Last checked at 17 Nov 2015 07:00
17 November 2015
TT Electronics plc
Trading Update
TT Electronics ("TT" or the "Group"), a global provider of engineered electronics for performance critical applications, is today publishing its trading update for the period to the end of October 2015.
Current Trading and Strategic Progress
Overall the Group's performance remains in line with our expectations. For the year to date, revenues have declined by 3% on an organic1 basis, of which 2% is accounted for by the large non-recurring orders in Industrial Sensing and Control and Advanced Components delivered in 2014.
General industrial markets have, however, been somewhat weaker during the third quarter. Whilst the majority of our business continues to perform as expected, there has been some impact on our shorter cycle businesses, notably the Advanced Components division, and as a result the Group's order book is marginally lower than in the prior year.
We are successfully executing the new strategy with good progress on the Operational Improvement Plan ("OIP"), a number of new product launches and new contract wins.
Within our OIP we have now completed the transfer of ten lines, with nine of them customer qualified. Transfer and qualification of a further two lines is scheduled for the first half of 2016. The final four lines will remain in Germany, with the transfer of production to Romania now expected to be concluded by the end of the first half of 2016.
As a result, we now expect the costs of the programme to be around £25m, approximately £5m less than originally anticipated and there will be a modest reduction in project benefits. We intend to re-deploy this cash in further cost reduction measures in our shorter cycle industrial market facing businesses.
The above actions, together with the Group's enhanced focus on cash flow, mean that we now expect full year net debt to be in the region of £35m.
Summary and Outlook
Commenting on the trading statement, Richard Tyson, Chief Executive Officer said:
"Our focus on the strategic priorities has resulted in strong progress on new product introduction, new customer wins and in particular the Operational Improvement Plan and cash generation. The transfer of production from Germany to Romania is now expected to be completed a year earlier than anticipated, and we are developing plans to deploy the cash saved in further cost reduction measures.
General industrial markets have become weaker in recent months, and we therefore remain cautious about market conditions. Whilst there has been some softening in our shorter cycle businesses, notably in Advanced Components, this is being offset by earlier realisation of benefits from the Operational Improvement Plan and our outlook for the full year is unchanged."
For further information please contact: | |
TT Electronics plc | Tel: 01932 825300 |
Richard Tyson, Chief Executive Officer Mark Hoad, Chief Financial Officer | |
MHP | Tel: 020 3128 8100 |
Tim Rowntree / John Olsen / Jamie Ricketts | |
Notes:
(1) Excluding the impact of exchange rates, acquisitions and disposals | |
Cautionary statement
This trading 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.