4
March 2024
THIS ANNOUNCEMENT CONTAINS
INSIDE INFORMATION
TT Electronics
plc
Divestment of selected
business units
TT Electronics plc ("TT", "the
Group"), a global provider of engineered electronics for
performance critical applications, today announces it has reached
an agreement to sell three business units within the GMS and Power
and Connectivity divisions to the Cicor Group for a cash
consideration of £20.8 million on a cash and debt free
basis1, subject to normal completion account adjustments
(the "Transaction").
The divestment relates to business
units in Hartlepool and Cardiff, UK and Dongguan, China which
provide electronics manufacturing services ("EMS") and certain
connectivity products, principally to industrial clients (the
"Transaction Group").
Key highlights of the
Transaction:
·
Cash consideration of £20.8 million on a cash and debt free basis; subject to normal
completion account adjustments
·
Proceeds from the disposal will
reduce TT's existing debt
·
Expected operating margin enhancement of
c. 50-70 basis points
·
Simplified operational footprint for the
Group
The divestment reflects the Board's
continued efforts to improve the quality of earnings, strengthens
the balance sheet and will allow the Group to focus on growth
opportunities in its core businesses and end markets to deliver
value for all stakeholders.
The Transaction is expected to
complete by the end of Q1 2024 subject to the completion of certain
organisation restructuring steps.
The Cicor Group (SIX Swiss Exchange: CICN) is a global provider of electronic
solutions with approximately 2,700 employees.
Peter France, TT Chief Executive Officer
commented:
"We are
focused on being a more profitable and resilient business
underpinned by a strong balance sheet and operating in attractive
growth markets.
This simplification of our
portfolio will further improve our
financial profile and allows TT to focus on
delivering value to our stakeholders by focusing on our core growth
markets, strengthening the balance sheet and driving margin
progression. Today's announcement demonstrates our disciplined
approach to our portfolio and provides a good home for our
colleagues transferring to Cicor.
I would like to thank the teams who
will transfer across to Cicor for their hard work and wish them
continued success."
Information on the
Transaction
Group
For the year ended 31 December 2022
the Transaction Group generated £72.5 million of revenue and a loss before tax
of £0.7 million2. As at 30 June 2023 the Gross Assets of
the Transaction Group were £85.4 million. Consequently, the
Transaction is expected to
result in a one-off held for sale write down expense for the Group
in its FY23 accounts of circa £32 million3.
For
further information please contact:
|
|
TT
Electronics plc
|
Tel: +44 (0)1932 827 779
|
Peter France, Chief Executive
Officer
Mark Hoad, Chief Financial
Officer
Kate Moy, Head of Investor Relations
and Communications
|
|
|
MHP
|
Tel: +44 (0)20 3128 8100
|
Tim Rowntree / Ollie
Hoare
|
Notes:
1. Proceeds net of transaction costs are expected to be circa
£17.8 million
2. Including an allocation of Group and central costs, the
Transaction Group generated a loss before tax of £2.1
million
3. Subject to completion of audit
4. TT will announce its full year results on 7 March
2024
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,
North America 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
information, future events or
otherwise.