. Furthermore, we believe we are well placed, with our broad
geographic footprint, to offer our customers choice and support their
near-shoring activities.
Following the success of adding manufacturing services into Kuantan, Malaysia,
we have taken the same, low capital intensity model and established these
capabilities within our existing facility in Mexicali, Mexico. Here, Surface
Mount Technology (SMT) equipment has been installed, teams have been trained
and initial product qualification has been completed. We are also in the
process of increasing further our capacity within our Malaysian facility in
advance of anticipated customer demand growth and transfer of programmes from
other sites. The preparation and transfer of work, together with associated
one-off costs, will take place over the course of 2025 with revenue being
delivered from Malaysia from 2026.
Environmental, social and governance ("ESG") principles are central to our
purpose, and our growth expectations partly reflect opportunities presented by
the move to a lower carbon world for our design-led technologies. We have made
further excellent progress in 2024 to reduce our Scope 1 & 2 carbon
emissions, down 23 per cent (adjusting for the impact of the Project Albert
divestment); a 73 per cent reduction against our 2019 baseline. More detail on
page 10.
Results and operations
Revenue for the year was £521.1 million, 13 per cent lower than the prior
year at constant currency. Excluding the impact of the Project Albert
divestment and lower pass-through revenue, Group revenue was down 2 per cent.
Reported revenue included £5.3 million of zero margin pass-through revenues,
a £13.5 million reduction on 2023 at constant currency. This relates to
materials where we experienced very significant cost inflation during the
supply chain problems which were being transparently passed on to customers
with no margin mark-up.
Adjusted operating profit was £37.1 million, 17 per cent lower than the prior
year at constant currency, reflecting the significant headwinds in our
components business and operational execution issues in our North American
region. Adjusted operating margin of 7.1 per cent was down 40 basis points on
a constant currency basis but was 7.4 per cent excluding the Project Albert
divestment. Adjusted operating profit included circa £2.3 million of
severance costs expensed. After the impact of adjusting items, including
pension restructuring, and non-cash asset impairment costs, the Group's
statutory operating loss was £23.5 million (2023 restated: £3.0 million
profit) and operating margin was (4.5) per cent (2023 restated: 0.5 per cent).
Non-cash write-down costs totalled £52.2 million (2023: £32.5 million
relating to businesses held for sale in our IoT Solutions and GMS CGUs) being
a £36.7 million non-cash impairment of goodwill for the region and £15.5
million write-down in respect of assets within a North American components
site. This is linked to revised forecasts for the business in the context of
our recent trading performance and based on a revised recovery assumption.
As at 31 December 2024 we derecognised £16.0 million of deferred tax assets
reflecting the recent performance and near term outlook for the North American
region. The associated tax losses remain available to the Group once the North
American region returns to taxable profit.
The reported operating profit for 2023 has been restated by £(5.7) million as
described further in note 2. This is principally related to our Cleveland site
where, as part of our project to address operational execution challenges, we
identified issues in relation to the recoverability of certain assets
recognised in prior periods at this site in North America. We are
strengthening the local finance team and actions to address the associated
control deficiencies are being incorporated into our ongoing work to improve
the effectiveness of our internal controls over financial reporting. Cash flow
impacting adjusting items totalled £0.6 million (2023: £ 4.0 million)
Adjusted earnings per share ("EPS") reduced to 11.0 pence (2023 restated: 16.7
pence), reflecting the reduced adjusted operating profit in the period.
Basic EPS was a 30.2 pence loss (2023 restated: 6.4 pence loss).
Cash conversion improved to 117 per cent (2023 restated: 104 per cent)
including the benefit of a £12.8 million inflow from inventory reduction
delivered as part of the Project Dynamo workstream which targeted a £15
million reduction in 2024 and a further £15 million by the end of 2026. Good
cash conversion also reflects lower capital expenditure levels given
management actions taken in the second half, to significantly reduce cash
outflows from discretionary spend. There was a total working capital outflow
of £1.2 million (2023 restated: £6.8 million inflow). There was a free cash
inflow of £27.7 million in the year (2023: £23.9 million inflow) as a result
of these factors and the benefit of a further surplus refund from the UK
defined benefit pension scheme as detailed below. The strong free cash flow
performance, together with the proceeds from the Project Albert divestment,
contributed to leverage remaining within our stated 1-2x range despite the
reduction in adjusted EBITDA. Adjusted operating cash inflow post capital
expenditure during the period was £43.4 million (2023: £48.8 million
inflow). On a statutory basis, cash flow from operating activity was an inflow
of £51.2 million (2023: £62.9 million inflow).
Following the buy-in of our UK defined benefit pension scheme (the "Scheme")
in November 2022, the Scheme was de-risked with scheme liabilities matched by
the buy-in insurance policy. There remains a small surplus of £7.1 million at
31 December 2024, following a further £15.0 million gross return to the
Company in December 2024, in addition to the gross return of £5.0 million in
2023 (£11.2 million and £3.2 million respectively net of tax). Workstreams
to finalise all details of the buy-in and transfer all scheme data to Legal
and General are well progressed and we are now planning the steps to move to
buy-out after which we can proceed with the wind up of the scheme.
We completed the buy-out of our smaller US defined benefit scheme for a cash
contribution of £1.8 million in January 2024. This leaves the UK Scheme
nearing buy-out and there is just one small £1.5 million unfunded US scheme
remaining.
At 31 December 2024 net debt was £97.4 million (31 December 2023: £126.2
million), including IFRS 16 lease liabilities of £17.3 million (31 December
2023: £20.8 million), and leverage was stable at 1.8x (31 December 2023
restated: 1.9x). We expect leverage to reduce during 2025.
Our return on invested capital was 10.0 per cent (2023: 10.9 per cent), with
the benefit of the Project Albert divestment more than offset by the reduction
in adjusted operating profit.
On 4 March 2024 we announced the divestment of our business units in Cardiff
and Hartlepool, UK and Dongguan, China. After costs of disposal and normal
working capital adjustment, the divestment realised net proceeds of £12.2
million. The loss on disposal was £4.4 million.
Dividend
Given the current uncertainty over the macro-economic environment and
associated business risks, the Board has concluded that it is prudent to pause
the dividend and will not be recommending a final dividend for 2024.
Going Concern
In determining the appropriate basis of preparation of the financial
statements, the Directors are required to consider whether the Group can
continue in operational existence for the foreseeable future.
After making enquiries and having considered forecasts and appropriate
sensitivities, the Directors have established that in a base case and a severe
downside scenario, there is a reasonable expectation that the Group would
remain compliant with covenants and has adequate resources to continue in
operational existence for the period to 30 June 2026. Accordingly, the
accounts have been prepared on a going concern basis.
However, the recent introduction of US global tariffs and certain retaliatory
tariffs provide an uncertain and volatile macroeconomic backdrop which could
have an impact beyond that assumed in the severe downside case. This has led
the Board to conclude that it is not possible to be certain of meeting the
covenant test in certain extreme scenarios, in particular where customer
reticence in placing orders against the backdrop of tariff uncertainty reduces
order intake. Even in this scenario, the Company would seek to negotiate an
adjustment to its covenants. These matters represent a material uncertainty
which may cast doubt upon the Group's ability and the Company's ability to
continue as a going concern for the period up to 30 June 2026. The financial
statements do not contain the adjustments that would result if the Group and
Company were unable to continue as a going concern.
More information on the going concern judgement can be found in note 2 to the
financial statements.
Strategy
Our purpose is to engineer and manufacture electronic solutions enabling a
safer, healthier and more sustainable world.
Our strategy is focused on unlocking value for our stakeholders through
disciplined execution. We will achieve this through a focus on four key areas:
· Focusing on efficiency to boost productivity and reduce costs
· Enhancing collaboration and commercial focus, facilitated by moving
to a function-led regional structure
· Promoting innovation, design, engineering and manufacturing expertise
· Developing our people, products and market positioning to propel
sustainable growth
A focus on improved execution, supported by the move from our previous
divisional structure to a function-led regional structure, has started to
leverage our strong engineering and manufacturing capabilities to unlock value
and improve returns. This focus will drive enhanced performance and underpins
our medium-term financial targets:
· Revenue growth ahead of end market growth of 4-6%
· 12% adjusted operating margin
· Strong cash conversion of 85%+
· ROIC target of mid to high-teens
PROJECT DYNAMO
We have made good progress on Project Dynamo as we target £17 million of
potential benefits from cost savings and incremental margin, net of £4
million of planned reinvestment in the business. As part of our inventory
management workstream, we delivered a £12.8 million cash benefit from
inventory reduction in 2024 and expect a further £15 million reduction by the
end of 2026.
All sites have rolled out Project Dynamo communications and set up
Company-wide teams and processes. Any employee can submit an idea for
improvement under the efficiency, growth and innovation categories which is
evaluated by the site and can also be promoted to a region or group project
for implementation.
We can see good margin progression in our European and Asian regions that
support our view that the Dynamo initiatives are having a positive impact and
give us confidence in delivering the £17 million of benefit by 2026.
The eight key project workstreams are:
SG&A savings:
At our Capital Markets Event in April, we shared that we had identified £5-6
million of annual SG&A savings, many of which were actioned during 2024 to
achieve £2 million savings in the year and we now expect to realise a run
rate saving of £6 million in 2026. This included travel savings, headcount
savings and pension and other discretionary savings.
Logistics & Energy:
We have already made savings in logistics, particularly inbound freight costs,
where we have consolidated down from multiple freight suppliers to a limited
number of preferred suppliers. We have also secured upside, particularly in
the UK, through centralised buying of forecasted energy demand across our
sites.
Inventory management:
During 2024 we have completed an inventory process diagnosis and implemented
improvement actions including a review of key parameters such as processing
times and safety stock. We have focused on our factory planning capabilities
revising lead times and capacity models and believe there is improvement
potential in some of our order management procedures.
Short term actions taken to reduce inventory include:
· Group oversight with seven sites placed in special measures
· site by site inventory reduction plans; and
· high frequency reviews to ensure delivery of reduction plans.
We are also focused on medium term structural actions which include:
· setting standard TT ways of working for planning and demand
management
· site by site planning and scheduling capability assessments; and
· disciplined execution of plans to close gaps.
These actions will improve our inventory health over time and drive increased
inventory turns. The inventory reduction of £12.8 million in the year
supported our improved second half working capital performance and full-year
cash conversion, and we are targeting an additional £15 million reduction in
net inventory by the end of 2026.
Make vs Buy & Asset optimisation:
We have identified more than £30 million of external spend on areas such as
machining, calibration testing, connectors and PCBAs, which has the potential
to be insourced. We plan to insource around a third of this spend and are
reviewing the most cost-effective locations to manufacture our products to
serve global markets. Short term, we have been prioritising the operational
improvement plans.
Cost of Production:
Of our 18 manufacturing locations, there are four sites, previously
identified, with specific cost of production issues and the opportunity for
improvement. The product mix in Cleveland and Kansas City, in our North
America region, has become increasingly complex and this highlighted
underlying inefficiencies, inadequate capacity planning and scheduling, and is
exacerbated by factory layouts. A focus on strengthening planning and
inventory management, adding specialist resource and reducing the costs of
re-work and improving process yield, will contribute to the required
performance improvement. In Kansas City, the operational improvement plan is
already delivering with factory layout improvements facilitating increases in
throughput on affected production lines. Given the strength of the order book
here, we expect a significant step up in the productivity of the engineering
team in 2025 and improved efficiency.
The improvement plan for Cleveland is underway but the full benefits will take
longer to realise than originally anticipated. The site leadership team will
be at full strength during Q2 and key workstreams such as cost reduction, a
thorough overhaul of demand, production and resource planning and inventory
control is being rolled out. There will be further learnings to implement in
due course from lean processes.
Commercial - Pricing:
We have identified a number of contracts where the margin is below our
expectation and the new sales organisation and operations teams are working
together to address them. Actions taken through 2024 have included increasing
pricing, focused efficiency improvements and transfers to lower cost sources
and we are seeing the benefits of this in our European margin improvement.
Pipeline management and sales growth:
We have deployed a global sales and business development structure to enable
us to sell all of TT's engineering and manufacturing capability to our global
customer base. The previous divisional structure was a barrier to us capturing
the full benefits of a global approach.
The function-led regional structure is already increasing the pipeline with a
fully integrated transfer of opportunities between the regions, adding
vertical integration options and the ability to cross-sell other products
within the TT portfolio using existing sales relationships.
Additionally, the function is targeting improvements in forecasting, quote
turnaround and responsiveness to support the changing needs of our customers.
Innovation:
We prioritise organic investment in the business, investing in R&D and
capital equipment to drive differentiation in our offer to customers,
resulting in us becoming firmly embedded as valued partners on long-term
programmes. This expenditure totalled £18.2 million in 2024 (2023: £33.2
million) including £11.3 million (2023: £10.8 million) in R&D spend,
representing 4.2 per cent (2023: 3.4 per cent) of the aggregate product
revenues. Capital expenditure was reduced in the year in response to the
trading performance.
While we expect the majority of innovation benefits under Project Dynamo to be
realised over the longer term, we have already made good progress with the
establishment of an Engineering function with key roles appointed. Product and
technology roadmaps have been established for all sites and the process and
software standardisation is expected to deliver savings and make collaboration
easier. This has also enabled us to reprioritise resources and projects
consistently across the business to deliver key programmes sooner, and to stop
certain activities where the economic payback was uncertain.
A great example of our teams starting to collaborate across regions is our
Kansas City site in the US and Manchester in the UK working together to
respond to a request for a quotation from a market leading Aerospace &
Defence player for a power converter system. We are using power electronics
technology developed in Kansas City combined with the technology developed in
the UK; this includes a high to low voltage conversion which was developed
under the ATI programme AEPEC (Aerospace Electric Propulsion Equipment) and is
being further developed in FABB-HVDC (Future Aircraft Building Blocks for High
Voltage DC). This allows TT to offer tailored power solutions for our
customers' unique programme requirements by leveraging our global capability.
DEVELOPING OUR PEOPLE, PRODUCTS AND MARKET POSITIONING FOR SUSTAINABLE GROWTH
Not only do we engineer and manufacture electronic solutions that enable
reduced environmental impacts for our customers, but we are moving at pace to
reduce our own impact, in terms of our carbon emissions. In April this year,
we brought forward our Net Zero target, for our Scope 1 & 2 emissions, to
2030, from the original objective of 2035. We remain on track to deliver this
target. In 2024 we achieved a further 29 per cent year over year reduction in
our Scope 1 & 2 carbon emissions; a 73 per cent reduction from our
baseline set in 2019.
All our sites that are able to purchase electricity on renewable tariffs are
now doing so. We have solar schemes operational at our sites in Kuantan,
Malaysia and Mexicali, Mexico, and we completed commissioning our most recent
scheme in Suzhou, China during 2024. Further reductions in our carbon
emissions will require other measures such as infrastructure and process
projects to reduce electricity consumption and further investment in solar
power or other renewables and we will be ready to benefit from renewables
gradually coming on stream in regulated Asian markets. Each of our
manufacturing sites has its own energy efficiency plan to include further
rolling out of LED lighting, eliminating waste electricity, replacing
inefficient legacy equipment or reorganising space to save heating/lighting
and managing shift patterns.
