Member Info for Adastra

TT Electronics is thrilled to announce our collaboration with Cardinal Health, a leader in global healthcare services and products, to launch a groundbreaking neonatal care device. Through TT’s New Product Introduction Center of Excellence (COE) in Cleveland, Ohio, we worked together to accelerate the NPI and prototyping process, facilitating a speedy transition to volume production.

This week at MD&M West, we are privileged to showcase the Cardinal Health™ Kangaroo NTrainer™ System 2.0 on our booth. This advanced device represents the next step in neonatal care, enabling clinicians to provide immediate assessment and therapeutic interventions. This helps prematurely born infants develop essential oral coordination skills more quickly, encouraging faster progress to independent feeding and potentially reducing the duration of their NICU stays.

Thank you to the team at Cardinal Health for trusting in TT to transform your innovative ideas into reality!

Learn more about our NPI Center of Excellence here: https://hubs.li/Q035tBK70

#ContractManufacturing #NPI #HealthcareInnovation

This has now bounced off 87 too many times so here goes for my two pennyworth why I'm bought in here..

TT Electronics strategic initiatives and financial performance underscore its potential for growth and value creation.

In the year ending December 31, 2023, TT reported an adjusted operating profit growth of 16%, with the adjusted group operating margin increasing by 110 basis points to 8.6%. Notably, free cash flow reached £23.9 million, achieving a cash conversion rate of 92%, and leverage was reduced to 1.7x. The company has implemented significant cost-saving measures, including the completion of Project Albert and the initiation of Project Dynamo, aimed at achieving a 10% operating margin target for the year. These initiatives are expected to enhance profitability and operational efficiency.

TT Electronics operates in high-growth markets such as aerospace, defense, and healthcare, providing innovative solutions that address complex electronic challenges. The company's focus on delivering cleaner, smarter, and healthier products aligns with global sustainability trends, positioning it favorably for future growth.

Analysts have expressed optimism about TT's prospects, with a consensus rating of Outperform and an average target price of 143 pence, suggesting a potential upside of approximately 60% from current levels.

Furthermore, an intrinsic valuation analysis indicates a base case value of 400 pence per share, significantly higher than the current market price, highlighting the stock's potential undervaluation.

In November 2024, TT Electronics received a takeover proposal from Volex, valuing the company at £249 million. The offer, which included a 76.7% premium per share, was rejected by TT's board, indicating confidence in the company's standalone prospects and intrinsic value.

Conclusion

TT Electronics plc's robust financial performance, strategic initiatives, and strong market positioning make it an attractive investment opportunity. The company's commitment to innovation and sustainability, coupled with favorable analyst assessments and recent acquisition interest, underscore its potential for significant value appreciation.

So how does this play out......scenario?

March results

A) Europe and RoW decent profits increase. US operations stable and improving in Q1 with adjustments. Shareprice rises to reflect true valu.

B) Europe and RoW decent profits increase. US operations still problematic but resolution in sight. Instos not satisfied. Suitor(s) who hade been either in discussions or circling now pounce using insto support. Price jumps. Volex decides whether to reenter as it can do in this scenario.

Take your pick.....it's all supposition.

The BoD will be in an untenable position. They have openly stated that they value the company in excess of the undisclosed initial suitor bid of 160p. They refused to engage with Volex despite bids of 125p and 139p equivalent. Their whole justification was that Europe and RoW was doing well and that action was progressing on two US facilities which were underperforming.. If there is no evidence of resolution there, then the institutional holders (collectively 50%+), having already been aggrieved at failure to disclose the 160p bid, will certainly make a move. I am pretty sure that other suitors are involved in discussions during the current closed period which restricts newsflow but certainly expect shareholding positions to be taken as March 5th approaches. The company is ripe for a US suitor, bigger UK player or indeed PE looking at exposure to growth sectors, intrinsic value and contracts. Just a case of watch this space and take advantage of low MCap imo.

