TT Electronics downgrades full-year outlook, shares tumble
TT Electronics tumbled on Monday as it downgraded its full-year outlook, citing "operational efficiency issues" in two North American sites.
Electronic & Electrical Equipment
9,967.33
17:09 18/09/24
FTSE All-Share
4,511.60
16:59 18/09/24
FTSE Small Cap
6,877.86
17:09 18/09/24
TT Electronics
89.80p
16:40 18/09/24
The engineer and manufacturer of electronic solutions for critical applications also said recent order intake in its North American components business has been for delivery through 2025, not in 2024 as had been expected.
As a result, second-half revenue is now expected to be around £15m to £20m lower than previously anticipated.
This, along with higher production costs, will impact the North American operating profit by £13m to £18m. Group adjusted operating profit for FY 2024 is now expected to be between £37m and £42m, it said.
TT said "clear plans" have been put in place to rectify the issues during the remainder of the year and potentially into the first quarter of next year. These include root cause corrective actions, improved factory planning and factory layout, although these measures are not expected to sufficiently mitigate the impact in FY24.
"Furthermore, over the course of August and so far in September whilst overall order intake has continued to be positive, the order intake for execution in 2024 in our higher margin components business has been materially weaker than anticipated with the orders received in Q3 more weighted for delivery in 2025, and recovery is slow and steady," it said.
At 0920 BST, the shares were down 22% at 96.28p.