CT Automotive achieve revenues ahead of expectations

CT Automotive plc (LON:CTA), a leading designer, developer and supplier of interior components to the global automotive industry, has announced its results for the half year ended 30 June 2022.

Financial Highlights

 H1 22H2 21H1 21
 $m$m$m
Revenue57.258.374.7
Gross profit10.69.519.5
Adjusted EBITDA*(4.3)0.58.8
Adjusted EBIT*(7.3)(2.0)3.2
(Loss)/profit after taxation(7.7)(8.4)2.1
Earnings per share(15.2)c(39.7)c10.5c
Net debt20.29.556.6

* Adjusted for non-recurring items

Due to the semi-conductor shortage, 2021 was a year of two halves with strong revenue in H1 followed by a slowdown in H2. The shortage continued into 2022 and therefore 2022 was expected to be a mirror image with a suppressed H1 followed by a strong recovery in H2. We have therefore used H2 2021 as our most meaningful comparative.

·     Group revenue was ahead of original expectations and broadly flat compared to H2 21:

o  Production revenue was up 19.3% to $55.3m (H2 21: $46.4m)

o  Tooling revenue was only $1.9m which reflected timing of revenue recognition of certain projects which are still expected to be completed before year end

·     Investment made in working capital to support future growth and in initiatives to unlock long term cash savings

·     Latest customer schedules indicate a recovery of volumes in H2 2022 could be ahead of the Board’s original expectations by the end of the year

Operational highlights

·     Cost saving activities implemented within the period will see benefits start to be realised in H2 22

·     Lockdowns in China and the Ukraine conflict have caused disruption to production in H1

·     Inflationary pressures continue but customer pricing mechanisms are providing mitigation through selling price rises

·     New Supply Chain Director delivering savings and subsequently promoted to COO

·     New customer wins including electric vehicle makers Rivian and e.GO

·     New manufacturing plant in Mexico on track to supply customers in Q3

Current trading and outlook

·     Both customer schedules and external forecast data continue to support the expectation that automotive volumes will recover through late 2022 and supply chain issues will fully resolve in 2023

·     Semi-conductor shortages are no longer the key restricting factor with restrictions now coming from the recovery of the wider supply chain which is ongoing

·     Cost saving and efficiency focus following the IPO will enhance future margins

·     There is no change to the Board’s expectations for FY22

Scott McKenzie, Chief Executive Officer of CT Automotive, commented:

“We were pleased to achieve revenues ahead of our expectations in the first half and have made good progress with our growth initiatives, including new customer wins, expansion of our manufacturing facilities and improved efficiencies to drive margin expansion.

Looking ahead, there are positive signs that OEM supply chain issues are starting to be resolved and schedules are strengthening. Despite the continued market and macroeconomic uncertainty, the Board remains confident of achieving its expectations for the year and delivering significant growth over the coming years.”

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