StockMarketWire.com - TT Electronics reported 5% organic revenue growth from good sales performance and increased market demand in the year to 31 December.

STRATEGIC PROGRESS

- Portfolio transformation: disposal of Transportation division for £123.2m in October 2017

- Pivotal year for TT with strong revenue and profit growth

- Realising benefits of management actions started in 2015

- Increased customer focus: new customer wins and sales to existing customers

- New products launched: increased R&D investment underpinning future growth

- Continuing BE Lean activities: benefits to our operations and customer performance

- All three divisions delivered organic revenue growth

- Recommended cash offer for Stadium Group announced in February 2018

FINANCIAL HIGHLIGHTS

- Underlying operating profit up 12%, PBT up 28% at constant currency

- Underlying operating margins increased to 6.8%, up by 60 basis points

- Excellent underlying cash conversion at 98%

- 140 basis points increase in return on invested capital to 10.6%

2017 OVERVIEW

2017 was a pivotal year for TT. Following the disposal of the Transportation division, TT is becoming a higher margin, higher quality business with good cash conversion.

Business performance was excellent and we delivered organic growth from all three divisions.

Our strategy to focus on areas of the market where our industry expertise and R&D investment create strong and differentiated capabilities is delivering results, driving growth and margin improvement.

Group revenue for 2017 was £360m (2016: £332.7m) an increase of 8 per cent and 5% excluding the £9.3m benefit from foreign exchange.

Our strong sales performance and improved market demand have contributed to good growth this year. The focus on operational excellence has enabled us to increase capacity and maintain lead times resulting in market share gains in our current sensing, circuit protection and signal conditioning product lines.

The group's order book has improved compared to the same time last year in part because of customers placing orders further ahead than at this time last year.

Underlying operating profit increased by 18% to £24.3m (2016: £20.6m), and by 12% excluding a foreign exchange benefit of £1.1m. Statutory operating profit was £20m (£18.8m).

The improvement was driven by the Sensors and Specialist Components and Power Electronics divisions. Foreign exchange headwinds in the second half were offset by early delivery of efficiency savings post the disposal of the Transportation division.

Underlying operating profit margin for the Group has improved by 60 basis points to 6.8% (2016: 6.2%) and return on invested capital increased by 140 basis points to 10.6% (2016: 9.2%).

We delivered another year of excellent cash conversion of 98% (2016: 79%) and a free cash inflow of £4.7m (2016: £13.8m). Closing net funds at the end of the year were £47m (2016: net debt £55.4m).




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