When we covered the half-year figures for auto and industrial components maker TT Electronics (TTG), we commented that "it may take another 18 months or so to get a real appreciation" of where chief executive Richard Tyson's self-help measures are taking it. We may have underestimated Mr Tyson's determination to put the engineer on a surer footing.
Six months down the track and we've already seen a marked improvement in profitability (see table). But markets remain challenging, notwithstanding an improved showing in Asia. Excluding the impact of exchange rates, acquisitions and disposals, revenue was flat on 2015. But operating profit was up a quarter at constant currencies to £31.3m, with a 120 basis point increase in the underlying margin. Return on capital expanded at a similar rate, while free cash flow headed in the right direction, aided by £12.3m in proceeds received from the sale of surplus sites in Weybridge, Fullerton and Werne. A maiden full-year contribution from Aero Stanrew, a manufacturer of electromagnetic components, added £18.3m to the top line.
Broker Numis gives adjusted pre-tax profit and EPS of £31m and 13.7p for the December 2017 year-end (from £26.9m and 11.9p in 2016).
| TT ELECTRONICS (TTG) | ||||
|---|---|---|---|---|
| ORD PRICE: | 168p | MARKET VALUE: | £273m | |
| TOUCH: | 168-169p | 12-MONTH HIGH: | 179p | LOW: 118p |
| DIVIDEND YIELD: | 3.3% | PE RATIO: | 16 | |
| NET ASSET VALUE: | 143p* | NET DEBT: | 24% | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 477 | 22.0 | 10.3 | 5.0 |
| 2013 | 532 | 18.3 | 8.8 | 5.4 |
| 2014 | 524 | -5.9 | -6.6 | 5.5 |
| 2015 | 510 | 13.8 | 6.5 | 5.5 |
| 2016 | 570 | 23.2 | 10.3 | 5.6 |
| % change | +12 | +68 | +58 | +2 |
Ex-div: 18 May Payment: 2 Jun *Includes intangible assets of £143m, or 88p a share | ||||