TT Electronics (TTG.L) has now entered its closed period ahead of its final results on March 5th.

This also suggests that any potential corporate developments, including M&A activity, would likely surface after results unless already in an advanced stage. The pressure on the BoD is now immense to either have sorted the two US operations or capitulate to either Insto directions or suitor (which may also be happening now).

TT Electronics will be exhibiting at MD&M West, booth 2220 and 2222, February 4 to 6, 2025, at the Anaheim Convention Center.

Electronic Solutions that Enable MedTech

TT Electronics will showcase its engineered capabilities that enable the future of healthcare

Implantable Electromagnetic Tracking Sensors – inc. our latest Air Coil Sensor technology.

Exclusive Demonstrations of the innovative Radwave EM Tracking Platform.

Customised Optoelectronics.

Medical Power Supplies to the latest regulatory standards.

Contract Manufacturing including PCB assembly and high-level-integration for medical devices.

The graph looks good for an upward push. BoD are under the microscope to resolve US issues despite wider market growth or engage with bigger suitor (assuming they are not already so doing). The clock is ticking as the discrepancy between MCap and contracts value continues. The only way is up imo.

TT Electronics would be great acquisition here as economies of scale and integration would bring immediate benefits to both.

All the indicators see aligned for a significant rise here despite today's Trump-led market pull back. Should see rapid reversal after initial dip.

Great opportunity to load up as Trumps general market comments cause temporary sympathy dip here.

Behind the scenes drivers??

Rescinded Volex bid @ 135p due to BoD failing to engage stating realistic value much higher.

BoD had already rejected 3rd party 160p offer.

Must have provoked big comments by instos who hold over 50% collectively.

Huge pressure now on BoD to perform.

Series of big uncrossing buys recently.

Excellent contract and asset backing

Multiple big suitors must be eying up TT with global presence in growing industries.

We've spent the last two weeks in an exceedingly narrow 3p trading range. Given all that must be going on behind the scenes a gap jump must be pretty close.

From the November t/u

the Board expects FY24 adjusted operating profit to be at the lower end of our previously stated range of £37m-42m. FY24 leverage guidance is unchanged and is expected to be around or marginally above the top end of our stated target range of 1-2x.

For the 10 months to the end of October order intake is 10 per cent higher than in the prior year, with all regions higher despite the continued weakness in component orders from the distribution channels.

From the post Volex bid statement (Dec)

The Board continues to have confidence in the Company's medium-term financial framework, including a 12% operating margin by 2026, which assumes a reasonable recovery in the components market and is underpinned by the good momentum in our European and Asian businesses, alongside the impact of Project Dynamo. The outlook for the Company for the year ending 31 December 2024 is unchanged

Every day this week has seen sizeable uncrossing purchases that 'should' have mopped up a lot of stale and discontent holders. The shareprice will son start to reflect the scarcity of tradable volume and move northwards.

The absence of recent director purchases could be attributed to several factors. Given the recent takeover proposals and potential ongoing discussions, directors may possess material non-public information, which would restrict them from trading shares under insider trading regulations. Additionally, companies often impose trading blackout periods around significant corporate events, further limiting directors' ability to buy or sell shares.

And here comes the cavalry......

Can't wait to say....'I told you so'....when the £1.50 comes in.

One way or another intrinsic value will win here. Then there will be a substantial gap-jump to reality.

There has to be some negotiation going on behind the scenes here imo. It's just too quiet given the previous hustle around the Volex bid. Has the initial bidder quietly reentered preliminary discussion prior to concrete RNS? Has a US player approached the BoD to feel out the ground now everything has died down? I really can't think of why the BoD, having rejected 3 bids as 'undervaluing TT' would not now be loading up on shares UNLESS precluded by the insider knowledge scenario. Yes we expect some US write downs but nowhere near enough to make this other than a golden opportunity price for the p/f.

EEnergy and TTG are both way undervalued at present.