In addition to our work on CO(2) emissions we are also committed to reducing
our impact on the environment due to use of precious resources such as water,
use of single-use plastics and our waste to landfill.
ESG matters including culture, strategy, regulatory compliance, risk and
internal controls are controlled as part of our overall governance and risk
management frameworks, ultimately overseen by senior management and the Board.
An update on key health, safety and environmental (including sustainability)
metrics is provided at each Board meeting and in-depth reviews are undertaken
on at least an annual basis.
Engaging employees by continually building our culture, communicating,
listening and supporting is an important part of what we do every day. We
encourage our teams to take an active role in their local and national
communities, whether fundraising and volunteering for chosen charities or
committing time and resources to promoting STEM education and careers.
Typically, we undertake employee engagement surveys every two years, the next
one being due in 2026 when we will transition to a new employee survey
methodology. Our most recent Group-wide survey in 2023 resulted in an employee
engagement score in line with the three-star "world class companies to work
for" Best Companies Ltd benchmark. This three-star rating is the highest level
achievable. In 2024 we have undertaken a series of pulse surveys; we believe
it is a testament to the strength of our culture and approach to engagement
that some of our sites hardest hit by change have retained excellent employee
survey ratings through this period.
Following the implementation of the new regional structure in 2024, we
launched our annual Voice of the Customer satisfaction survey, which closed in
November. A refreshed approach to our Voice of the Customer strategy combined
with the efforts of our regional teams resulted in record-breaking customer
participation and a 7-point NPS score improvement.
Our continuing progress on ESG matters is recognised externally, with a rating
of "AA" in the latest MSCI ESG Ratings assessment.
CFO Transition
Further to the announcement made on 25 February we confirm that effective
today, Mark Hoad retires as CFO and steps down from the Board, with Eric
Lakin appointed as CFO and as a member of the Board. Mark will remain
available to the Company until 30 September 2025.
Outlook
In 2024, our European and Asian regions have delivered strong improvements in
profitability. However, this progress has been more than offset by continued
demand softness in our components business in North America and operational
issues in Kansas City and Cleveland.
The Board is mindful of the increased market uncertainty arising from the
recently announced trade tariffs and the potential impact on demand patterns.
Given the current macro backdrop the Board sees a wider range of potential
outcomes for 2025. We remain resolutely focused on our operational improvement
plan, Project Dynamo, and our clear action plan to improve operational
efficiency and productivity however the current uncertainty has increased the
downside risk for the Group and the board now expects adjusted operating
profit to be in the range of £32 million to £40 million.
The Board also remains focused on driving performance towards its medium-term
financial framework and while it does not expect to achieve a 12% operating
margin in 2026, its confidence in the medium-term for the business is
underpinned by its operational improvement plans, expectation of continued
momentum in Europe and Asia, and an anticipated improvement in the North
American region.
REGIONAL REVIEW
EUROPE
2024 2023 Change Change constant fx(1)
Revenue £146.3m £169.6m (14)% (14)%
Revenue ex divestment £134.5m £118.3m 14% 14%
Adjusted operating profit(1) £18.9m £11.9m 59% 58%
Adjusted Operating profit ex divestment £19.4m £11.7m 66% 64%
Adjusted operating margin(1) 12.9% 7.0% 590bps 580bps
Adjusted operating margin ex divestment(1) 14.4% 9.9% 450 bps 440 bps
( )
(1 )See note 2 on page 29 for an explanation of alternative performance
measures. Adjusting items are not allocated to divisions for reporting
purposes. For further discussion of these items please refer to note 7 on
page 38 of this document.
Revenue decreased by £23.3 million to £146.3 million (2023: £169.6 million)
but excluding the divestment of the Hartlepool and Cardiff locations, as part
of Project Albert, organic revenue was 14% higher at £134.5 million (2023:
£118.3 million) driven by increased demand from the Aerospace & Defence
market.
Adjusted operating profit increased by £7.0 million to £18.9 million (2023:
£11.9 million) given healthy levels of operational leverage on the organic
growth and efficiency improvements from Project Dynamo. Excluding the impact
of Project Albert organic adjusted operating profit increased by 64 per cent
and adjusted operating margin increased 440 basis points to 14.4 per cent
(2023: 9.9 per cent).
Overall order intake remains strong. As we look into 2025, we expect continued
revenue growth supported by a strong order book.
Contract awards and growth drivers during the year, giving us confidence as we
look forward, include:
Innovate UK - Sustainable aviation tech win
TT has won a grant over three years from Innovate UK for the development of
high voltage power conversion technology, which will support a range of future
aerospace platforms for leading Aerospace OEMs. TT received the funding award
as part of a £200 million joint government and industry investment plan to
boost British manufacturing and R&D. The funding is being awarded to
Aerospace R&D projects across the UK that support the development of
energy-efficient and zero-carbon aircraft technology and accelerate the
transition to net zero aviation.
Medical device
Our Bedlington team has secured a two-year contract from a medical device
innovator for the production of high voltage chip resistors. These resistors
will support one of the newest, most modern automated external defibrillators.
Defence
A leading defence contractor and long-time customer has awarded TT a new
contract for custom, radiation-hard microcircuit hybrids that support an
inertial measurement unit used on various defence platforms. This latest award
reflects the collaborative relationship that has grown over seven years and
the customer's recognition of our advanced capabilities to produce complex
electronic solutions for use in high-reliability applications in harsh
environments.
Energy technology
A customer in the energy technology sector has awarded TT a new contract for
custom test equipment used for offshore, sub-sea oil and gas production. TT's
Barnstaple facility will design and manufacture the new test technologies,
which will enable the customer to integrate and test equipment in the platform
and factory environment. The success of this win has resulted in the customer
awarding TT an additional contract with similar requirements.
NORTH AMERICA
2024 2023 restated Change Change constant fx(1)
Revenue £184.4m £229.5m (20)% (17)%
Adjusted operating profit(1) £(2.7)m £19.4m (114)% (115)%
Adjusted operating margin(1) (1.5)% 8.5% (1000)bps (980)bps
(1 )See note 2 on page 29 for an explanation of alternative performance
measures. Adjusting items are not allocated to divisions for reporting
purposes. For further discussion of these items please refer to note 7 on
page 38 of this document.
Note: No divestment impact here. The reported operating profit for 2023 has
been restated by £(5.7) million as described further in note x . This is
principally related to our Cleveland site where, as part of our project to
address operational execution challenges, we identified issues in relation to
the recoverability of certain assets recognised in prior periods at this site
in North America.
Revenue reduced by £45.1 million to £184.4 million (2023: £229.5 million)
reflecting significant volume headwinds in our components' businesses
impacting the region. In the sites serving the components market, significant
cost action has been taken, to mitigate the volume declines experienced.
Adjusted operating profit decreased by £22.1 million to a loss of £2.7
million (2023 restated: £19.4 million profit) including a £1.0 million
foreign exchange headwind. The adjusted operating profit margin was (1.5) per
cent (2023 restated: 8.5 per cent) reflecting the impact of volume declines in
higher margin component lines and associated factory inefficiencies and
operational issues in Kansas City and Cleveland. Excluding severance costs,
adjusted operating margins were (0.6) per cent.
We have a clear remediation plan well underway to resolve the operational
issues experienced in two sites with various workstreams in train. In Kansas
City we are seeing the improvements coming through. The improvement plan for
Cleveland, which involves process refinements together with headcount
reductions, underpinning the required productivity improvements, are underway
but the full benefits will take longer to realise than originally anticipated
and exacerbated by £10 million of revenue which has moved from 2025 into the
2026 order book.
In response to the prior year adjustments, we are strengthening the local
finance team and actions to address the associated control deficiencies are
being incorporated into our ongoing work to improve the effectiveness of our
internal controls over financial reporting.
Compared to 2023, orders were up 10 per cent at constant currency in 2024. We
are planning for a gradual improvement in Components order intake but no
meaningful revenue growth in 2025. Profitability is expected to benefit from
our self-help actions.
Notable wins and growth drivers in the period include the following:
Life sciences win
A long-standing customer in the life science sector has selected TT's newest
Mexicali facility for PCBA assembly requirements for an innovative cellular
imaging system. TT already provides manufacturing for this customer at our
locations in Suzhou, Kuantan and Cleveland. The expansion into Mexicali
reflects confidence in TT's ability to support this strategic account
globally, leveraging best-cost-geographies and providing global business
continuity for this important customer. The customer's selection of this
location and entrusting TT is a testament to the partnership and proven
performance of our teams globally. Value of this initial award is around £2
million over five years, with potential for additional growth opportunity.
Semiconductor equipment
Our Cleveland facility was awarded two new programmes from a strategic
customer in the semiconductor equipment manufacturing space. The programmes
over the next six years, will see Cleveland supplying PCBA and power
distribution units.
Naval power systems
Our Kansas team secured nine new contracts with a leading provider of naval
power systems for a variety of engineering services and custom technologies
including large-scale transformers and molded coil assemblies. End
applications include motor controllers, power and energy storage systems for
several naval platforms. These latest awards highlight our success in
developing deep relationships and demonstrating superior technical capability
- enabling us to secure sole source positions on key defence platforms.
Medical technology
Through a focused account development approach, TT Minneapolis was awarded
four new contracts from a leading provider of medical and surgical equipment.
TT will provide custom 5DOF Aircoil Sensor Assemblies for a next-generation
balloon dilation system that will offer a minimally invasive alternative to
traditional endoscopic sinus surgery.
ASIA
2024 2023 Change Change constant fx(1)
Revenue £190.4m £214.8m (11)% (7)%
Revenue ex divestment £186.1m £197.5m (6)% (1)%
Adjusted operating profit(1) £28.5m £23.9m 19% 26%
Adjusted operating profit ex divestment £28.2m £22.2m 27% 34%
Adjusted operating margin(1) 15.0% 11.1% 390bps 400bps
Adjusted operating margin ex divestment 15.2% 11.2% 400bps 410bps
( )
(1 )See note 2 on page 29 for an explanation of alternative performance
measures. Adjusting items are not allocated to divisions for reporting
purposes. For further discussion of these items please refer to note 7 on page
38 of this document.
Revenue reduced by £24.4 million to £190.4 million (2023: £214.8 million)
including a £9.2 million foreign exchange headwind. Organic constant currency
revenue was down 1 per cent excluding the impact of the Project Albert
divestment to £186.1 million (2023: £197.5 million), and 6 per cent higher
also excluding the £5.3 million unwind of pass-through revenue.
Adjusted operating profit increased by £4.6 million to £28.5 million (2023:
£23.9 million) with the benefit of volume growth and efficiencies in part
offset by a £1.3 million foreign exchange headwind and a £1.4 million
reduction from the disposal of the Dongguan site, as part of Project Albert.
The adjusted operating profit margin increased to 15.0 per cent (2023: 11.1
per cent) due to good operational leverage on volume increases, site
efficiencies and the reduction in zero margin pass-through revenues. Excluding
£5.3 million of pass-through revenues and Project Albert, adjusted operating
margin was 15.6 per cent (2023: 12.5 per cent).
We are in the process of increasing further our capacity within our Malaysian
facility in advance of anticipated customer demand growth and transfer of
programmes from other sites. The preparation and transfer work, together with
associated one-off costs, will take place over the course of 2025 with revenue
being delivered from Malaysia from 2026.
Order intake in the year was 6 per cent lower than the prior year, although
this is largely timing related due to the orders relating to the transfer of
activity from Suzhou to Kuantan being delayed in 2025, with revenues for 2025
expected to be up low single digit excluding the pass-through revenue unwind.
There have been a number of key wins during the year including:
Life sciences & diagnostics
TT has been awarded a five-year contract from a global provider of life
sciences and diagnostics equipment. Our Suzhou facility, which has also been
designated as a "preferred supplier", will provide complex PCBA that support
microplate readers used in various laboratory environments.
Railway signalling
Building on a 10+year relationship, TT has secured a new contract with China's
leading rail transit control system integrator. The award will involve
delivering complex, high-level assembly of large-scale cabinets for the signal
control systems that will support Wuhan Metro Line 12 - the longest metro line
in Asia and the second-longest in the world. TT now supports more than eight
metro line projects, with more on the horizon.
Radiotherapy equipment
TT has secured a new contract with one of the world's leading manufacturers of
radiotherapy systems. TT will manufacture large-scale cabinets that support
highly sophisticated linear accelerators, which help deliver radiation quickly
and effectively to patients undergoing cancer treatment. The three year
contract is worth over £2 million.
Our markets
Healthcare (23 per cent of Group revenue)
TT is positioned to address transformative trends in healthcare through
advanced technologies and robust manufacturing capabilities that enable
healthcare innovation for a range of diagnostic, surgical and direct patient
care devices critical to the identification, treatment and prevention of
disease. Growth is driven by a combination of rising chronic disease rates,
shifting demographics with growing patient expectations and the importance of
digitalisation; electronics plays a central role in advancing the progress of
medical technology.
The life sciences and healthcare sector experienced broader market headwinds
in 2024, with major diagnostic and medical device companies adjusting their
inventory levels and capital spending in response to macroeconomic pressures.
This recalibration by key customers temporarily impacted our healthcare
revenue, though we maintained our strategic position with key accounts. Our
differentiated capabilities and strong customer relationships position us well
to benefit from the sector's fundamental growth drivers as market conditions
normalise.
We have increased our exposure to this attractive end market from 13 per cent
of Group revenue in 2015 to 23 per cent in 2024. Our power, connectivity and
sensor technologies span the modern surgical suite from patient monitoring and
therapeutic devices to surgical navigation tools, miniaturised implantable
devices, advanced diagnostics, life sciences equipment and remote health
monitoring. By supporting our life sciences partners, we are improving
laboratory automation systems and enabling samples to be collected and
analysed with minimal human intervention, the benefits of which are improved
data reliability and accuracy, minimised wastage and time-efficient
procedures.
TT is focused on growing in three areas where we are well placed to capitalise
on increasing demand for high-complexity products driven by technological
advancement: robotic surgery, implantable devices and life sciences. We are
supporting the development of smaller, lighter, more precise surgical devices,
enabling reduced size of incisions, thereby shortening recovery times and
improving overall patient outcomes. TT's sensors, electromagnetic components
and power supplies meet the stringent reliability and safety standards
required for life-saving robotic systems, ensuring stable and precise
performance in critical applications.
Aerospace & Defence (27 per cent of Group revenue)
In Aerospace & Defence, we provide solutions for high-reliability
applications across a broad range of mission critical platforms operating on
land, air and sea. Growth is driven by increasing electrification of these
platforms, which supports fuel efficiency and safety and global investments in
national security. The global aerospace industry is experiencing robust growth
with strong demand for new aircraft as airlines address rising passenger
volumes and modernise fleets. Order backlogs remain significant, with
manufacturers ramping up production to meet the need for fuel efficient,
reliable aircraft. Our portfolio of advanced power conversion technologies,
precision components, and contract manufacturing capabilities is critical in
supporting these next-generation aircraft.
