In June, Geraint Anderson’s six-year tenure at TT Electronics (TTG) will end as it began - with a major restructuring. The manufacturer of sensors and power modules is now worth 10 times more. And the latest changes - to be overseen by incoming boss Richard Tyson, currently running Cobham’s aerospace business - could have a major impact on the share price, too.
Strip out £11.2m of restructuring costs and pre-tax profit grew 17 per cent last year to £29.5m. Broker Numis Securities reckons a currency headwind will cap profit at £30.4m this year, giving adjusted EPS of 14.7p (from 14.2p in 2013). But with further cost savings coming through, earnings are tipped to surge by over a third in 2015. TT’s new sensing and controls division will be the primary driver. More business with VW, Daimler, BMW and Chinese carmakers improved sales last year, although shifting work to Romania hurt margins temporarily.
Still, shedding up to £15m of lower-margin business and shutting legacy operations overseas should help generate group return on sales of 8 per cent in 2014. Expect further growth at the manufacturing division, too, and some recovery at the smaller-components unit, hit early last year by weaker industrial and military sales.
TT ELECTRONICS (TTG) | ||||
|---|---|---|---|---|
| ORD PRICE: | 220p | MARKET VALUE: | £349m | |
| TOUCH: | 219-221p | 12-MONTH HIGH: | 225p | LOW: 148p |
| DIVIDEND YIELD: | 2.5% | PE RATIO: | 25 | |
| NET ASSET VALUE: | 127p* | NET CASH: | £26.9m | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2009 | 464 | -16.6 | -12.1 | nil |
| 2010 | 556 | 25.1 | 11.9 | 2.8 |
| 2011 | 591 | 31.8 | 15.8 | 4.4 |
| 2012 | 477 | 22.0 | 10.3 | 5 |
| 2013 | 532 | 18.3 | 8.8 | 5.4 |
| % change | +12 | -17 | -15 | +8 |
Ex-div: 21 May Payment: 5 Jun *Includes intangible assets of £82m, or 52p per share | ||||
