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RNS Number : 0918M
TT Electronics PLC
19 January 2021
19 January 2021
TT Electronics plc
Resilient trading, strong cash performance
TT Electronics plc ("TT", "the Group"), a global provider of
engineered electronics for performance critical applications,
publishes the following Trading Update on the Group's performance
for the year ended 31 December 2020(1) .
Continued improvement in trading
The improvement trends seen to the end of October have
continued, with revenue in the last two months of 2020 only 4 per
cent lower than the previous year on an organic(2) basis.
Revenue for the full year of c. GBP432m, was 9 per cent lower on
a constant currency basis and 12 per cent lower on an organic
basis.
Order intake continues to improve across the Group. Bookings for
full year were at 99 per cent of revenue, and for the second half
were 103 per cent of revenue. The order book remains broadly in
line with this time last year.
Recognising the resilience of the Group's performance and strong
cash generation, the Board has committed to repay the Coronavirus
Job Retention Scheme (furlough) payments received from the UK
Government. The c. GBP1.1m cost of the repayment has been accrued
in the 2020 results.
With revenue and cost actions on track, the Board now
anticipates adjusted(3) profit before tax for the year in line with
external expectations(4) , having taken into account the GBP1.1m
furlough repayment.
Despite the national lockdown in the UK, and restrictions
elsewhere in the world, all our facilities remain open and are
delivering to customer requirements, whilst continuing to
prioritise the safety of our employees.
Strong cash performance and financial position
The Group's cash generation in the second half of the year was
strong, with a working capital inflow supporting the reduction in
the Group's net debt at 31 December 2020 to c. GBP84m including
IFRS 16 leases. As a result, net debt to underlying EBITDA on a
bank covenant basis(5) is expected to be c. 1.8 times.
MSCI rating
In the recent MSCI 2020 Environmental, Social and Governance
ratings assessment, TT received a rating of "AA", an upgrade on the
"A" received in the previous year. The 2020 rating establishes TT
as a leading company in MSCI's Electronic Equipment, Instruments
and Components sector index.
Margin enhancement
We continue to make good progress with the Group's extended
self-help programme. The project is on schedule to deliver the
expected GBP11-12m of run-rate benefits in 2023.
Virolens(R) update
Operational trials and validation testing are continuing and
applications for regulatory approvals of the Virolens(R) rapid
COVID-19 screening device are progressing. There is a wide range of
possible outcomes, but commercial interest in the device remains
significant.
Torotel integration progressing well
Torotel broadens TT's power electronics capabilities in the US,
adding recurring revenue streams from largely sole source positions
on multi-year growth programmes. Since completion of the
acquisition on 10 November 2020, activities to integrate the
business into TT's Power and Connectivity division have continued
at pace. Site re-branding is complete, finance and IT systems
integration is well progressed, workshops have been held to
identify business development opportunities, and synergy
expectations remain as expected.
Resumption of dividends
As indicated with our interim results in August, our intention
is to recommend a dividend at the time of the 2020 year-end results
announcement.
Richard Tyson, Chief Executive Officer said:
"TT has proven to be resilient in the face of the Covid
pandemic, benefitting from the actions we have taken to improve the
quality of the business. Order intake over the last few months is
encouraging as we look into 2021, a year in which we expect to see
continued revenue recovery and good profit growth.
The structural growth trends in our end markets, and the
self-help actions which are well underway give us confidence in our
journey to double-digit margins, supported by strong cash
generation and improving return on invested capital."
For further information please
contact:
TT Electronics plc Tel: +44 (0)1932 827 779
Richard Tyson, Chief Executive Officer
Mark Hoad, Chief Financial Officer
Julian Wais, Head of Investor Relations and Communications
MHP Tel: +44 (0)20 3128 8100
Tim Rowntree / Rachel Mann
(1)
Notes:
1. All figures in this trading update are unaudited. Audited
amounts will be included in our full year results announcement on
10 March 2021.
2. Organic growth is stated at constant currency and is
calculated by comparing current year actual results to prior year
results retranslated at current year actual exchange rates. Organic
revenue excludes the impact of acquisitions and disposals.
3. Adjusted to exclude the impacts of significant restructuring
programmes; significant one-off items including property disposals,
business acquisition and divestment related activity; and the
amortisation of intangible assets recognised on acquisition.
4. Analyst expectations for adjusted profit before tax are between GBP20.6m and GBP22.5m.
5. Net debt excluding IFRS 16 leases divided by adjusted EBITDA,
allowing for the full year pro-forma effect of acquisitions and
disposals and excluding the impact of IFRS 16. Calculated at
average exchange rates. This measure is consistent with the basis
of calculation for bank covenant purposes.
About TT Electronics
TT Electronics is a global provider of engineered electronics
for performance critical applications.
The company operates in industries where there are structural
growth drivers, working with market-leading customers primarily in
the industrial, medical, aerospace and defence sectors. Products
designed and manufactured include sensors, power management devices
and connectivity solutions. TT has design and manufacturing
facilities in the UK, US, Sweden and Asia.
The company has three divisions. The Power and Connectivity
division designs and manufactures power application products and
connectivity devices which enable the capture and wireless transfer
of data. We collaborate with our customers to develop innovative
solutions to optimise their electronic systems. The Global
Manufacturing Solutions division provides manufacturing services
and engineering solutions for our product divisions and to
customers that often require a lower volume and higher mix of
different products. We manufacture complex integrated product
assemblies for our customers and provide engineering services
including designing testing solutions and value-engineering. The
Sensors and Specialist Components division works with customers to
develop standard and customised solutions including sensors and
power management devices. Our solutions improve the precision,
speed and reliability of critical aspects of our customers'
applications.
Cautionary statement
This update contains forward-looking statements. These have been
made by the directors in good faith based on the information
available to them up to the time of their approval of this update.
The directors can give no assurance that these expectations will
prove to have been correct. Due to the inherent uncertainties,
including both economic and business risk factors underlying such
forward-looking information, actual results may differ materially
from those expressed or implied by these forward-looking
statements. The directors undertake no obligation to update any
forward-looking statements whether as a result of new inf ormation,
future events or otherwise.
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