Geopolitical uncertainties have driven significant increases in global defence
spending, particularly among NATO countries. The defence electronics
manufacturing market exhibits consistent, moderate expansion as governments
invest to maintain state-of-the-art capabilities. Defence aerospace production
is forecast to grow at 3 per cent CAGR through to 2033, driven by demand for
next-generation fighter jets, hypersonic systems, precision-guided missiles
and smart munitions. TT's products are engineered to meet the stringent
demands of defence applications. Our power solutions deliver reliable
performance in high-stress environments, while our sensors provide precise,
real-time data essential for navigation, targeting and threat detection in
modern defence systems. Additionally, our PCBA and complex manufacturing
services supply custom assemblies critical to mission success.
Across land, air and sea, TT supports platforms including the Tempest fighter
jet, the Boxer land defence vehicle, various maritime systems and many more
classified programmes.
Furthermore, TT is actively investing in R&D, in power management in
particular, to help enable the shift to electrification in the aerospace
industry.
Automation & Electrification (33 per cent of Group revenue)
In Automation & Electrification markets, customers rely on TT to help
solve their toughest automation and electrification challenges by streamlining
their supply chains, driving performance, increasing efficiency and helping
them bring smart, new products to the market.
Market dynamics in the industrial automation sector were mixed in 2024, with
semiconductor capital equipment customers showing resilience despite cyclical
pressures. However, the broader industrial distribution channel experienced
more pronounced softening as distributors and OEM customers worked through
elevated inventory positions accumulated in prior periods. While this
temporary inventory correction impacted our components business, our strategic
position in high-reliability industrial applications and semiconductor
manufacturing remains strong, supported by long-term automation and
electrification trends. Digitalisation is a megatrend in its own right as it
permeates every industry and offers solutions for many of the challenges
faced.
TT's expertise supports the semiconductor market's growth, partnering with
leading semiconductor equipment manufacturers, delivering sensors, resistors,
PCBA, cable harnesses and complex electronic assemblies, enabling
breakthroughs in energy efficiency, AI-driven systems and next-generation
industrial technologies. Our regional facilities and expertise in automation
and complex electronic assembly support shifts to localisation trends
providing supply chain resilience and responsiveness, reducing dependency on
overseas markets while enhancing operational stability.
Given the wide scope of these markets, performance correlates strongly with
global economic growth, with key indicators being GDP growth and the
Purchasing Managers' Index ("PMI"), but the digitisation and proliferation of
electronics and electrification means markets will grow faster than these
indicators. The positive long-term growth drivers in this market give us
confidence that demand will increase for our power, sensing and connectivity
solutions.
Distribution sales channel (17 per cent of Group revenue)
Our revenues through distributors declined in 2024 as this is the route to
market for much of our component products, where demand was weak due to
ongoing de-stocking. This area now represents 17 per cent of our overall
sales. The demand from distributors comes from a very wide range of customers
and end markets but is, in large part, driven by the same megatrends
supporting our focus end markets including rapid technological change and
digital transformation.
FINANCIAL OVERVIEW
Group revenue was £521.1 million (2023: £613.9 million). This included a
currency translation headwind of £16.7 million. Group revenue was 13 per cent
lower than the prior year at constant currency. Adjusting for the impact of
the divestment and excluding zero margin pass-through revenues, revenue was 2
per cent lower on an organic basis.
The Group's adjusted operating profit was £37.1 million (2023 restated:
£47.1 million) and statutory operating loss was £23.5 million (2023
restated: £3.0 million profit) after a charge for items excluded from
adjusted operating profit of £60.6 million (2023: £44.1 million) comprising:
· restructuring credit of £0.1 million (2023: £2.0 million costs);
· pension restructuring costs of £1.3 million (2023: £1.9 million)
relating mainly to work to prepare the UK defined benefit scheme for buy-out;
· acquisition and disposal costs totalled £4.5 million (2023: £3.1
million) relating to the Project Albert divestment, Torotel and Ferranti
integration;
· amortisation of intangible assets arising on business combinations of
£2.7 million (2023: £4.6 million); and
· non-cash asset write-down in the North American region of £52.2
million linked to revised forecasts for the business (2023: £32.5 million
relating to businesses held for sale in our IoT and GMS CGUs) being a £36.7
million non-cash impairment of goodwill for the region and a £15.5 million
asset write-down in relation to one North American components site.
The Group generated an adjusted operating margin of 7.1 per cent (2023
restated: 7.7 per cent) with the decrease as a result of the significant
headwinds faced in our North American components business, severance costs
incurred in response to this and operational issues at Kansas City and
Cleveland in North America.
The reported operating profit for 2023 has been restated by £(5.7) million as
described further in note 2. This is principally related to our Cleveland site
where, as part of our project to address operational execution challenges, we
identified issues in relation to the recoverability of certain assets
recognised in prior periods at this site in North America.
The net finance cost was £9.9 million (2023: £9.8 million) with the impact
of higher base rates and being offset by lower drawn debt levels. The Group's
overall tax charge was £20.0 million (2023 restated: £4.5 million),
including a £12.3 million charge (2023: £3.5 million credit) on items
excluded from adjusted profit. The adjusted tax charge was £7.7 million (2023
restated: £8.0 million), resulting in an effective adjusted tax rate of 28.3
per cent (2023 restated: 21.4 per cent). Loss after tax was £53.4 million
(2023 restated: £11.3 million). Adjusted EPS decreased to 11.0 pence (2023
restated: 16.7 pence), reflecting the reduction in adjusted operating profit
in the period. Basic EPS was a loss of 30.2 pence (2023 restated: 6.4 pence
loss).
Adjusted operating cash inflow after capex was £43.4 million (2023: £48.8
million inflow). The reduction was as a result of lower adjusted operating
profit offset by a significantly reduced outflow on capital expenditure.
Capital and development expenditure of £8.7 million (2023: £24.0 million)
reflected management actions to reduce discretionary spend. There was a total
working capital outflow of £1.2 million (2023 restated: £6.8 million
inflow), including a £12.8 million inflow from inventory reduction. This
resulted in adjusted operating cash conversion of 117 per cent (2023 restated:
104 per cent). On a statutory basis, cash flow from operating activities was
£51.2 million (2023: £62.9 million).
There was a free cash inflow of £27.7 million (2023: inflow £23.9 million),
net of £0.6 million of restructuring and acquisition related costs (2023:
£4.0 million) primarily pension costs of £0.1 million (2023: £0.2 million)
and other costs of £0.5 million (2023: £0.6 million). In 2024 there was a
£11.2 million pension surplus refund from the UK defined benefit scheme after
tax (2023: £3.2 million) and there was a £1.8 million cash outflow on the
buy-out of our smaller US defined benefit scheme which completed in January
2024. Dividend payments totalled £12.2 million (2023: £11.3 million).
At 31 December 2024, the Group's net debt was £97.4 million (31 December
2023: £126.2 million), including £17.3 million of lease liabilities (31
December 2023: £20.8 million). Leverage at 31 December 2024, consistent with
the bank covenants, was 1.8 times (31 December 2023 restated: 1.9 times). As
detailed on page 20 below, the Group's net interest covenant has been
relaxed from 4.0 times to 3.0 times at 30 June 2025 and 3.25 times at 31
December 2025, before reverting to 4.0 times.
OTHER FINANCIAL INFORMATION
Summary of adjusted results
To assist with the understanding of earnings trends, the Group has included
non-GAAP alternative performance measures including adjusted operating profit
and adjusted profit. Further information is contained in the "Reconciliation
of KPIs and non IFRS measures" on pages 45 to 53. A reconciliation of
statutory to adjusted profit numbers is set out on page 20.
A summary of the Group's adjusted results is set out below:
£ million 2024 2023
restated
Revenue 521.1 613.9
Operating profit 37.1 47.1
Operating margin 7.1% 7.7%
Net finance expense (9.9) (9.8)
Profit before tax 27.2 37.3
Tax (7.7) (8.0)
Tax rate 28.3% 21.4%
Profit after tax 19.5 29.3
Weighted average number of shares 176.9 million 175.6 million
EPS 11.0p 16.7p
Cash flow, net debt and leverage
The table below sets out Group cash flows and net debt movement:
£ million 2024 2023
restated
Adjusted operating profit 37.1 47.1
Depreciation and amortisation 13.8 16.5
Net capital expenditure (6.9) (22.4)
Capitalised development expenditure (1.8) (1.6)
Working capital (1.2) 6.8
Other 2.4 2.4
Adjusted operating cash flow after capex. 43.4 48.8
Adjusted operating cash conversion 117% 104%
Net interest and tax (20.3) (19.7)
Lease payments (4.2) (4.4)
Restructuring, acquisition and disposal related costs (0.6) (4.0)
Retirement benefit schemes 9.4 3.2
Free cash flow 27.7 23.9
Dividends (12.2) (11.3)
Lease payments 4.2 4.4
Equity issued/acquired 0.8 1.3
Project Albert divestment costs 12.2 (3.6)
Other (2.1) (1.2)
Decrease in net debt 30.6 13.5
Opening net debt (126.2) (138.4)
New, acquired, modified and surrendered leases (3.0) (3.4)
Leases transferred to liabilities held for sale 2.6 2.6
FX and other (1.4) (1.5)
Closing net debt as per balance sheet (97.4) (127.2)
Cash and leases held within assets and liabilities held for sale - 1.0
Closing net debt including assets and liabilities held for sale (97.4) (126.2)
At 31 December 2024 the Group's net debt was £97.4 million (31 December 2023:
£126.2 million). Included within net debt was £17.3 million of lease
liabilities (31 December 2023: £20.8 million).
Consistent with the Group's borrowing agreements, which exclude the impact of
leases, leverage ratio was 1.8 times at 31 December 2024 (31 December 2023
restated: 1.9 times). Net interest cover was 4.4 times (31 December 2023
restated: 5.7 times).
The Group's debt covenants state that the leverage ratio must not exceed 3.0
times and interest cover must be over 4.0 times. The Group has agreed with its
lenders a temporary amendment to the existing financing facilities for the
periods to 30 June 2025 and 31 December 2025. The amendment relates
specifically to the financial covenant regarding interest cover to provide the
Group with additional headroom. Under the amendment, the interest cover
covenant will be reduced from a minimum ratio of EBITDA to net finance charges
of 4.0 times to 3.0 times and 3.25 times for the periods to 30 June 2025 and
31 December 2025 respectively. During the relaxation period, in the event that
interest cover falls below or is forecast to be less than 4.0 times the Board
would not be able to declare or pay a dividend.
Reconciliation of adjusted results
Details of the reasons for and uses of adjusted measures are included in the
section titled "Reconciliation of KPIs and non IFRS measures" on pages 45 to
53 of this announcement.
£ million 2024 2023 restated
Operating profit/(loss) (23.5) 3.0
Adjusted to exclude:
Restructuring and other items
Restructuring (0.1) 2.0
Pension restructuring costs 1.3 1.9
Asset write-downs
Held for sale write-down - 32.5
Goodwill & fixed asset write-down 52.2 -
Acquisition and disposal related costs
Amortisation of intangible assets arising on business combinations 2.7 4.6
Acquisition & disposal costs 4.5 3.1
Total operating reconciling items 60.6 44.1
Adjusted operating profit 37.1 47.1
(Loss)/profit before tax (33.4) (6.8)
Total operating reconciling items (as above) 60.6 44.1
Adjusted profit before tax 27.2 37.3
Taxation charge on adjusted profit (7.7) (8.0)
Adjusted profit after taxation 19.5 29.3
DIVISIONAL PERFORMANCE
As part of the Capital Market Event on 9 April 2024 we articulated the move to
a function-led, regional reporting structure. This move from our previous
divisional structure will enable us to better leverage our strong engineering
and manufacturing capabilities to improve execution, unlock value and improve
returns.
For purposes of transparency, we committed to provide the supplementary
disclosure covering the previous divisional segment performance - both the
interim 2024 results and for the full-year 2024 results. There will be no
further divisional disclosure beyond this point. The tables below include the
contribution from the assets divested as part of Project Albert.
POWER AND CONNECTIVITY
2024 2023 Change Change constant fx(1)
Revenue £169.5m £169.7m 0% 2%
Adjusted operating profit(1) £20.9m £13.8m 51% 55%
Adjusted operating margin(1) 12.3% 8.1% 420bps 420bps
GLOBAL MANUFACTURING SOLUTIONS
2024 2023 restated Change Change constant fx(1)
Revenue £252.8m £299.2m (16)% (12)%
Adjusted operating profit(1) £24.7m £22.4m 10% 17%
Adjusted operating margin(1) 9.8% 7.5% 230 bps 250 bps
SENSORS AND SPECIALIST COMPONENTS
2024 2023 Change Change constant fx(1)
Revenue £98.8m £145.0m (32)% (30)%
Adjusted operating profit(1) £(0.9)m £19.0m (105)% (105)%
Adjusted operating margin(1) (0.9)% 13.1% (1400) bps (1390) bps
Cautionary statement
This report 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 report. 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.
Consolidated income statement
For the year ended 31 December 2024
£million (unless otherwise stated) Note 2024 2023
Restated (1)
Revenue 3 521.1 613.9
Cost of sales (411.4) (471.6)
Gross profit 109.7 142.3
Distribution costs (22.9) (26.9)
Administrative expenses (110.3) (112.4)
Operating (loss)/profit (23.5) 3.0
Analysed as:
Adjusted operating profit 3 37.1 47.1
Restructuring costs 7 0.1 (2.0)
Pension restructuring costs 7 (1.3) (1.9)
Asset impairments and measurement losses 7 (52.2) (32.5)
Amortisation of intangible assets arising on business combinations 7 (2.7) (4.6)
Acquisition and disposal related costs 7 (4.5) (3.1)
Finance income 6 1.6 1.6
Finance costs 6 (11.5) (11.4)
Loss before taxation (33.4) (6.8)
Taxation 8 (20.0) (4.5)
Loss for the year attributable to the owners of the Company (53.4) (11.3)
EPS attributable to owners of the Company (pence)
Basic 10 (30.2) (6.4)
Diluted 10 (30.2) (6.4)
(1. 2023 results have been restated as described in note 2.)
Consolidated statement of comprehensive income
For the year ended 31 December 2024
£million 2024 2023
Restated (1)
Loss for the year (53.4) (11.3)
Other comprehensive income/(loss) for the year after tax
Items that are or may be reclassified subsequently to the income statement:
Exchange differences on translation of foreign operations 2.9 (17.3)
Tax on exchange differences (0.4) 1.1
Foreign exchange gain on disposals recycled to income statement (0.6) -
(Loss)/gain on hedge of net investment in foreign operations (0.8) 1.8
(Loss)/gain on cash flow hedges taken to equity less amounts recycled to the (10.2) 3.5
income statement
Deferred tax gain/(loss) on movement in cash flow hedges 2.4 (0.7)
Items that will not be reclassified to the income statement:
Remeasurement of defined benefit pension schemes (2.3) 0.2
Tax on remeasurement of defined benefit pension schemes 3.1 (0.1)
Total comprehensive loss for the year attributable to the owners of the (59.3) (22.8)
Company
(1. 'Loss for the year' has been restated as described in note 2.)
