REG - TT Electronics PLC - Trading Update

TT electronicsAnnouncement

22/11/2023 07:15

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RNS Number : 2038U  TT Electronics PLC  22 November 2023

 

 

 

22 November 2023

 

TT Electronics plc

 

Positive underlying trading momentum

 

TT Electronics plc ("TT", "the Group"), a global provider of engineered
electronics for performance critical applications, publishes the following
trading update on the Group's performance in the four-month period ended 28
October 2023 ("the Period").

 

Trading update

 

The Group continues to show good year over year improvement with year-to-date
organic(1) revenue growth of 4 per cent (5 per cent excluding the pass-through
revenue in GMS). As previously guided, TT is returning to a more normal H1:H2
weighting of revenue(2), with sales in the four months to October reducing by
8 per cent organically (5 per cent reduction excluding pass through) against a
strong 2022 comparator.

 

The performance of our Power & Connectivity division continues to show
good year over year improvement, and GMS is sustaining its strong margin
performance. Trading in Sensors and Specialist Components has been in line
with our expectations other than the one-off impact of the previously
highlighted machinery breakdown experienced in one of our facilities, which
continued for longer than anticipated, impacting profit in Q3 by circa £2m.

 

As anticipated, we have seen order intake normalisation during the second half
as lead times have reduced, however, order visibility across the Group remains
above historic levels.

 

Positive financial position

 

The Group remains on track to deliver much improved cash generation over last
year and a further reduction in leverage.

 

Outlook

 

While the Board still expects good year on year improvement in revenue and
profit, as a result of the machinery breakdown in S&SC we now expect to
report Group adjusted profit before tax towards the lower end of current
market expectations for 2023(3).

 

We are mindful of the wider macroeconomic backdrop, but see continued positive
momentum in the business, with a robust order book providing good visibility
of revenues for 2024.

 

Peter France, TT Chief Executive Officer commented:

 

"Having joined in October, I have now visited the majority of our sites, spent
time with colleagues and met a number of our customers and other stakeholders.
I have been greatly impressed by the quality of our people, the strength of
our culture and the depth of our customer relationships.

 

I am excited about the potential for TT and can already see opportunities to
unlock further value across the business, driving growth, efficiencies and
performance through capitalising on our positions in the structural growth
markets in which we operate. I look forward to sharing more detailed thoughts
shortly after our FY23 results, as we plan the next phase of our disciplined
growth strategy.

 

The business continues to show good year over year improvement and I look
forward with confidence."

 

 

 For further information please contact:
 TT Electronics plc                       Tel: +44 (0)1932 827 779
 Peter France, Chief Executive Officer

 Mark Hoad, Chief Financial Officer

 Kate Moy, Head of Investor Relations and Communications

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

 

Notes:

 

1.   Organic growth is stated at constant currency and is calculated by
comparing current year actual results to prior year results retranslated at
current year actual exchange rates.  Organic revenue excludes the impact of
acquisitions and disposals.

2.   H1:H2 revenue weighting in FY22 was 44:56, versus a historic norm of
49:51

 

3.   Analyst consensus expectations for 2023 adjusted profit before tax are
in a range of £43.1m to £46.0m.

 

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

 

 

About TT Electronics

TT Electronics is a global provider of engineered electronics for performance
critical applications.

The company operates in industries where there are structural growth drivers,
working with market-leading customers primarily in the industrial, medical,
aerospace and defence sectors. Products designed and manufactured include
sensors, power management devices and connectivity solutions. TT has design
and manufacturing facilities in the UK, US, Sweden and Asia.

The company has three divisions. The Power and Connectivity division designs
and manufactures power application products and connectivity devices which
enable the capture and wireless transfer of data. We collaborate with our
customers to develop innovative solutions to optimise their electronic
systems. The Global Manufacturing Solutions division provides manufacturing
services and engineering solutions for our product divisions and to customers
that often require a lower volume and higher mix of different products. We
manufacture complex integrated product assemblies for our customers and
provide engineering services including designing testing solutions and
value-engineering. The Sensors and Specialist Components division works with
customers to develop standard and customised solutions including sensors and
power management devices. Our solutions improve the precision, speed and
reliability of critical aspects of our customers' applications.

Cautionary statement

This update contains forward-looking statements. These have been made by the
directors in good faith based on the information available to them up to the
time of their approval of this update. The directors can give no assurance
that these expectations will prove to have been correct. Due to the inherent
uncertainties, including both economic and business risk factors underlying
such forward-looking information, actual results may differ materially from
those expressed or implied by these forward-looking statements. The directors
undertake no obligation to update any forward-looking statements whether as a
result of new information, future events or otherwise.

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