TT Electronics sales hit by 'difficult market'

22nd Aug 2012 07:43

Shares of electronic component and sensor technology firm TT Electronics plummeted on Wednesday after it revealed that first-half revenues slipped on the back of tough market conditions.The Surrey-based group, which supplies electronic components to manufacturers in the automotive, defence, aerospace and medical industries, saw revenue fall 3.8% to £271.2m from £281.8m the same time a year earlier "reflecting more difficult market conditions and the planned exit from certain lower margin projects."Last year's period also benefitted from a pull-forward of orders following the Japanese earthquake. Adjusted for a foreign exchange loss of 0.9%, the underlying decrease was 2.9%.Nevertheless, adjusted profits before taxation was unchanged at £13.3m in the period. Adjusted figures exclude exceptional items such as a £0.8m charge in 2012 and a £7.5m pensions credit last year. Headline earnings per share rose to 6.0p from 5.7p. On a reported basis (which includes these exceptionals), pre-tax profit dropped from £20.8m to £12.5m.Chief Executive Geraint Anderson commented: "Overall we are pleased with the resilience of the business in the current economic conditions. We have continued to make progress reducing our cost base with key projects delivered ahead of plan, and additional programmes now underway.""These activities, together with an improving product mix, will deliver further margin growth in a more challenging market environment in the second half. Our global strength has positioned us well with both emerging key accounts and traditional customers, and we have won several major new contracts," he added.TT Electronics underlined its confidence in future trading by boosting its dividend payment by a quarter. A dividend payment of 1.5p per share has been offered, up from 1.2p the year before. Net debt reduced to £7.3m from £24.2m a year earlier. CJ