Consolidated statement of financial position
For the year ended 31 December 2024
£million Note 2024 2023 2022
Restated (1)
Restated (1)
ASSETS
Non-current assets
Right-of-use assets 9.9 15.8 19.6
Property, plant and equipment 49.3 61.3 54.8
Goodwill 5 105.4 140.8 155.1
Other intangible assets 30.8 32.7 53.7
Deferred tax assets 8 13.1 16.6 13.2
Derivative financial instruments - 0.8 0.8
Pensions 12 7.1 25.3 31.3
Total non-current assets 215.6 293.3 328.5
Current assets
Inventories 132.7 142.7 189.2
Trade and other receivables 91.2 84.8 119.8
Income taxes receivable 2.9 2.0 1.1
Derivative financial instruments 0.7 5.2 3.1
Assets classified as held for sale - 48.0 -
Cash and cash equivalents 69.2 74.1 65.0
Total current assets 296.7 356.8 378.2
Total assets 512.3 650.1 706.7
LIABILITIES
Current liabilities
Borrowings 11 0.1 1.2 3.7
Liabilities directly associated with assets classified as held for sale - 28.1 -
Lease liabilities 4.0 3.8 4.4
Derivative financial instruments 5.4 1.5 3.6
Trade and other payables 120.0 127.9 173.2
Income taxes payable 13.1 10.9 9.6
Provisions 3.7 3.1 3.5
Total current liabilities 146.3 176.5 198.0
Non-current liabilities
Borrowings 11 149.2 181.9 176.6
Lease liabilities 13.3 14.4 18.7
Derivative financial instruments 2.4 0.6 0.8
Deferred tax liability 8 3.5 7.0 12.4
Pensions 12 1.5 3.1 2.9
Provisions and other non-current liabilities 1.2 1.1 0.8
Total non-current liabilities 171.1 208.1 212.2
Total liabilities 317.4 384.6 410.2
Net assets 194.9 265.5 296.5
EQUITY
Share capital 13 44.5 44.3 44.1
Share premium 13 24.6 24.0 22.9
Translation reserve 41.8 40.7 55.1
Other reserves 4.0 11.9 7.9
Retained earnings 80.0 144.6 167.1
Total equity 194.9 265.5 296.5
(1. 'Inventories', 'Trade and other receivables' and 'deferred tax assets'
have been restated as described in note 2.)
Approved by the Board of Directors on 9 April 2025 and signed on their behalf
by
Peter France
Mark Hoad
Director
Director
Consolidated statement of changes in equity
For the year ended 31 December 2024
( )
£million Share capital Share premium Translation Reserve Other reserves Retained earnings Total
At 31 December 2022 - restated (1) 44.1 22.9 55.1 7.3 167.1 296.5
Loss for the year - restated (1) - - - - (11.3) (11.3)
Other comprehensive income
Exchange differences on translation of foreign operations - - (17.3) - - (17.3)
Tax on exchange differences - - 1.1 - - 1.1
Gain on hedge of net investment in foreign operations - - 1.8 - - 1.8
Profit on cash flow hedges taken to equity less amounts recycled to the - - - 3.5 - 3.5
income statement
Deferred tax on movement in cash flow hedges - - - (0.7) - (0.7)
Remeasurement of defined benefit pension schemes - - - - 0.2 0.2
Tax on remeasurement of defined benefit pension schemes - - - - (0.1) (0.1)
Total comprehensive (loss)/income - - (14.4) 2.8 (11.2) (22.8)
Transactions with owners recorded directly in equity
Equity dividends paid by the Company - - - - (11.3) (11.3)
Share-based payments - - - 3.1 - 3.1
Deferred tax on share-based payments - - - (0.1) - (0.1)
New shares issued 0.2 1.1 - - - 1.3
Other movements - - - (1.2) - (1.2)
At 31 December 2023 - restated (1) 44.3 24.0 40.7 11.9 144.6 265.5
At 31 December 2023 - restated (1) 44.3 24.0 40.7 11.9 144.6 265.5
Loss for the year - - - - (53.4) (53.4)
Other comprehensive income/(expense)
Exchange differences on translation of foreign operations - - 2.9 - - 2.9
Tax on exchange differences - - (0.4) - - (0.4)
Foreign exchange gain on disposals recycled to income statement - - (0.6) - - (0.6)
Loss on hedge of net investment in foreign operations - - (0.8) - - (0.8)
Loss on cash flow hedges taken to equity less amounts recycled to income - - - (10.2) - (10.2)
statement
Deferred tax on movement in cash flow hedges - - - 2.4 - 2.4
Remeasurement of defined benefit pension schemes - - - - (2.3) (2.3)
Tax on remeasurement of defined benefit pension schemes - - - - 3.1 3.1
Total comprehensive income/(loss) - - 1.1 (7.8) (52.6) (59.3)
Transactions with owners recorded directly in equity
Dividends paid by the Company - - - - (12.2) (12.2)
Share-based payments - - - 2.2 - 2.2
Deferred tax on share-based payments - - - (0.2) - (0.2)
New shares issued 0.2 0.6 - - - 0.8
Payments to fund employee benefit trust - - - (2.1) - (2.1)
Other movements - - - - 0.2 0.2
At 31 December 2024 44.5 24.6 41.8 4.0 80.0 194.9
(1. Balances have been restated as described in note 2.)
Consolidated statement of cash flows
For the year ended 31 December 2024
£million Note 2024 2023
Restated (1)
Cash flows from operating activities
Loss for the year (53.4) (11.3)
Taxation 8 20.0 4.5
Net finance costs 6 9.9 9.8
Restructuring costs and non underlying asset impairments and remeasurements 7 53.4 36.4
Amortisation, acquisition and disposal related costs 7 7.2 7.7
Adjusted operating profit 37.1 47.1
Adjustments for:
Depreciation 12.2 14.0
Amortisation of intangible assets 1.6 2.5
Share based payment expense 2.2 3.1
Scheme funded pension administration costs 1.1 1.6
Other items 0.2 (0.7)
Decrease in inventories 12.8 5.3
(Increase)/decrease in receivables (2.2) 15.4
Decrease in payables and provisions (12.9) (15.5)
Adjusted operating cash flow 52.1 72.8
Reimbursement from pension schemes net of funding payments 9.4 3.2
Restructuring and acquisition related costs (0.6) (4.0)
Net cash generated from operations 60.9 72.0
Income taxes paid (9.7) (9.1)
Net cash flow from operating activities 51.2 62.9
Cash flows from investing activities
Purchase of property, plant and equipment (6.9) (22.3)
Proceeds from sale of property, plant and equipment and government grants 0.5 0.5
received
Capitalised development expenditure (1.8) (1.6)
Purchase of other intangibles (0.5) (0.6)
Proceeds from disposal of business 4 17.5 -
Cash with disposed businesses 4 (5.3) -
Net cash flow from/(used) in investing activities 3.5 (24.0)
Cash flows from financing activities
Issue of share capital 13 0.8 1.3
Interest paid (10.6) (10.6)
Repayment of borrowings (49.2) (26.1)
Proceeds from borrowings 15.1 32.7
Capital payment of lease liabilities (4.2) (4.4)
Payments to fund employee benefit trust (2.1) (1.2)
Dividends paid by the Company (12.2) (11.3)
Net cash flow used in financing activities (62.4) (19.6)
Cash transferred to held for sale - (3.6)
Net (decrease)/increase in cash and cash equivalents (7.7) 15.7
Cash and cash equivalents at beginning of year including those classified as 76.5 61.3
held for sale
Exchange differences 0.3 (4.1)
Cash and cash equivalents at end of year 69.1 72.9
Cash and cash equivalents comprise:
Cash at bank and in hand 69.2 74.1
Bank overdrafts (0.1) (1.2)
Cash and cash equivalents at end of year 69.1 72.9
Cash and cash equivalents included within assets classified as held for sale - 3.6
Cash and cash equivalents at end of year including those classified as held 69.1 76.5
for sale
(1.'Loss for the year', 'Taxation', 'Adjusted operating profit', 'Decrease
in inventories', and '(Increase)/decrease in receivables' have been restated
as described in note 2.)
TT Electronics Plc
Results for the year ended 31 December 2024
1 General information
The information set out below, which does not constitute full financial
statements, is extracted from the audited financial
statements
· was approved by the Directors on 9 April 2025;
· have been reported on by the Group's auditor; their reports were
unqualified and did not contain statements under s498(2) or (3) of the
Companies Act 2006. The auditor did draw attention to the material uncertainty
related to going concern as set out on page 28;
· will be available to the shareholders and the public in April
2025; and
· will be filed with the Registrar of Companies following the
Annual General Meeting.
While the financial information included in this preliminary announcement has
been prepared in accordance with the recognition
and measurement criteria of UK adopted International Financial Reporting
Standards ("IFRSs") adopted pursuant to IFRSs as issued by the
IASB, this announcement does not itself contain sufficient information to
comply with IFRSs. The Company expects to publish full
financial statements that comply with IFRSs during April 2024.
2 Basis of preparation
Going concern
2024 has been a challenging year for the Group. Business performance has
been mixed and adjusted EBITDA and interest cover reduced. In particular
performance has been impacted by difficult component market conditions and
operational challenges in our business in North America. These challenging
conditions have continued into 2025, as anticipated.
As a result of the above the Group sought agreement from its lenders to an
interest covenant relaxation which covers the covenant test dates at December
2024, June 2025 and December 2025.
From 30 June 2026 onwards, the Group's covenants will revert to original
contractual levels and, as a result of this, the Directors have extended their
going concern review period to 30 June 2026
During this extended going concern period, it is the potential impact of a
possible covenant breach in the future which we consider to be the largest
risk to going concern as any such breach would contractually allow the lenders
to trigger default clauses and to request immediate repayment of all related
facilities.
Financing
The Group's primary sources of £265.5 million in total borrowing facilities
comprise:
· A £162.4 million committed revolving credit facility ("RCF"),
signed in June 2022 and maturing in June 2027. The RCF operates on a floating
rate basis tied to GBP SONIA, USD SOFR, or EURIBOR, depending on the loan
currency. As at 31 December 2024, £75.9 million of the available £162.4
million RCF facility had been drawn down, as at 31 March 2025 the RCF drawn
amount was £65.8 million;
· A £75 million fixed-rate loan issued in December 2021 to three
institutional investors, evenly split between 7- and 10-year maturities, with
an average interest rate of 3.65 per cent and the same covenants as our bank
facility; and
· £28.1 million in uncommitted facilities (being overdraft lines
and an accordion facility of £17.6 million)
There are no required repayments of principal amounts on any financing prior
to the RCF maturity in 2027. Whilst drawdowns on existing facilities are
required within the going concern review period, none of the Company's
forecast models show any requirement for any additional financing beyond the
existing committed facilities.
Financial Covenants and Agreement to Relaxation by Lenders
The Group's key financing facilities, the RCF and the fixed rate loans have
the same financial covenant metrics relating to debt and interest cover which
measures EBITDA against net debt and net interest. The loan agreements set
these at a maximum debt cover of three times and a minimum interest cover of
four times. All covenants are measured on a last twelve months basis ("LtM")
As of 31 December 2024, the calculated ratios for the financial covenants as
defined in the loan agreements were as follows:
· Leverage ratio of 1.8 times; and
· Interest cover of 4.4 times
TT Electronics Plc
Results for the year ended 31 December 2024
2 Basis of preparation continued
In December 2024, the Group agreed with its lenders, a relaxation of the
interest cover covenant for 3 testing periods, as set out below:
Interest cover maximum 31 December 24 30 June 2025 31 December 2025 30 June 2026
Contractual 4.0x 4.0x 4.0x 4.0x
Agreed relaxation 3.75 3.0x 3.25x n/a
In return for the relaxation, the Group has agreed that during the covenant
relaxation period, in the event that interest cover falls, or is forecast in
the next two testing periods to fall, below 4.0 times, then a dividend will
not be paid until interest cover returns to above 4.0 times.
Forecasts and covenant compliance
The Group has prepared and reviewed detailed cash flow forecasts for the
period through until 30 June 2026. These forecasts take into account the
Group's financial position and potential impacts of principal risks on
different divisions.
Key assumptions in the Group's financial projections for this period include
revenue growth, operating profit growth and working capital projections. The
Board considers the Company's Base Case scenario to be an appropriate base
case for the going concern assessment. Under this base case scenario, the
Group retains sufficient liquidity and covenant headroom throughout the
forecast period, with interest cover not expected to fall below 4.0 times and
debt cover expected to remain well within covenant limits.
The Group's financial projections have been stress-tested against "business as
usual" risks (such as profit fluctuations, supply chain pressures, and working
capital variances) as well as principal risks, including general revenue
reduction, contractual obligations, workforce turnover, tariff impacts and
health and safety. These risks were analysed both individually and
collectively, assuming that all adversely impact EBITDA in all periods.
The Board notes that there are a number of inherent uncertainties within the
Group's going concern forecasts, accordingly the Group extended these tests to
take into account currently elevated geopolitical risks, operational issues
experienced at two North America sites in 2024 and uncertainties about the
timing of the return of demand in the Group's components market. In order to
appropriately consider these risks and other principal risks in the business,
the Company forecasts a severe downside scenario.
This severe downside scenario reduces EBITDA by £11.7 million, £23.9 million
and £29.3 million for the 12 months to 30 June 2025, year ended 31 December
2025 and 12 months to 30 June 2026, respectively. At these levels of EBITDA,
the modelling shows that the Group would need to implement some mitigating
actions in order to meet the financial covenants. These mitigations could
include but are not limited to reducing incentive payments, wage and salary
savings, reduced dividends, capital expenditure and additional working capital
measures. In this severe downside scenario, to remain compliant with
covenants, the Group would need to implement mitigating actions with a EBITDA
impact of circa £5 million or cash flow impact of circa £16 million, which
the Board believes would be readily achievable from the range of mitigating
actions available to the Group. After the impact of these mitigations, the
modelling shows that severe downside scenario passing the financial covenants.
Impact of elevated macroeconomic and tariff uncertainty
Whilst the Group's severe downside scenario sought to take account of certain
tariff and elevated geopolitical risks and the resultant impact on revenues,
there have been significant emerging geopolitical and macroeconomic
developments in these areas. These events are recent, fast moving, and the
prospect of global recession and stress in the debt market has significantly
increased.
There are a wide range of potential outcomes from the proposed US tariff
regime, but any global macroeconomic downturn or recession has the potential
to have an impact beyond that assumed in the severe downside case. As such,
current global economic volatility may have an associated impact on the
Company's ability to generate the EBITDA required to meet the Company's
financial covenants over the going concern period.
As a result, the directors consider these matters represent a material
uncertainty which may cast significant doubt upon the Group's ability and the
Company's ability to continue as a going concern for a period up to 30 June
2026.
TT Electronics Plc
Results for the year ended 31 December 2024
2 Basis of preparation continued
Critical accounting judgements and key sources of estimation uncertainty
In the application of the Group's accounting policies the Directors are
required to make judgements, estimates and assumptions about the carrying
amounts of assets and liabilities that are not readily apparent from other
sources.
The estimates and associated assumptions are based on historical experiences
and other factors that are considered to be relevant. Actual results may
differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis.
