TT Electronics plc (LON:TTG), a global provider of engineered electronics for performance critical applications, has published the following trading update on the Group’s performance in the four-month period ended 29 October 2022.
Strong demand continues
The continued strength in our focus end markets, together with our customer positioning, is reflected in the Group’s year-to-date organic1 constant currency revenue growth of 18 per cent. Revenue growth has accelerated in the four months to October as expected, with strong volume growth augmented by pricing and material pass through costs.
Our order intake continues to run ahead of our accelerating revenue growth, with book to bill of 106% in the four months to October. Overall, for the year to date, our book to bill is 127%. The order book remains well above historic levels across the business and provides excellent visibility for 2023.
Execution
Global supply chain constraints persist alongside continued inflation pressure from wages, material costs and energy. Prices are under continuous review to recover these costs; the ongoing nature of inflation dynamics will mean some lag in recovery.
Balance sheet
The Group remains on track to deliver improved cash generation and a year-end leverage position within our target 1-2x net debt to adjusted EBITDA range.
Outlook
Despite the challenging backdrop, given the strong performance of the Group, we expect to report adjusted profit before tax in line with the Board’s expectations for the full year, with benefits of foreign exchange offsetting the headwinds from increased interest costs.
Richard Tyson, TT Chief Executive Officer commented:
“Momentum across the Group continues to be strong reflecting our successful positioning in structural growth markets. The team is executing well against the ongoing challenging backdrop, and we continue to expect to deliver margin improvement in the second half.
While mindful of the wider macroeconomic backdrop, the continued growth in order book extends our visibility of revenues for 2023.”
Notes:
1. Organic growth is stated at constant currency and is calculated by comparing current year actual results to prior year results retranslated at current year actual exchange rates. Organic revenue excludes the impact of acquisitions and disposals.
2. Analyst consensus expectations for 2022 adjusted profit before tax are in a range of £35.4m to £39.8m.
3. TT will announce its full year results on 8 March 2023.
