TT Electronics (LSE:TTG) told investors that it now expects full-year adjusted operating profit to come in ahead of current market expectations, having delivered a sharp improvement in first-half profitability.
"TT is a stronger and more resilient business than it was twelve months ago," said chief executive Eric Lakin, adding that order momentum gives the board confidence in a return to revenue growth in the second half.
The electronics manufacturer, which serves aerospace, defence and industrial customers, reported adjusted operating profit of £18.5 million for the six months to 30 June, up 37% on an organic basis from £13.5 million a year earlier. Adjusted operating margin expanded 230 basis points to 8.1%, driven by the completed turnaround at its Cleveland facility and a return to profitability at the Components division following the closure of its loss-making Plano site.
Revenue fell 2.7% organically to £228.1 million from £234.5 million, though it rose 4% excluding the Plano closure and a customer production transfer from TT Suzhou to TT Kuantan. Statutory operating profit reached £9.7 million, reversing a £3.0 million loss in the prior-year period, after £8.8 million of mostly non-cash adjusting items.
Net debt excluding lease liabilities stood at £52.0 million, down from £73.3 million a year earlier, with leverage steady at 1.1 times.
Order intake produced a book-to-bill ratio of 112%, with new contracts including a Letter of Intent from MBDA and continued work with Rolls-Royce.
The company is also evaluating a potential divestment of its Components business after receiving "encouraging indications of interest," though any deal remains subject to value.
Full-year cash conversion is expected in the range of 70% to 80%, supporting further deleveraging.