Revisions to accounting estimates are recognised in the period in which the
estimate is revised if the revision affects only that period, or in the period
of revision and future periods if the revision affects both current and future
periods.
The Directors have assessed that there is currently no material impact arising
from climate change on the judgements and estimates determining the valuations
within the financial statements. In particular, the Group considered the
impact of climate change in respect of going concern and viability of the
Group over the next three years, forecast cash flows for the purposes of
impairment assessments of non-current assets and the useful lives of certain
assets. Whilst there is currently little short to medium-term impact expected
from climate change, the Directors are aware of the changing nature of risks
associated with climate change and will regularly assess these risks against
judgements and estimates made in preparation of the Group's Consolidated
Financial Statements.
Critical judgements
In the course of preparing the Financial Statements, critical judgements
within the scope of paragraph 122 of IAS 1: "Presentation of Financial
Statements" were made during the process of applying the Group's accounting
policies. These are outlined below.
Adjusting items
Judgements were required as to whether items were disclosed as adjusting, with
consideration given to both quantitative and qualitative factors. Further
information about the determination of adjusting items in the year ended 31
December 2024 is included on page 30. Critical judgements involving estimates
that have had a significant effect on the amounts recognised in the financial
statements are set out below.
Key sources of estimation uncertainty
Assumptions concerning the future and other key sources of estimation
uncertainty at the balance sheet date, that may have a significant risk of
causing a material adjustment to the carrying amounts of assets and
liabilities within the next financial year, are discussed below.
• Note 8 - Taxation accruals. Accruals for tax contingencies
require management to make judgements and estimates in relation to tax
authority audits and exposures. Amounts accrued are based on management's
interpretation of country-specific tax law and the likelihood of settlement.
Tax benefits are not recognised unless the tax positions are probable of being
sustained. Once considered to be probable, management reviews each material
tax benefit to assess whether a provision should be taken against full
recognition of the benefit on the basis of potential settlement through
negotiation and/or litigation. These amounts are expected to be utilised or to
reverse as tax audits occur or as the statute of limitations is reached in the
respective countries concerned. The Group's current tax liability at 31
December 2024 includes tax provisions of £10.4 million (2023: £9.3 million).
The Group believes the range of reasonable possible outcomes in respect of
these exposures is tax liabilities of up to £13.9 million (2023: £12.3
million).
• Note 8 - Deferred tax assets. The Group completed a five year
forward looking strategic plan covering the periods from 2025 to 2029. Under
IAS 12 a deferred tax asset can only be recognised if it is considered
probable that the business will achieve a net taxable profit in the near to
utilise the deferred tax asset. Management determined that the strategic plan
did not support full recovery of all deferred tax assets within the US, in the
North America segment.
As a result, the Group derecognised deferred tax assets of £16.0 million
leaving deferred tax assets of £9.2 million which offset against the North
American deferred tax liabilities. The charge was recognised in items excluded
from adjusted profit (note 7). Should recovery of these US deferred tax assets
become probable this would cause the Group to recognise up to an additional
£16.0 million of deferred tax assets and a credit would be recognised in
items excluded from adjusted profit.
• Note 5 - Assumptions used to determine the carrying value of
goodwill in relation to the North America group of cash generating units
("CGUs"). The carrying amount of goodwill in relation to the North America
group of CGUs at 31 December 2024 was £40.4 million after impairment (there
is no comparative for 2023 as the Group's CGUs have changed in 2024 because
the group has moved from divisions to a functional matrix structure across
three regions as explained in note 5). Determining whether goodwill is
impaired requires an estimation of the value in use of the CGUs to which the
goodwill has been allocated. The value in use calculation requires management
to estimate the future cash flows expected to arise from CGUs and a suitable
discount rate to calculate present value. During the year a full impairment
review was performed and an impairment of £36.7 million was recognised
against goodwill held in the North America group of CGUs which was recognised
within the North America segment in items excluded from adjusted operating
profit. Should the business experience unforeseen deterioration of results a
future impairment may be required. Further information is provided in note 7
and sensitivity analysis is provided in note 5.
TT Electronics Plc
Results for the year ended 31 December 2024
2 Basis of preparation continued
Alternative performance measures
The Group presents Alternative Performance Measures ("APMs") in addition to
the statutory results of the Group. These are presented in accordance with the
guidelines on APMs issued by the European Securities and Markets Authority
("ESMA").
Adjusted operating profit has been defined as operating profit from continuing
operations excluding the impacts of significant restructuring programmes,
significant one-off items including property disposals, impairment charges
significant in nature and/or value, business acquisition, integration, and
divestment related activity, and the amortisation of intangible assets
recognised on acquisition. Acquisition and disposal related items include the
writing off of the pre-acquisition profit element of inventory written up on
acquisition, other direct costs associated with business combinations and
adjustments to contingent consideration related to acquired businesses.
Restructuring includes significant changes in footprint (including movement of
production facilities) and significant costs of management changes.
In addition to the items above, adjusting items impacting profit after tax
include:
• The net effect on tax of significant restructuring from strategy changes
that are not considered by the Group to be part of the normal operating costs
of the business; and
• The tax effects of adjustments to profit before tax.
These financial statements include alternative performance measures that are
not prepared in accordance with IFRS. These APMs have been selected by the
Directors to assist them in making operating decisions because they represent
the underlying operating performance of the Group and facilitate internal
comparisons of performance over time.
The Directors consider the adjusted results to be an important measure used to
monitor how the businesses are performing as this provides a meaningful
reflection of how the businesses are managed and measured on a day-to-day
basis and achieves consistency and comparability between reporting periods.
Prior year restatements
During a project to address the Cleveland operational execution challenges the
Group identified certain balances held within the trade and other receivables
and inventory financial statement line items in respect to the site that could
not be substantiated. As a result, the Group commenced an internal
investigation over the root cause of these matters, and concluded that they
represented material errors as at 31 December 2023 which required prior period
restatement. This was confirmed through the year end process and in
consultation with our external auditors.
Primarily, these errors related to incorrect judgements associated with
complex contracts, certain finance team members being inappropriately skilled,
reconciliations not being appropriately performed or reviewed, compounded by
staff turnover issues as well as insufficient challenge and review from the
divisional finance team. As a result, we are strengthening the local finance
team and the control findings and recommendations are being incorporated into
our on-going work to improve the effectiveness of our internal controls over
financial reporting.
In addition, a further matter of concern was identified in relation to North
America. Further investigation was undertaken, under the oversight of the
Audit Committee Chair, using resource from Group internal audit and an
external forensic specialist. This review confirmed an accounting irregularity
in relation to the inappropriate recording of certain costs as a prepaid
asset, which whilst not quantitatively material, has also been restated in the
31 December 2023 balance sheet. The Committee noted inappropriate direction
from senior finance employees related to this matter.
In respect of all matters above it was determined the recoverability of £0.5
million of receivables in 2022, £0.8 million of inventories in 2023 and £4.4
million of receivables in 2023 was lower than their presented carrying value.
The directors considered these adjustments to be material and so the prior
years have been restated.
In accordance with IAS 8: 'Accounting Policies, Changes in Accounting Policies
and Errors' amounts in the consolidated income statement; consolidated
statement of comprehensive income; consolidated statement of financial
position; consolidated statement of changes in equity and consolidated
statement of cash flows for the year ending 31 December 2023 have been
restated.
The impact of this change is shown in the tables below
TT Electronics Plc
Results for the year ended 31 December 2024
2 Basis of preparation continued
2022 £million As published Restatement of receivables As Restated
Consolidated statement of changes in equity
Retained earnings 167.6 (0.5) 167.1
Total equity 297.0 (0.5) 296.5
2022 £million As published Restatement of receivables As Restated
Consolidated statement of financial position
Trade and other receivables 120.3 (0.5) 119.8
Retained earnings 167.6 (0.5) 167.1
Total equity 297.0 (0.5) 296.5
2023 £million As published Restatement of prepayments Restatement of receivables Restatement of inventory As Restated
Consolidated statement of financial position
Inventories 143.5 - - (0.8) 142.7
Trade and other receivables 90.2 (1.0) (4.4) - 84.8
Deferred tax assets 15.4 0.2 0.8 0.2 16.6
Retained earnings 149.6 (0.8) (3.6) (0.6) 144.6
Total equity 270.5 (0.8) (3.6) (0.6) 265.5
2023 £million As published Restatement of prepayments Restatement of receivables Restatement of inventory As Restated
Consolidated income statement
Cost of sales (466.9) - (3.9) (0.8) (471.6)
Gross profit 147.0 - (3.9) (0.8) 142.3
Administrative expenses (111.4) (1.0) - - (112.4)
Operating profit 8.7 (1.0) (3.9) (0.8) 3.0
Adjusted operating profit 52.8 (1.0) (3.9) (0.8) 47.1
Loss before taxation (1.1) (1.0) (3.9) (0.8) (6.8)
Taxation (5.7) 0.2 0.8 0.2 (4.5)
Loss for the year (6.8) (0.8) (3.1) (0.6) (11.3)
2023 £million As published Restatement of prepayments Restatement of receivables Restatement of inventory As Restated
Earnings per share (p)
Basic - adjusted 19.2 (0.4) (1.7) (0.4) 16.7
Diluted - adjusted 19.0 (0.4) (1.7) (0.5) 16.4
Basic (3.9) (0.4) (1.7) (0.4) (6.4)
Diluted (3.9) (0.4) (1.7) (0.4) (6.4)
2023 £million As published Restatement of prepayments Restatement of receivables Restatement of inventory As Restated
Consolidated statement of cashflows
Loss for the year (6.8) (0.8) (3.1) (0.6) (11.3)
Taxation 5.7 (0.2) (0.8) (0.2) 4.5
Adjusted operating profit 52.8 (1.0) (3.9) (0.8) 47.1
Decrease in inventories 4.5 - - 0.8 5.3
(Increase)/decrease in receivables 10.5 1.0 3.9 - 15.4
Adjusted operating cash flow 72.8 - - - 72.8
Net cash generated from operations 72.0 - - - 72.0
Net cash flow from operating activities 62.9 - - - 62.9
Net (decrease)/increase in cash and cash equivalents 15.7 - - - 15.7
TT Electronics Plc
Results for the year ended 31 December 2024
3 Segmental reporting
In 2023 the Group was organised into three divisions which corresponded to the
products and services provided. Following the organisational change put in
place from 1 March 2024, which was announced internally in January 2024 and
externally at the Capital Markets Event in April 2024, the group has now moved
from divisions to a functional matrix structure across three regions.
Segmental reporting in note 3a presents performance of both the new and old
segments for 2023.
The Group is organised into three regions, as shown below. Each of these
regions represents an operating segment in accordance with IFRS 8 'Operating
segments' and there is no aggregation of segments. The chief operating
decision maker is the Chief Executive Officer. The operating segments are:
· Europe - the Europe segment encompasses all the Group's European
operations comprising the manufacturing sites in Sheffield, Bedlington,
Manchester, Barnstaple, Nottingham, Abercynon, Fairford and Eastleigh as well
as the European sales offices. The regional segment is supported by a
leadership team who have functional responsibilities that span the individual
entities within the business;
· North America - the North America segment encompasses all the
Group's North American operations comprising Juarez, Mexicali, Dallas,
Minneapolis, Kansas, Denver, Cleveland and Boston. The regional segment is
supported by a leadership team who have functional responsibilities that span
the individual entities within the business;
· Asia - the Asia segment encompasses all the Group's Asian
operations comprising the manufacturing sites in Suzhou and Kuantan and the
Singapore sales office. The regional segment is supported by a leadership team
who have functional responsibilities that span the individual entities within
the business.
The key performance measure of the operating segments is adjusted operating
profit. Refer to the section titled 'Reconciliation of KPIs and non IFRS
Measures' for a definition of adjusted operating profit.
Corporate costs - Resources and costs of the head office managed centrally but
deployed in support of the operating units are allocated to segments based on
a combination of revenue and adjusted operating profit.
Resources and costs of the head office which are not related to the operating
activities of the trading units are not allocated to regions and are
separately disclosed, equivalent to the segment disclosure information, so
that reporting is consistent with the format that is used for review by the
chief operating decision maker. This gives greater transparency of the
adjusted operating profits for each segment. Adjusting items are not allocated
to segments for reporting purposes. For further discussion of these items see
note 7.
The accounting policies of the reportable segments are the same as the Group's
accounting policies.
Group financing (including finance costs and finance income) and income taxes
are managed on a Group basis and are not allocated to operating segments.
Goodwill is allocated to the segments which comprise groups of cash generating
units as this is the level at which goodwill is monitored.
a) Income statement information
2024
£million Europe North America Asia Total Operating Segments Central Total
Sales to external customers 146.3 184.4 190.4 521.1 - 521.1
Adjusted operating profit 18.9 (2.7) 28.5 44.7 (7.6) 37.1
Add back: adjustments made to operating profit (note 7) (60.6)
Operating profit (23.5)
Net finance costs (9.9)
Profit before taxation (33.4)
TT Electronics Plc
Results for the year ended 31 December 2024
3 Segmental reporting continued
2023 (Restated 1)
£million Europe North America Asia Total Operating Segments Central Total
Sales to external customers 169.6 229.5 214.8 613.9 - 613.9
Adjusted operating profit 11.9 19.4 23.9 55.2 (8.1) 47.1
Add back: adjustments made to operating profit (note 7) (44.1)
Operating profit 3.0
Net finance costs (9.8)
Loss before taxation (6.8)
(1. 'Adjusted operating profit' has been restated as described in note 2. This
was in the North America segment.)
2023 (Restated) (1)
£million Power and Connectivity Global Sensors and Total Operating Segments Central Total
Manufacturing
Specialist
Solutions
Components
Sales to external customers 169.7 299.2 145.0 613.9 - 613.9
Adjusted operating profit 13.8 22.4 19.0 55.2 (8.1) 47.1
Add back: adjustments made to operating profit (note 7) (44.1)
Operating profit 3.0
Net finance costs (9.8)
Loss before taxation (6.8)
(1. 'Adjusted operating profit' has been restated as described in note 2. This
was in the Global Manufacturing Solutions and Power and Connectivity
segments.)
b) Geographic information
Revenue by destination
The Group operates on a global basis. Revenue from external customers by
geographical destination is shown below. Management monitors and reviews
revenue by region rather than by individual country given the significant
number of countries where customers are based.
£million 2024 2023
United Kingdom 111.8 144.7
Rest of Europe 71.6 95.7
North America 214.6 225.1
Asia 122.6 145.5
Rest of the World 0.5 2.9
521.1 613.9
Revenue from services is less than 1% of Group revenues. All other revenue is
from the sale of goods.
C) Market information key customers
The Group operates in the following markets:
£million 2024 2023
Healthcare 118.1 146.3
Aerospace and defence 142.1 123.5
Automation and electrification 174.3 221.4
Distribution 86.6 122.7
521.1 613.9
The Group had no customers who contributed greater than 10% of revenues in
2024 or 2023.
