Chief executive Richard Tyson pointed to “great performance on all metrics” targeted by TT Electronics (TTG) in the first half. Excluding the beneficial impact of currency movements, the maker of sensors and other specialist components achieved 6 per cent revenue growth, five percentage points of which were organic. The conversion of underlying operating profit into cash flow came in at 128 per cent, a marked improvement on the 63 per cent in last year's first half. Meanwhile, the sale of TT's transportation division to AVX for £119m, announced in July, should make TT “a higher-margin, higher-quality business” with more cash to spend.
Sensors and specialist components contributed 40 per cent of total company sales and saw a 6 per cent expansion at constant currencies. There was also strong demand for its power electronics business, which comprised 18 per cent of total revenue and saw significant growth of 25 per cent at constant currencies, to £33m. This was partly enabled by TT’s enhanced presence in the aerospace and defence market.
Headcount has been cut in global manufacturing to help improve profitability, after the division – which contributes 42 per cent of sales – suffered an 11 per cent drop in underlying operating profit, due to a fall in demand from European customers.
Accounting for the dilution from the recent disposal, analysts at Numis forecast pre-tax profit of £19.9m and EPS of 9.7p for the year to December 2017 (from £16.1m and 6.4p in 2016).
| TT ELECTRONICS (TTG) | ||||
| ORD PRICE: | 217p | MARKET VALUE: | £352m | |
| TOUCH: | 216.5-217.5p | 12-MONTH HIGH: | 223p | LOW: 129p |
| DIVIDEND YIELD: | 2.6% | PE RATIO: | 28 | |
| NET ASSET VALUE: | 144p* | NET DEBT: | 24% | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2016 (restated) | 159 | 2.4 | 0.6 | 1.70 |
| 2017 | 180 | 5.4 | 2.4 | 1.75 |
| % change | +13 | +125 | +300 | +3 |
| Ex-div: | 05 Oct | |||
| Payment: | 19 Oct | |||
| *Includes intangible assets of £134m, or 83p a share | ||||
