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I tunned in to the webcast and got a bit of extra flavour. 2023 was an inflection year with strong cash conversion (92%) which has reduced gearing to 1.7x and, when the proceeds of the sale to Circo Group come in, it falls to 1.5x with further progress to the bottom end of the target range of 1 - 2x by the end of the 2024. The write down on this sale of £32.5m was taken in 2023 resulting in negative statutory accounts again. The loss on the HVAC breakdown was C£3.0m compared with £2.0m previously estimated and, hopefully, will not be repeated this year. Looking forward they are confident of making a 10% margin this year, all be it on near flat sales, so we should see some eps growth by the end of the year. Mark Hoad did much of the talking. Peter France, as he said himself had not given this type of plc presentation for some years and confined himself to good sounding generalities, in my view. He will reveal more at the open market day (April 9th) and has ideas for changing the management structure. The company is in good shape and I came away with the impression that they will get the business in a strong, low leveraged position by the end of this year. Do they then want someone to buy the whole business? I suspect so and we will see an honourable end for this little company with the shareholders making a decent return.
Yes, looks good all round. I will come back after the presentation if there is anything worth saying.
Look really strong across the board, really bullish future guidance, above pre Covid levels, nice divi increase. This should bounce well this morning after sliding on no news for months
The disposals look sensible although the share price continues to disappoint. Maybe the results tomorrow will prompt a rally - see that cityconfidential have suggested a buy ahead of the results
What was so bad about the Stadium deal?
"[Stadium] pumped around £2m into its Hartlepool site over the last two years to create what officials describe as a European manufacturing centre of excellence." 16 Feb 2018
https://www.thenorthernecho.co.uk/business/15996227.tt-electronics-makes-move-hartlepool-based-stadium-group/
As a Stadium holder the takeover made me money, but the SP did take a tactical dive just before the deal so I could have made quite a bit more. TT Electronics has not made me any money!
TTG received a positive write up on Stockopedia this morning and a Green rating and the SP had a nice tick up today. Maybe the market has woken up to TTG.
Certainly was excellent news. The Hartlepool and DG sites are the leftovers of the disastrous Stadium purchase which left TT with these poorly invested factories. Cardiff had big issues too. A good move for cash and means the remaining business is all Swiss-watch like and well invested and profitable/highly profitable.
This morning looked like more good news to me. Presumably that money will go towards improving net debt without sacrificing any material profits.
Market doesn’t agree. Hopefully that’ll change.
My advice is to hang on. It's always tempting to sell when it's like this, but I can't see any logic to sell based on what we know.
British stocks tend to be massively undervalued right now and ripe for takeover, especially those with technological assets.
Of course if you are like a certain ex-president you might need the money in a hurry, but otherwise..
Lol
Well I've hit my stop so out now. Daft just watching it fall every day. Felt it will probably drop more on results.
Just added more. Short term anything can happen, so advantage of it if you have spare cash.
I'm in no rush to make money with this one.
Not looking good for either of us. Relentless selling. Seems that someone knows something....
Bought a small amount today. got them at 152. Looking at the NT site he paid 157.
Https://www.adsadvance.co.uk/tt-electronics-to-provide-challenger-3-cable-assemblies.html
Well done Wildtiger looks like you have saved yourself nearly 50p on the downside. I'm still holding TTG and looking for growth in PTP when the results for 2023 are published on 7th March but am a bit concerned that the new CEO (Peter France) will want to throw in all the provisions possible so that growth in 2024 looks good. (I have been around long enough to see several incoming CEOs do this in small quoted stocks.) That said, I expect even further PTP gains in 2024 although this early on in the year much could go wrong. My estimate of fair value for TT is 205p but I expect it to continue to trade below fair value; I just hope the discount will reduce. I think you will make money Wildtiger but I have a vested interest !
Sold this at 195p last year. The UK Army will need many more tanks for the pre-war phrase and TTG plays an important role in that
Since my previous post I have bought a couple of slices and reduced my average very nicely.
I am not entirely pessimistic about this stock but I have sold roughly half my holding in the last few weeks. I have also taken what profits I can from other stocks and hold a lot more cash than usual. Unfortunately I can't see anywhere to invest it with things as they are.
I agree with your comments MP, tone definitely deteriorated since last update as is shown by the revenue decline in H2 to date. I sold up this morning for 14% loss. Not that cheap and quite risky given debt IMO
The tone is very different from the upbeat statement when the half year figures were announced (3rd August). The machinery breakdown at Sensors and Specialist Components was mentioned but the actual words were:- "Organic revenue was 11 per cent higher even with some output shifting from the first half into the second half, due to a machinery breakdown in June" I was not expecting the breakdown to be "impacting profit in Q3 by circa £2m" and would have thought an announcement should have been made earlier, given we are in late November now, last year's trading update was a week earlier. (AllAtSea, I didn't see the £3m hit you mentioned.)
The shares appear cheap even with profits at the lower end of expectations but the company is just too small to be reliable. One machine breakdown costing £2m is a big hit for for a company only making circa £44m a year, volatile profits can't be put on the same rating as reliable profits so the shares will remain "cheap". Glad to see that they are "on track to deliver much improved cash generation over last year" That was my previous concern now I have to worry about machine reliability!
"We are mindful of the wider macroeconomic backdrop, but see continued positive momentum in the business, with a robust order book providing good visibility of revenues for 2024.
Peter France, TT Chief Executive Officer commented:
"Having joined in October, I have now visited the majority of our sites, spent time with colleagues and met a number of our customers and other stakeholders. I have been greatly impressed by the quality of our people, the strength of our culture and the depth of our customer relationships.
I am excited about the potential for TT and can already see opportunities to unlock further value across the business, driving growth, efficiencies and performance through capitalising on our positions in the structural growth markets in which we operate. I look forward to sharing more detailed thoughts shortly after our FY23 results, as we plan the next phase of our disciplined growth strategy.
The business continues to show good year over year improvement and I look forward with confidence."
https://www.londonstockexchange.com/news-article/TTG/trading-update/16219439
"Though reassuring of strong organic revenue growth in the year so far to October, TT said a machinery breakdown at one of its sensors and specialist components facilities hit third-quarter profits by £3 million.
“As a result of the machinery breakdown [...] we now expect to report group adjusted profit before tax towards the lower end of current market expectations,” the company added in a statement."
https://www.proactiveinvestors.co.uk/companies/news/1033934/tt-electronics-slumps-on-machinery-breakdown-profit-hit-1033934.html
We are due a trading update on TTG. This time last year they gave an update on the progress for the period to end October 2022. With only a couple of months to go to the end of 2023 they should have a fairly clear idea about the full year's profits and other metrics, particularly cash flow. Silence would IMHO be ominous.
This article would be more helpful .
https://ascoworld.com/news/financial-results-2022
Extracts
"ASCO has reported a 52 percent increase in turnover in a strong year for the Aberdeen-headquartered business, which saw it win new clients, grow its range of services and sectoral support, and expand into new geographies.
Accounts lodged for the year ending 31 December 2022 show that the company, a leading global provider of logistics and materials management services, saw group sales rise to £637.9 million, up from £419.4 million the previous year."