TT Electronics Plc
Results for the year ended 31 December 2024
4 Disposals
On 31 March 2024 the Group sold three business units within the Europe and
Asia segments to the Cicor Group for a cash consideration of £20.2 million
comprising £22.2 million received in March 2024 less a consideration
adjustment of £2.0 million paid in July 2024. The divestment relates to
business units in Hartlepool and Cardiff, UK and Dongguan, China which provide
electronics manufacturing services and certain connectivity products,
principally to industrial clients. The disposed business units contributed
£16.1 million of revenue and £0.2 million of operating loss during 2024.
The assets and liabilities disposed are presented below.
£million 31 March 2024
Property, plant and equipment 0.3
Other intangible assets 0.2
Inventories 28.0
Cash and cash equivalents 5.3
Trade and other receivables 11.4
Assets within disposal group 45.2
Liabilities
Lease liabilities 2.6
Derivative financial instruments 0.4
Trade and other payables 18.7
Provisions 0.4
Deferred tax liability 1.0
Liabilities within disposal group 23.1
Net assets disposed 22.1
£million
Net proceeds per the statement of cashflows 17.5
Cash with disposed businesses (5.3)
Impact on net debt (see note 11) 12.2
£million
Cash consideration received 22.2
Disposal costs paid (2.7)
Net proceeds per the statement of cashflows at H1 2024 19.5
Working capital adjustment paid in H2 2024 (2.0)
Net proceeds per the statement of cashflows 17.5
Net assets disposed (22.1)
Disposal costs accrual (0.4)
Cumulative translation difference recycled on disposal 0.6
Loss on disposal (4.4)
The loss on disposal of £4.4 million has been reported within items excluded
from adjusted operating profit which is disclosed in note 7.
TT Electronics Plc
Results for the year ended 31 December 2024
5 Goodwill
£million
Cost
At 1 January 2023 172.8
Transferred to held for sale (26.3)
Net exchange adjustment (5.7)
At 31 December 2023 140.8
Net exchange adjustment 1.3
At 31 December 2024 142.1
Impairment
At 1 January 2023 17.7
Transferred to held for sale (17.7)
At 31 December 2023 -
Impairment 36.7
At 31 December 2024 36.7
Net book value
At 31 December 2024 105.4
At 31 December 2023 140.8
Goodwill arising from acquisitions represents the premium paid above the fair
value of net assets, including identified intangible assets, at the time of
acquisition. Future enhancements to acquired businesses-driven by strategic
direction, operational efficiencies, and investment-are expected to improve
profitability over the ownership period.
In 2023, the Group operated through three divisions aligned with its product
and service offerings. However, following an organisational restructuring
effective 1 March 2024-internally announced in January 2024 and externally at
the Capital Markets Event in April 2024-the Group transitioned to a functional
matrix structure spanning three regions. See note 3 for more details.
Following this Group restructure goodwill was re-allocated to the new groups
of CGUs shown in the table below. At this point goodwill was re-assessed and
no indicators of impairment were found.
Goodwill is allocated to groups of CGUs and monitored at this level. Each
group of CGUs comprises multiple CGUs which are primarily individual
manufacturing sites.
In the year ended 31 December 2023 £8.6 million of goodwill (net of £17.7
million impairment) was transferred to assets held for sale. The amount
transferred comprised £6.4 million (net of £17.7 million impairment)
relating to the IoT Solutions CGU and £2.2 million related to the Global
Manufacturing Solutions group of CGUs. These two CGUs ceased to exist after
the re-allocation of goodwill to new groups of CGUs following the Group's new
regional structure (see above).
Goodwill, excluding amounts transferred to assets held for sale, is attributed
to the following groups of CGUs below:
£million 2024 2023
Europe:
Europe 52.7 -
North America:
North America 40.4 -
Asia:
Asia 12.3 -
Power and Connectivity:
Power Solutions - 63.7
IoT Solutions - 3.5
Global Manufacturing Solutions:
Global Manufacturing Solutions - 16.7
Sensors and Specialist Components:
Resistors - 32.3
Sensors - 24.6
Total 105.4 140.8
TT Electronics Plc
Results for the year ended 31 December 2024
5 Goodwill continued
Impairment Testing
The Group tests goodwill impairment annually or more frequently if there are
indications that goodwill might be impaired.
Recoverable amounts for CGUs are calculated using a value-in-use approach. Key
assumptions include discount rates, growth projections, and operating cash
flow forecasts. Growth rates beyond the forecast period align with long-term
GDP projections, capped at long-term inflation rates for the primary CGU
market. These rates are determined based on the Group's geographic footprint
and market presence
Discount rates are estimated using pre-tax rates that reflect market
conditions and CGU-specific risks. In determining the cost of equity, the
Capital Asset Pricing Model has been used. Accordingly the cost of equity is
determined by adding a risk premium, based on an industry adjustment, to the
expected return of the equity market above the risk-free return. The relative
risk adjustment reflects the risk inherent in each group of CGUs relative to
all other sectors and geographies on average.
The cost of debt is determined using a risk-free rate based on the cost of
government bonds, and an interest rate premium equivalent to a corporate bond
with a similar credit rating to TT Electronics Plc.
Long-term growth assumptions reflect anticipated demand trends in line with
economic conditions. Price evolution and cost-control measures are expected to
drive sustained profitability improvements. Management has detailed plans in
place reflecting the latest budget and strategic growth plan. The pre-tax
discount rates and periods of management approved forecasts are shown below.
The discount rates used in the annual impairment test as at 30 September 2024
(Europe and Asia) and 31 December 2024 (North America) are shown below:
2024 2023
Pre-tax discount rate Long term growth rate Period of forecast (years) Pre-tax discount rate Long term growth rate Period of forecast (years)
Europe:
Europe 14.7% 1.4% 5.0
North America:
North America 15.5% 2.1% 5.0
Asia:
Asia 14.6% 3.5% 5.0
Power and Connectivity:
Power Solutions 13.8% 2.0% 5.0
IoT Solutions 14.1% 1.9% 5.0
Global Manufacturing Solutions:
Global Manufacturing Solutions 16.5% 3.1% 5.0
Sensors and Specialist Components:
Resistors 13.8% 1.9% 5.0
Sensors 13.6% 2.0% 5.0
The date of the annual impairment test was 30 September 2024 for the Europe
and Asia CGUs with the impairment test for North America being carried out as
at 31 December 2024. The recoverable amounts associated with the goodwill
balances which are based on these performance projections and current forecast
information do not indicate that any goodwill balance, other than that for
North America, is impaired. Based on the impairment testing performed, an
impairment charge of £36.7 million was recorded in 2024 (2023: £nil) in
respect of the North America group of CGUs related to the operational issues
and weak performance in North America, the timing of the recoverability in the
profitability and certain macroeconomic assumptions including the discount
rate. After impairment, the recoverable amount of the North America group of
CGUs was £148.8 million.
The impairment charge is shown as an adjusting item (see note 7) in
conjunction with related assets in the North America group of CGUs. In the
prior year an impairment charge of £17.7 million was recognised in relation
to the IoT Solutions CGU and was recorded in assets held for sale as at 31
December 2023.
TT Electronics Plc
Results for the year ended 31 December 2024
5 Goodwill continued
Sensitivity Analysis
Sensitivity analysis has been performed on the key assumptions; operating cash
flow projections, revenue growth rates and discount rate. Cash flows can be
impacted by changes to sales prices, direct costs and replacement capital
expenditure; individually they are not significant assumptions. Forecast sales
growth rates are based on past experience adjusted for the strategic direction
and near-term investment priorities. Cash flow forecasts are determined based
on historic experience of operating margins, adjusted for the impact of
changes in product mix and cost-saving initiatives, including the impact of
our committed restructuring projects and cash conversion based on historical
experience. If a company's actual performance does not meet these projections
this could lead to an impairment of the goodwill in future periods.
In accordance with IAS 36 'Impairment of Assets', sensitivity analysis has
been carried out with respect to the North America group of CGUs, which has a
recoverable amount of £148.8 million as at 31 December 2024, as illustrated
below:
· a further 1 per cent increase in the discount rate would result
in a reduction in value in use (and additional impairment) of £11.3
million.
· a further 5 per cent decrease in operating profit over the entire
assessment period (driven by lower than anticipated margin) would result in a
reduction in value in use (and additional impairment) of £8.2 million.
· a 10 per cent reduction in the terminal value of operating profit
(driven by lower than anticipated margin) would result in a reduction in value
in use (and additional impairment) of £10.1 million.
· If working capital cash inflows expected in 2025 fail to
materialise this would result in a reduction in value in use of £6.1 million
· A 12 month delay in the anticipated improvement in the financial
performance of our Cleveland manufacturing site would result in a reduction in
value in use (and additional impairment) of £14.9 million
6 Finance costs and finance income
£million 2024 2023
Interest income 0.5 0.1
Net interest income on pension schemes in surplus 1.1 1.5
Finance income 1.6 1.6
Interest expense 10.1 9.9
Interest on lease liabilities 0.7 0.8
Net interest expense on pension schemes in deficit 0.1 0.1
Amortisation of arrangement fees 0.6 0.6
Finance costs 11.5 11.4
Net finance costs 9.9 9.8
TT Electronics Plc
Results for the year ended 31 December 2024
7 Adjusting items
As described in note 2 , adjusted profit measures are an alternative
performance measure used by the Board to monitor the operating performance of
the Group.
2024 2023
£million Operating profit Tax Operating profit Tax
restated (1)
restated (1)
As reported (23.5) (20.0) 3.0 (4.5)
Restructuring costs
Restructuring costs 0.1 - (2.0) 0.7
0.1 - (2.0) 0.7
Pension restructuring costs
Pension restructuring costs (1.3) 0.3 (1.9) 0.7
(1.3) 0.3 (1.9) 0.7
Asset impairments and measurement losses
Asset impairments (52.2) 3.2 - -
Deferred tax asset impairment - (16.0)
Measurement loss on assets classified as held for sale - - (32.5) -
(52.2) (12.8) (32.5) -
Amortisation of intangible assets arising on business combinations
Amortisation of intangible assets arising on business combinations (2.7) 0.5 (4.6) 1.6
(2.7) 0.5 (4.6) 1.6
Acquisition and disposal related costs
Torotel integration costs - - (0.4) 0.1
Ferranti Power and Control acquisition and integration costs (0.2) - (1.3) 0.2
Disposal costs (4.4) (0.4) (1.2) 0.2
Property sale 0.7 - - -
Other (0.6) 0.1 (0.2) -
(4.5) (0.3) (3.1) 0.5
Total items excluded from adjusted measure (60.6) (12.3) (44.1) 3.5
Adjusted measure 37.1 (7.7) 47.1 (8.0)
(1. 'Adjusted operating profit' and 'tax' have been restated as described in
note 2.)
Restructuring credit £0.1 million (2023: £2.0 million cost)
Net restructuring credit was £0.1 million comprising a credit of £0.4
million in respect of the closure of our Barbados facility in 2021 partly
offset by £0.3 million cost in respect of the closure of the Hatfield, USA
facility. In the prior period restructuring costs of £2.0 million relate to
costs associated with the relocation of production facilities from our USA
site in Covina to Kansas, representing the last stage of the self-help
programme which started in 2020.
Pension restructuring costs £1.3 million (2023: £1.9 million)
Pension restructuring costs of £1.3 million (2023: £1.9 million) comprised
£1.1 million (2023: £1.9 million) associated with the buy out of the UK
scheme and a settlement cost of £0.2 million in respect of the buy out of one
of the US schemes that completed in January 2024.
Asset impairments and measurement losses £52.2 million (2023: £32.5 million)
Due to revised forecasts for one manufacturing site in North America, in the
context of the weak components market, impairment charges were recognised in
the North America segment. The impairment was £15.5 million in total
comprising £9.9 million of property, plant and equipment, £5.4 million of
right of use assets and £0.2 million of intangible assets. The impairment
reduced the carrying value to £0.6 million for property, plant and equipment,
representing fair value less cost of disposal, and £nil for right of use
assets and intangible assets.
During the year an impairment of £36.7 million was recognised against
goodwill for the North America segment reflecting recent trading performance
and based on a prudent recovery assumption
As at 31 December 2024 the Group derecognised £16.0 million of deferred tax
assets reflecting the recent performance and near term outlook for the North
America region. The associated losses remain available to the Group once the
North America region returns to taxable profit.
Measurement loss on assets classified as held for sale in the prior year of
£32.5 million relates to the writing down of assets held for sale in
preparation for the sale of three business units to the Cicor Group ('Project
Albert', see note 4).
TT Electronics Plc
Results for the year ended 31 December 2024
7 Adjusting items continued
Amortisation of intangible assets arising on business combinations £2.7
million (2023: £4.6 million)
Amortisation of intangible assets arising on business combinations £2.7
million (2023: £4.6 million) relate to amortisation of the fair value of
acquired order books, acquired customer relationships and other intangible
assets acquired on business combinations.
Acquisition and disposal related costs £4.5 million (2023: £3.1 million)
Acquisition and disposal related costs of £4.4 million (2023: £3.1 million)
comprise £4.4 million (2023: £1.2 million) in relation to the sale of three
business units to the Cicor Group ('Project Albert', see note 4), £0.3
million relating to costs incurred in preparing land for sale, £0.3 million
relating to historic legal claims, £0.2 million (2023: £1.3 million)
relating to the acquisition of the Power and Control business of Ferranti
Technologies Ltd. based in Manchester, UK, and a gain of £0.7 million
relating to the sale of property in Pembroke, UK. The prior year included
£0.4 million of integration costs relating to the acquisition of Torotel, Inc
based in Kansas, US.
8 Taxation
a) Analysis of the tax charge for the year
£million 2024 2023
Restated (1)
Current tax
Current income tax charge 13.9 11.1
Adjustments in respect of current income tax of previous year 1.0 1.9
Total current tax charge 14.9 13.0
Deferred tax
Relating to origination and reversal of temporary differences (10.9) (4.1)
Change in tax rate 0.1 -
Impairment of deferred tax assets in the North America segment 16.0 -
Adjustments in respect of deferred tax of previous years (0.1) (4.4)
Total deferred tax credit 5.1 (8.5)
Total tax charge in the income statement 20.0 4.5
(1. The tax charge for 2023 has been restated as described in note 2.)
The applicable tax rate for the period is based on the UK standard rate of
corporation tax of 25.0% (2023: 23.5%). Overseas taxation is calculated at the
rates prevailing in the respective jurisdictions. The Group's effective tax
rate for the year was (59.9%) (the adjusted tax rate was 28.3%, see section
'Reconciliation of KPIs and non IFRS measures'). Included within the total tax
charge above is a £12.3 million debit relating to items reported outside
adjusted profit (2023: £3.5 million credit).
b) Reconciliation of the total tax charge for the year
£million 2024 2023
Restated (1)
Loss before tax from continuing operations (33.4) (6.8)
Loss before tax multiplied by the standard rate of corporation tax in the UK (8.3) (1.5)
of 25% (2023: 23.5%)
Effects of:
Impact on deferred tax arising from changes in tax rates 0.1 0.1
Overseas tax rate differences 3.0 (0.5)
Items not deductible for tax purposes or income not taxable 8.2 9.7
Adjustment to current tax in respect of prior periods 0.9 0.1
Current year tax losses and other items not recognised 0.3 (0.8)
Impairment of deferred tax assets in the North America segment 16.0 -
Adjustments in respect of deferred tax of previous years (0.2) (2.6)
Total tax charge reported in the income statement 20.0 4.5
(1. The tax charge for 2023 has been restated as described in note 2.)
