TI Fluids still hostage to wider industry trends

Analytics from GlobalData point to a 13.7 per cent recovery in the global light vehicle market in 2021. Impressive on the face of it, until you realise that is set against a year that saw one of the greatest declines in automotive history.

Against this backdrop, TI Fluid Systems (TIFS), a manufacturer of fluid storage, carrying and delivery systems, recorded a 15.9 per cent fall in constant currency revenues for 2020, mirroring the overall contraction in global light vehicle production. Below the top line, the group swung to an operating loss of €176m (£150m), largely due to fair value impairments.

Analyst consensus sees TI Fluid Systems returning to EPS of 24¢ in 2021, versus a 48.9¢ loss per share in 2020.

Last May, the group’s US majority shareholder voted against the annual dividend payout. Yet management is intent on returning to the stated annual dividend policy for the 2021 financial year. It views this as “affordable and sustainable within its wider capital allocation framework”, so it is probably just as well that the group has extended the terms of its revolving credit facilities. Even beyond pandemic-linked disruption, uncertainties abound within the sector. Hold.

Last IC view: Hold, 179p, 18 Aug 2020