Things are looking steadier at TT electronics (TTG) after downgrades shook confidence last summer. Sales fell 4 per cent at constant currencies in 2012, but the company kept a close eye on margins and managed to boost underlying operating profits by 2 per cent and adjusted pre-tax profits by 9 per cent. The company also took steps to limit cost inflation, including shifting production to cheaper regions in the tough second half, but the average operating margin still leaves room for improvement, at 6.2 per cent. Management is targeting 8-10 per cent by the end of 2014.
The company sold its secure power division for £39.6m in the second half and is now wholly focused on electronics. Chief executive Geraint Anderson has created a new 'Sensing and Control' division, which would have represented 53 per cent of 2012 revenues. He says the new unit will make better use of plant resources and sales functions. New opportunities abound in the fast-growing Chinese automotive and aerospace markets in particular.
Orders have been healthier in 2013 so far, but Mr Anderson expects bumps in the road. Broker Peel Hunt maintains its pre-tax profit forecast at £29.1m for the current year, giving EPS of 13.2p (up from 11.6p).
TT Electronics (TTG) | ||||
|---|---|---|---|---|
| ORD PRICE: | 170p | MARKET VALUE: | £268m | |
| TOUCH: | 168-171p | 12-MONTH HIGH: | 205p | LOW: 108p |
| DIVIDEND YIELD: | 2.9% | PE RATIO: | 16 | |
| NET ASSET VALUE: | 120p* | NET CASH: | £46.7m | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2008 | 584 | 17.3 | 7.5 | 3.69 |
| 2009 | 464 | -16.6 | -12.1 | nil |
| 2010 | 556 | 25.1 | 11.9 | 2.80 |
| 2011** | 510 | 26.8 | 13.9 | 4.40 |
| 2012 | 477 | 23.4 | 11.0 | 5.00 |
| % change | -6 | -13 | -21 | +14 |
Ex-div: 15 May Payment: 30 May *Includes intangible assets of £78.4m, or 50p a share **Restated to reflect discontinued operations | ||||