The overall aim of the Group's tax strategy is to support business operations
by ensuring a sustainable tax rate, mitigating tax risks in a timely and
cost-efficient way and complying with tax legislation in the jurisdictions in
which the Group operates. It is however inevitable that the Group will be
subject to routine tax audits or is in ongoing disputes with tax authorities
in the multiple jurisdictions it operates within. This is much more likely to
arise in situations involving more than one tax jurisdiction. Differences in
interpretation of legislation, of global standards (e.g. OECD guidance) and of
commercial transactions undertaken by the Group between different tax
authorities are one of the main causes of tax exposures and tax risks for the
Group.
TT Electronics Plc
Results for the year ended 31 December 2024
8 Taxation continued
In order to manage the risk to the Group an assessment is made of such tax
exposures and provisions are created using the best estimate of the most
likely amount to be incurred within a range of possible outcomes. The
resolution of the Group's tax exposures can take a considerable period of time
to conclude and, in some circumstances, it can be difficult to predict the
final outcome.
The current tax liability at 31 December 2024 includes tax provisions of
£10.4 million (2023: £9.3 million). The Group believes the range of
reasonable possible outcomes in respect of these exposures is tax liabilities
of up to £13.9 million (2023: £12.3 million).
c) Deferred tax
The Group completed a five year forward looking strategic plan covering the
periods from 2025 to 2029 in which it was forecast that the Europe and Asia
regions would show increasing profitability. Therefore, a deferred tax asset
relating to these regions was recognised on the basis that it is considered
probable that net taxable profits will be recognised in the future.
The authorised pension surplus payments charge reduced from 35% to 25% from 6
April 2024. The deferred tax liability has been recognised at 25% (2023: 35%).
The amounts of deferred taxation assets/(liabilities) provided in the
financial statements are as follows:
£million As at 1 Jan 2024 Continuing operations Recognised in equity/ OCI Net exchange translation As at 31 December 2024
Intangible assets (8.5) 0.4 - (0.1) (8.2)
Property, plant and equipment (1.4) 1.1 - (0.2) (0.5)
Deferred development costs (0.3) 0.2 - - (0.1)
Retirement benefit obligations (8.4) 3.8 3.1 0.1 (1.4)
Inventories 0.8 0.4 - - 1.2
Tax losses 14.1 (13.0) - 0.3 1.4
Unremitted overseas earnings (0.8) 0.5 - (0.1) (0.4)
Share-based payments 0.7 (0.2) (0.2) - 0.3
Cash flow hedges (0.6) - 2.4 (0.2) 1.6
Short-term temporary differences 14.0 1.7 - - 15.7
Net deferred tax asset/(liability) 9.6 (5.1) 5.3 (0.2) 9.6
Deferred tax assets 16.6 13.1
Deferred tax liabilities (7.0) (3.5)
Net deferred tax asset/(liability) 9.6 9.6
£million As at 1 Jan 2023 Continuing operations Recognised in equity/ OCI Transferred to assets and liabilities classified as held for sale Net exchange translation As at 31 December 2023
Restated (1)
Intangible assets (12.4) 1.2 - 2.7 - (8.5)
Property, plant and equipment 0.8 (1.2) - (1.0) - (1.4)
Deferred development costs (0.5) 0.2 - - - (0.3)
Retirement benefit obligations (10.4) 2.1 (0.1) - - (8.4)
Inventories 0.9 (0.2) - - 0.1 0.8
Tax losses 10.7 3.6 - - (0.2) 14.1
Unremitted overseas earnings (1.8) 1.0 - - - (0.8)
Share-based payments 0.7 - (0.1) - 0.1 0.7
Cash flow hedges 0.1 - (0.7) - - (0.6)
Short-term temporary differences 12.7 1.8 - (0.4) (0.1) 14.0
Net deferred tax asset/(liability) 0.8 8.5 (0.9) 1.3 (0.1) 9.6
Deferred tax assets 13.2 16.6
Deferred tax liabilities (12.4) (7.0)
Net deferred tax asset/(liability) 0.8 9.6
(1. 'Deferred tax assets' has been restated as described in note 2.)
TT Electronics Plc
Results for the year ended 31 December 2024
9 Dividends
2024 2024 2023 2023
pence per share
£million
pence per share
£million
Final dividend paid for prior year 4.65 8.2 4.30 7.5
Interim dividend declared for current year 2.25 4.0 2.15 3.8
The Directors do not recommend a final dividend.
10 Earnings per share
Basic earnings/(loss) per share is calculated by dividing the profit/(loss)
attributable to owners of the Company by the weighted average number of shares
in issue during the year.
Pence 2024 2023
Restated (1)
Loss per share (pence)
Basic (30.2) (6.4)
Diluted (30.2) (6.4)
(1. 'Loss per share' has been restated as described in note 2.)
As the Group made a statutory loss in 2024 and 2023, diluted statutory EPS for
2024 has been calculated using the basic weighted average number of shares
because using weighted average diluted shares would be anti-dilutive.
The numbers used in calculating adjusted, basic and diluted earnings per share
are shown below. Adjusted earnings per share is based on the adjusted profit
after interest and tax.
Adjusted earnings per share:
£million (unless otherwise stated) 2024 2023
Restated (1)
Loss for the year attributable to owners of the Company (53.4) (11.3)
Restructuring costs (0.1) 2.0
Pension restructuring costs 1.3 1.9
Asset impairments and measurement losses 52.2 32.5
Amortisation of intangible assets arising on business combinations 2.7 4.6
Acquisition and disposal related costs 4.5 3.1
Tax effect of above items (see note 7) 12.3 (3.5)
Adjusted earnings 19.5 29.3
Adjusted earnings per share (pence) 11.0 16.7
Adjusted diluted earnings per share (pence) 10.9 16.4
(1. 'Loss for the year attributable to owners of the Company' and 'Adjusted
earnings per share' have been restated as described in note 2.)
The weighted average number of shares in issue is as follows (new shares
issued in the year described in note 13):
million 2024 2023
Basic 176.9 175.6
Adjustment for share awards 1.6 2.6
Diluted 178.5 178.2
TT Electronics Plc
Results for the year ended 31 December 2024
11 Reconciliation of net cash flow to movement in net debt
Net cash of £69.1 million (2023: £76.5 million) comprises cash at bank and
in hand of £69.2 million (2023: £74.1 million), overdrafts of £0.1 million
(2023: £1.2 million) and cash within assets held for sale of £nil (2023:
£3.6 million).
£million Net cash Lease liabilities Borrowings Net debt
At 1 January 2023 61.3 (23.1) (176.6) (138.4)
Cash flow 19.3 - - 19.3
Transferred to held for sale (3.6) 2.6 - (1.0)
Repayment of borrowings - - 26.1 26.1
Proceeds from borrowings - - (32.7) (32.7)
Payment of lease liabilities - 4.4 - 4.4
New leases - (3.4) - (3.4)
Net movement in loan arrangement fees - - (0.1) (0.1)
Exchange differences (4.1) 1.3 1.4 (1.4)
At 31 December 2023 72.9 (18.2) (181.9) (127.2)
Included within assets classified as held for sale and associated liabilities 3.6 (2.6) - 1.0
At 31 December 2023 76.5 (20.8) (181.9) (126.2)
Cash flow (4.1) - - (4.1)
Disposals of business (3.6) 2.6 - (1.0)
Repayment of borrowings - - 49.2 49.2
Proceeds from borrowings - - (15.1) (15.1)
Net movement in loan arrangement fees - - (0.2) (0.2)
Payment of lease liabilities - 4.2 - 4.2
New leases - (3.0) - (3.0)
Exchange differences 0.3 (0.3) (1.2) (1.2)
At 31 December 2024 69.1 (17.3) (149.2) (97.4)
TT Electronics Plc
Results for the year ended 31 December 2024
12 Retirement benefit schemes
Defined contribution schemes
The Group operates 401(k) plans in North America and defined contribution
arrangements in the rest of the world. The assets of these schemes are held
independently of the Group and are not on its balance sheet. The total
contributions charged by the Group in respect of defined contribution schemes
were £3.3 million (2023: £3.5 million).
Defined benefit schemes
At 31 December 2024 the Group operated one defined benefit schemes in the UK
(the TT Group (1993) Pension Scheme) and one overseas defined benefit scheme
in the USA. These schemes are closed to new members and the UK scheme is
closed to future accrual.
The TT Group scheme commenced in 1993 and increased in size in 2006, 2007 and
2019 through the mergers of former UK schemes following a number of
acquisitions. The parent company is the sponsoring employer in the TT Group
scheme. The TT Group scheme is governed by TTG Pension Trustees Limited (the
"Trustee") that has control over the operation, funding and investment
strategy in consultation with the Group.
In November 2022, the Trustees of the TT Group Scheme entered into a bulk
annuity insurance contract (a "buy-in policy") with an insurer in respect of
the liabilities of the defined benefit scheme. The insurer will pay into the
Scheme cash matching the benefits covered by the policy which are due to
members. The Trustee is of the opinion that this investment decision is
appropriate, reduces the risks in the Scheme and provides additional security
for the benefits due to members of the Scheme. The Trustee continues to be
responsible for running the Scheme and retains the legal obligation for the
benefits provided under the Scheme.
As the buy-in policy is a qualifying insurance asset, the fair value of the
insurance policy is deemed to be the present value of the obligations that
have been insured. The policy secured matches the benefits due to Scheme
members under the Scheme's Trust Deed and Rules.
Since the assets of the Scheme were greater than the premium required to
secure the liabilities through the buy-in, the Scheme is in a net asset
position at 31 December 2024 of £7.1 million.
The Group is not exposed to any unusual, entity specific or scheme specific
risks, but given the material nature of the TT Group scheme, the Group has
developed a comprehensive strategy covering the following areas to manage the
financial risk associated with it:
• Maintaining a long term working partnership with the Trustee
to ensure strong governance of risks within the TT Group scheme. The TT Group
scheme is a long term undertaking and is managed accordingly, in order to
provide security to members' benefits and value for money to the Group.
• The Scheme's investment strategy has been assessed as being
low risk as the insured asset matches changes in the assessed value of the
Schemes liabilities due to changes in interest rates, inflationary
expectations and longevity expectations. The buy-in policy therefore matches
the term and nature of the liabilities.
The weighted average duration of the TT Group scheme defined benefit
obligation is around 11 years.
UK legislation requires the Trustee to carry out a statutory funding valuation
at least every three years and to target full funding against a basis that
prudently reflects the TT Group scheme's risk exposure. The last triennial
valuation of the TT Group scheme as at April 2022 showed a net surplus of
£45.4 million against the Trustee's statutory funding objective.
Due to the favourable funding position the Trustee and Company have agreed
that there was no requirement for any further funding contributions to the TT
Group scheme. In December 2024 a £15.0 million (2023: £5.0 million) refund
of the surplus was paid to the group out of scheme assets by the Trustee
(£11.2 million (2023: £3.2 million) net of tax due, which has been paid
directly by the scheme).
In the year ended 31 December 2023 the Trustees of the BI Technologies
Corporation Retirement Plan, one of the US defined benefit schemes in the USA,
completed a partial buy-out and a bulk settlement exercise, extinguishing
gross liabilities of £5.5 million in total. In January 2024, the buy-out was
completed, extinguishing the remaining gross liabilities. A final payment of
£1.8 million was made and a settlement cost of £0.2 million was recognised
within items excluded from adjusted operating profit as a result of this
exercise.
TT Electronics Plc
Results for the year ended 31 December 2024
12 Retirement benefit schemes continued
An analysis of the pension surplus/(deficit) by scheme is shown below:
£million 2024 2023
TT Group (1993) 7.1 25.3
USA scheme (1.5) (3.1)
Net surplus 5.6 22.2
Amounts recognised in the consolidated income statement are:
£million 2024 2023
Scheme administration costs (1.0) (1.3)
Net loss on pension projects (excluded from adjusted operating profit) (1.3) (1.9)
Net interest credit 1.1 1.4
13 Share capital
£million 2024 2023
Issued and fully paid
177,884,541 (2023: 177,371,049) ordinary shares of 25p each 44.5 44.3
During the period the Company issued 513,492 ordinary shares as a result of
share options being exercised under the Sharesave scheme and Share Purchase
plans.
The performance conditions of the Restricted Share Plan awards issued in 2021,
2022 and 2023 and the Long-term Incentive Plan awards issued in 2021 were met
and shares were allocated to award holders from existing shares held by an
Employee Benefit Trust for £nil consideration.
The aggregate consideration received for all share issues during the year was
£0.8 million which was represented by a £0.2 million increase in share
capital and a £0.6 million increase in share premium.
14 Related party transactions
Transactions between the Company and its subsidiaries have been eliminated on
consolidation and are not disclosed in this note.
No related party transactions have taken place in 2024 or 2023 that have
affected the financial position or performance of the Group.
Principal risk and uncertainties
The Group continues to be exposed to operational and financial risks and has
an established, structured approach to identifying,
assessing, and managing those risks. These risks relate to the following
areas: general revenue reduction; contractual risks;
research and development; people and capability; supplier resilience; IT
systems and information; M&A and integration; sustainability, climate
change and the environment; health and safety; legal and regulatory compliance
and geopolitical risks.
TT Electronics Plc
Results for the year ended 31 December 2024
Reconciliation of KPIs and non IFRS measures
In accordance with the Guidelines on APMs issued by the European Securities
and Markets Authority (ESMA), additional information is provided on the APMs
used by the Group below.
To assist with the understanding of earnings trends, the Group has included
within its financial statements APMs adjusted operating profit and other
adjusted profit measures. The APMs used are not defined terms under IFRS and
therefore may not be comparable to similar measures used by other companies.
They are not intended to be a substitute for, or superior to, GAAP measures.
Management uses adjusted measures to assess the operating performance of the
Group, having adjusted for specific items as detailed in note 7. They form the
basis of internal management accounts and are used for decision making,
including capital allocation, with a subset also forming the basis of internal
incentive arrangements. By using adjusted measures in segmental reporting,
this enables readers of the financial statements to recognise how incentive
performance is targeted. Adjusted measures are also presented in this
announcement because the Directors believe they provide additional useful
information to shareholders on comparable trends over time. Finally, this
presentation allows for separate disclosure and specific narrative to be
included concerning the adjusting items; this helps to ensure performance in
any one year can be more clearly understood by the user of the financial
statements.
Income statement measures:
Alternative Performance Measure Closest equivalent statutory measure Note reference to reconciliation to statutory measure Definition and purpose
Adjusted operating Operating profit Adjusting items as disclosed in note 7 Adjusted operating profit has been defined as operating profit from continuing
operations excluding the impacts of significant restructuring programmes,
profit significant one-off items including property disposals, impairment charges
significant in nature and/or value, business acquisition, integration, and
divestment related activity; and the amortisation of intangible assets
recognised on acquisition. Acquisition and disposal related items include the
writing off of the pre-acquisition profit element of inventory written up on
acquisition, other direct costs associated with business combinations and
adjustments to contingent consideration related to acquired businesses.
