TI Fluid Systems (TIFS) is exposed to a global decline in light vehicle production, with worldwide volumes falling 5.6 per cent in 2019. The specialist in fluid carrying systems registered a 3.2 per cent net income decline, attributing weakening operating profit margins to an ailing Chinese market and European cost increases.
The group’s adjusted free cash flow rose 17.8 per cent to €172m, which alongside a voluntary €56.5m payment, helped bring net debt to 1.5 times adjusted cash profits. Cognisant of a structural move from conventional light vehicles, TI Fluid Systems is also investing in repositioning its business towards nascent vehicle technologies and electrification. In 2019 it established a thermal products facility in Morocco for battery electric vehicles, and hopes for lifetime revenues of €700m from its share of two electric vehicle contracts it won last year.
TI expects some short-term harm from the coronavirus outbreak, as car manufacturers across the world shutter factories. The group said that it is taking unspecified mitigating actions in response to the crisis.
Peel Hunt forecasts full-year 2020 pre-tax profits and earnings per share of €58m and 7.6¢ per share respectively, rising to €145m and 19¢ in 2021.
| TI FLUID SYSTEMS | ||||
| ORD PRICE: | 132p | MARKET VALUE: | £ 755m | |
| TOUCH: | 129-132p | 12-MONTH HIGH: | 282p | LOW: 125p |
| DIVIDEND YIELD: | 6.2% | PE RATIO: | 5 | |
| NET ASSET VALUE: | 224¢* | NET DEBT: | 76%** | |
| Year to 31 Dec | Turnover (€bn) | Pre-tax profit (€m) | Earnings per share (¢) | Dividend per share (¢) |
| 2016† | 3.35 | 133 | 12.05 | na |
| 2017 | 3.49 | 158 | 29.55 | 1.31 |
| 2018 | 3.47 | 217 | 26.53 | 8.96 |
| 2019 | 3.41 | 202 | 27.24 | 8.96 |
| % change | -2 | -7 | +3 | |
| Ex-div: | 23 Apr | |||
| Payment: | 29 May | |||
| £1=€1.1 *Includes intangible assets of €1.18bn, or 245¢ a share **Includes lease liabilities of £167m †Pre-IPO in October 2017 | ||||
