Shares in TT Electronics (TTG) slumped 7 per cent after it recorded flat sales and lower earnings in the first half. Stripping out currency effects and restructuring charges, however, TT - which makes the sensors and controls needed for positioning and throttle control in BMW and Volkswagen vehicles - grew its operating profit by 10 per cent to almost £13m.
Stricter emissions regulations and the drive towards industrial power efficiency helped sales at TT's core sensing and control segment climb 6 per cent to about £144m, excluding currency impacts. It also benefited from strong demand for new products such as the Magnetorque Plus, which improves the efficiency of power-steering systems. Moreover, TT's recent purchase of measurement and control specialist Roxspur for an initial outlay of £7.5m promises to bolster its presence in lucrative industrial markets.
TT continued its cost-cutting and restructuring efforts, closing sales offices in Japan, France and Italy. In fact, lower costs and improved efficiency in its components division boosted the unit's operating profit almost four-fold to £3.7m. It also transferred additional product lines from California to Mexico, though a similar shift from Germany to Romania has been held up as talks with unions continue.
That delay prompted broker Numis to slash its 2015 forecasts by 14 per cent. It now expects pre-tax profits of £33.7m next year, giving EPS of 16.3p - up from £29m and 14p this year.
| TT ELECTRONICS (TTG) | ||||
|---|---|---|---|---|
| ORD PRICE: | 173p | MARKET VALUE: | £275m | |
| TOUCH: | 172-173p | 12-MONTH HIGH: | 225p | LOW: 172p |
| DIVIDEND YIELD: | 3.2% | PE RATIO: | 67 | |
| NET ASSET VALUE: | 119p* | NET DEBT: | 8% | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2013 | 261 | 8.9 | 4.1 | 1.6 |
| 2014 | 261 | -0.4 | -2.1 | 1.7 |
| % change | - | - | - | +6 |
Ex-div: 15 Oct Payment: 30 Oct *Includes intangible assets of £82.3m, or 52p a share | ||||