Restructuring includes significant changes in footprint (including movement of
production facilities) and significant costs of management changes.
To provide a measure of the operating profits excluding the impacts of
significant items such as restructuring or acquisition related activity and
other items such as amortisation of intangibles which may not be present in
peer companies which have grown organically.
Adjusted operating Operating profit margin Adjusting items as disclosed in note 7 Adjusted operating profit as a percentage of revenue.
margin To provide a measure of the operating profits excluding the impacts of
significant items such as restructuring or acquisition related activity and
other items such as amortisation of intangibles which may not be present in
peer companies which have grown organically.
Adjusted earnings Earnings per share See note 10 for the reconciliation and calculation of adjusted earnings per The profit for the year attributable to the owners of the Group adjusted to
share exclude the items not included within adjusted operating profit divided by the
per share weighted average number of shares in issue during the year.
To provide a measure of earnings per share excluding the impacts of
significant items such as restructuring or acquisition related activity and
other items such as amortisation of intangibles which may not be present in
peer companies which have grown organically.
TT Electronics Plc
Results for the year ended 31 December 2024
Income statement measures continued:
Alternative Performance Measure Closest equivalent statutory measure Note reference to reconciliation to statutory measure Definition and purpose
Adjusted Diluted earnings See note 10 for the reconciliation and calculation of adjusted diluted The profit for the year attributable to the owners of the Group adjusted to
earnings per share exclude the items not included within adjusted operating profit divided by the
diluted per share weighted average number of shares in issue during the year, adjusted for the
effects of any potentially dilutive options.
earnings
To provide a measure of earnings per share excluding the impacts of
per share significant items such as restructuring or acquisition related activity and
other items such as amortisation of intangibles which may not be present in
peer companies which have grown organically.
Prior period revenue and adjusted operating profit at constant currency Revenue and operating profit See note APM 1 Revenue and adjusted operating profit for the prior year retranslated at the
current year's foreign exchange rates.
Organic Revenue See note APM 2 Revenue and adjusted operating profit from continuing operations in the
current year compared to the prior year, excluding the effects of currency
revenue and adjusted operating profit movements, acquisitions and disposals. This measures the underlying growth or
decline of the business.
To provide a comparable view of the revenue growth of the business from period
to period excluding acquisition and disposal impacts.
Adjusted effective tax charge Effective tax charge See note APM 3 The effective tax charge on the company's adjusted profit, which gives a
clearer view of the ongoing tax rate by excluding the effects of unusual or
non-recurring items.
Return on invested None See note APM 4 Adjusted operating profit for the year divided by average invested capital for
the year. Average invested capital excludes pensions, provisions, tax
capital balances, derivative financial assets and liabilities, cash and borrowings and
is calculated at average rates taking twelve monthly balances.
This measures how efficiently assets are utilised to generate returns with the
target of exceeding the cost to hold the assets.
Revenue and adjusted operating profit excluding passthrough revenue: Revenue, operating profit and operating margin See note APM 13 Revenue and operating margin excluding the impact of nil margin sales to
customers to secure their supply chain.
Organic revenue and adjusted operating profit excluding pass through revenues Revenue, operating profit and operating margin See note APM 14 This is organic revenue and adjusted operating profit (see APM 2) with pass
through revenues (see APM 13) removed.
To provide a comparable view of growth for the business from period to period
excluding acquisition and disposal impacts and one-off nil margin sales.
TT Electronics Plc
Results for the year ended 31 December 2024
Statement of financial position measures:
Alternative Performance Measure Closest equivalent statutory measure Note reference to reconciliation to statutory measure Definition and purpose
Net debt Cash and cash equivalents less borrowings and lease liabilities Reconciliation of net cash flow to movement in net (debt)/ funds (note 11) Net debt comprises cash and cash equivalents and borrowings including lease
liabilities.
This is additional information provided which may be helpful to the user in
understanding the liquidity and financial structure of the business.
Leverage (bank covenant) Cash and cash equivalents less borrowings See note APM 12 Leverage is the net debt defined as per the banking covenants (net debt
(excluding lease liabilities) adjusted for certain terms as per the bank
covenants) divided by EBITDA excluding items removed from adjusted profit and
further adjusted for certain terms as per the bank covenants.
Provides additional information over the Group's financial covenants to assist
with assessing solvency and liquidity.
Net capital and development expenditure None See note APM 5 Purchase of property, plant and equipment net of government grants (excluding
property disposals), purchase of intangibles (excluding acquisition
(net capex) intangibles) and capitalised development.
A measure of the Group's investments in capex and development to support
longer term growth.
Dividend per share Dividend per share Not applicable Amounts payable by dividend in terms of pence per share.
Provides the dividend return per share to shareholders.
TT Electronics Plc
Results for the year ended 31 December 2024
Statement of cash flows measures:
Alternative Performance Measure Closest equivalent statutory measure Note reference to reconciliation to statutory measure Definition and purpose
Adjusted operating Operating cash flow See note APM 6 Adjusted operating profit, excluding depreciation of property, plant and
equipment and amortisation of intangible assets less working capital and other
cash flow non-cash movements.
An additional measure to help understand the Group's operating cash
generation.
Adjusted operating Operating cash flow See note APM 7 Adjusted operating cash flow less net capital and development expenditure.
cash flow An additional measure to help understand the Group's operating cash generation
after the deduction of capex.
post capex
Working Cashflow - inventories payables, provisions and receivables See note APM 8 Working capital comprises three statutory cashflow figures:
(increase)/decrease in inventories, increase/(decrease) in payables and
capital provisions, and (increase)/decrease in receivables. This definition includes
the movement of any provisions over trade receivables.
cashflow
To provide users a measure of how effectively the group is managing its
working capital and the resultant impact on liquidity.
Free cash Net increase/ decrease in cash and cash equivalents See note APM 9 Free cash flow represents cash generated from trading after all costs
including restructuring, pension contributions, tax and interest payments.
flow Cashflows to settle LTIP schemes are excluded.
Free cash flow provides a measure of how successful the company is in creating
cash during the period which is then able to be used by the Group at its
discretion.
Cash None See note APM 10 Adjusted operating cash flow post capex (less any property disposals which
were part of restructuring programmes) divided by adjusted operating profit.
conversion
Cash conversion measures how effectively we convert profit into cash and
tracks the management of our working capital and capital expenditure.
R&D cash spend as a percentage of revenue None See note APM 11 R&D cash spend and R&D investment as a percentage of revenue excludes
revenue from contract manufacturing services as these activities do not give
rise to intellectual property.
To provide a measure of the company's expenditure on R&D relative to its
overall size which may be helpful in considering the Group's longer-term
investment in future product pipeline.
TT Electronics Plc
Results for the year ended 31 December 2024
APM 1 - Prior period revenue and adjusted operating profit at constant
currency:
2023
£million Europe North America Asia Total
2023 revenue 169.6 229.5 214.8 613.9
Foreign exchange impact - (7.5) (9.2) (16.7)
2023 revenue at 2024 exchange rates 169.6 222.0 205.6 597.2
2023
£million Europe North America Asia Total Operating Segments Central Total
2023 adjusted operating profit - restated (1) 11.9 19.4 23.9 55.2 (8.1) 47.1
Foreign exchange impact 0.1 (1.0) (1.3) (2.2) - (2.2)
2023 adjusted operating profit at 2024 exchange rates 12.0 18.4 22.6 53.0 (8.1) 44.9
(1. 'Adjusted operating profit' has been restated as described in note 2. This
was related to the North America segment.)
APM 2 - Organic revenue and operating profit:
2024
£million Europe North America Asia Total
2024 revenue 146.3 184.4 190.4 521.1
Removal of businesses disposed (11.8) - (4.3) (16.1)
2024 revenue on an organic basis 134.5 184.4 186.1 505.0
2023 revenue 169.6 229.5 214.8 613.9
Removal of businesses disposed (51.3) - (17.3) (68.6)
Foreign exchange impact - (7.5) (8.7) (16.2)
2023 revenue on an organic basis 118.3 222.0 188.8 529.1
Organic revenue increase (%) 14% (17%) (1%) (5%)
2024
£million Europe North America Asia Total Operating Segments Central Total
2024 operating profit 18.9 (2.7) 28.5 44.7 (7.6) 37.1
Removal of businesses disposed 0.5 - (0.3) 0.2 - 0.2
2024 operating profit on an organic basis 19.4 (2.7) 28.2 44.9 (7.6) 37.3
2023 operating profit - restated (1) 11.9 19.4 23.9 55.2 (8.1) 47.1
Removal of businesses disposed (0.2) - (1.7) (1.9) - (1.9)
Foreign exchange impact 0.1 (1.0) (1.2) (2.1) - (2.1)
2023 operating profit on an organic basis 11.8 18.4 21.0 51.2 (8.1) 43.1
Organic operating profit increase (%) 64% (115%) 34% (12%) 6% (13%)
(1. 'Adjusted operating profit' has been restated as described in note 2. This
was related to the North America segment.)
TT Electronics Plc
Results for the year ended 31 December 2024
APM 3 - Effective tax charge:
£million 2024 2023
Restated (1)
Adjusted operating profit 37.1 47.1
Net interest (9.9) (9.8)
Adjusted profit before tax 27.2 37.3
Adjusted tax (7.7) (8.0)
Adjusted effective tax rate 28.3% 21.4%
(1. 'Adjusted operating profit' has been restated as described in note 2.)
APM 4 - Return on invested capital:
£million 2024 2023
Restated (1)
Adjusted operating profit 37.1 47.1
Average invested capital 371.0 433.8
Return on invested capital 10.0% 10.9%
(1. 'Adjusted operating profit' has been restated as described in note 2.)
APM 5 - Net capital and development expenditure (net capex):
£million 2024 2023
Purchase of property, plant and equipment (6.9) (22.3)
Proceeds from sale of investment property, plant and equipment and capital 0.5 0.5
grants received
Capitalised development expenditure (1.8) (1.6)
Purchase of other intangibles (0.5) (0.6)
Net capital and development expenditure (8.7) (24.0)
TT Electronics Plc
Results for the year ended 31 December 2024
APM 6 - Adjusted operating cash flow:
£million 2024 2023
Restated (1)
Adjusted operating profit 37.1 47.1
Adjustments for:
Depreciation 12.2 14.0
Amortisation of intangible assets 1.6 2.5
Share based payment expense 2.2 3.1
Scheme funded pension administration costs 1.1 1.6
Other items 0.2 (0.7)
Decrease in inventories 12.8 5.3
(Increase)/decrease in receivables (2.2) 15.4
Decrease in payables and provisions (12.9) (15.5)
Adjusted operating cash flow 52.1 72.8
Reimbursement from pension schemes 9.4 3.2
Restructuring and acquisition related costs (0.6) (4.0)
Net cash generated from operations 60.9 72.0
Net income taxes paid (9.7) (9.1)
Net cash flow from operating activities 51.2 62.9
(1. 'Adjusted operating profit', 'Decrease in inventories' and
'(Increase)/decrease in receivables' have been restated as described in note
2.)
APM 7 - Adjusted operating cash flow post capex:
£million 2024 2023
Adjusted operating cash flow 52.1 72.8
Purchase of property, plant and equipment (6.9) (22.3)
Proceeds from sale of property, plant and equipment and government grants 0.5 0.5
received
Capitalised development expenditure (1.8) (1.6)
Purchase of other intangibles (0.5) (0.6)
Adjusted operating cash flow post capex 43.4 48.8
APM 8 - Working capital cashflow:
£million 2024 2023
Restated (1)
Decrease in inventories 12.8 5.3
(Increase)/decrease in receivables (2.2) 15.4
Decrease in payables and provisions (12.9) (15.5)
Scheme funded pension administration costs 1.1 1.6
Working capital cashflow (1.2) 6.8
(1. 'Decrease in inventories' and '(Increase)/decrease in receivables' have
been restated as described in note 2.)
TT Electronics Plc
Results for the year ended 31 December 2024
APM 9 - Free cash flow:
£million 2024 2023
Net cash flow from operating activities 51.2 62.9
Net cash flow from investing activities 3.5 (24.0)
Add back: Proceeds from disposal of business (17.5) -
Add back: Cash with disposed businesses 5.3 -
Payment of lease liabilities (4.2) (4.4)
Interest paid (10.6) (10.6)
Free cash flow 27.7 23.9
APM 10 - Cash conversion:
£million 2024 2023
Restated (1)
Adjusted operating profit 37.1 47.1
Adjusted operating cash flow post capex 43.4 48.8
Cash conversion 117% 104%
(1. 'Adjusted operating profit' has been restated as described in note 2.)
APM 11 - R&D cash spend as a percentage of revenue:
£million 2024 2023
Revenue (excluding contract manufacturing) 268.2 314.7
R&D cash spend 11.3 10.8
R&D cash spend as a percentage of revenue 4.2% 3.4%
APM 12 - Leverage:
£million 2024 2023
Restated (1)
Adjusted operating profit 37.1 47.1
Depreciation 12.2 14.0
Amortisation 1.6 2.5
EBITDA 50.9 63.6
Adjustment to align with covenants (5.3) (5.3)
EBITDA (covenants) 45.6 58.3
Net debt as per note 11 97.4 126.2
Less: leases (17.3) (20.8)
Net debt excluding leases 80.1 105.4
Adjustment to align with covenants 2.0 4.9
Net debt (covenants) 82.1 110.3
Leverage 1.8 1.9
(1. 'Adjusted operating profit' has been restated as described in note 2.)
TT Electronics Plc
Results for the year ended 31 December 2024
APM 13 - Revenue and adjusted operating profit excluding passthrough revenue:
£million 2024 2023
Restated (1)
Revenue 521.1 613.9
Removal of passthrough revenue (5.3) (19.9)
Revenue excluding passthrough revenue 515.8 594.0
Adjusted operating profit 37.1 47.1
Removal of operating profit attributable to passthrough revenue - -
Adjusted operating profit excluding passthrough revenue 37.1 47.1
Adjusted operating margin excluding passthrough revenue 7.2% 7.9%
(1. 'Adjusted operating profit' has been restated as described in note 2.)
APM 14 - Organic revenue and adjusted operating margin excluding pass through
revenues:
£million 2024 2023
Revenue 521.1 613.9
Removal of businesses disposed (16.1) (68.6)
Removal of passthrough revenue (5.3) (19.9)
FX adjustment to bring in line with 2024 fx rates - (15.1)
Organic revenue excluding passthrough 499.7 510.3
Organic revenue growth excluding passthrough (2%)
£million 2024 2023
Restated (1)
Adjusted operating profit 37.1 47.1
Removal of businesses disposed 0.2 (1.9)
Removal of adjusted operating profit attributable to passthrough revenue - -
FX adjustment to bring in line with 2024 fx rates - (2.1)
Organic adjusted operating profit excluding passthrough and disposed 37.3 43.1
businesses
Organic adjusted operating margin excluding passthrough and disposed 7.5% 8.4%
businesses
Organic adjusted operating profit growth excluding passthrough and disposed (13%)
businesses
(1. 'Adjusted operating profit' has been restated as described in note 2.)
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