TT Electronics’ order book at record levels (LON:TTG)

TT Electronics plc (LON:TTG) Chief Executive Officer Richard Tyson and Chief Financial Officer Mark Hoad caught up with DirectorsTalk for an exclusive interview to discuss the fantastic momentum across the business, how they expect margins to develop going forward and what the future looks like for the company.

Q1: This looks to be a fantastic momentum across the business, could you just tell us what’s driving it?

A1: We’re delighted with a really strong first half performance, as you know, where TT Electronics has positioned itself into structural growth markets that have moved back towards their long-term growth trajectory underpinned by the mega trends for sustainability and ESG drivers and the markets are coming back strongly.

We’ve got really good momentum across the whole business, on top of the market’s rebounding, we’re winning new customers, new multi-year contracts, and that in the first half has resulted in 12% organic growth.

Really the standout is the order intake performance on top of that intake has been incredibly strong, with a book to bill of 134%. Our order book is at record levels, giving us full visibility in 2021 to improve organic growth expectations for the year now. Also the order book building nicely for 2022 with again, visibility better than we’ve ever had before, supporting confidence in good growth for next year, too.

Q2: Mark, underlying margins look to be back to 2019 levels. Can you just give us some detail on what’s behind this and how you expect margins to develop going forward?

A2: We’re really pleased that run rate margins have got back to 8% so quickly and so we’re getting some really good operational leverage on the revenue growth that we’re delivering and we’ve got the self-help program where the benefits are coming through as expected and we’re on track to deliver the full benefits of the project. Not just that, we now know that we can deliver those benefits at a lower cost than we had originally planned.

Then there’s acquisitions, the total acquisition is performing really, really well and it’s already delivering mid-teen margins. Those run rate margins are after removing the start-up costs associated with the Virolens project but they’re a good proxy for the future performance of the business as those Virolens costs come down significantly in the second half of the year.

So, the growth in the order book that Richard just talked about, the self-help actions and the growth that’s coming through, give us improved visibility and confidence in our path to deliver double digit margins.

Q3: Just talking about confidence, you’re making good progress Richard, what does the future look like for TT Electronics?

A3: The future looks great. Mark touched a little bit on the help from acquisitions, we’re delighted with the performance of Torotel that came in only eight months ago and we’re on track to hit ROIC hurdles there with opportunity to go further.

Having upgraded our expectations at the AGM in May and, as we just talked about, the strength and momentum building as we enter the second half, order book already covering upgraded revenue expectations for the year.

The self-help programme is on track to be largely completed in the second half of the year and we expect to deliver that now at a lower cost and as a result, adjusted margins will improve in the second half and we expect to deliver overall improved full year results.

So, really the business is in great shape and we could not be more excited about the future we’ve got in front of us.

Click to view all articles for the EPIC:
Or click to view the full company profile:
Share on facebook
Share on twitter
Share on linkedin
TT Electronics

More articles like this

TT Electronics

TT Electronics: Attracting new customers

Recognised for its expertise in custom electromagnetics and electronics and electromechanical assembly, TT Electronics’ customers trust it to meet and exceed their demanding requirements The Barnstaple facility of the TT Electronics group (formerly Aero Stanrew) began operations as

TT Electronics

Temperature sensing instrumentation for glass manufacturing

A common measurement challenge for today’s glass manufacturers is the need for consistent, accurate temperature control. Glass furnaces operate over high temperatures ranging from +1100 °C to +1600 °C. Associated instrumentation must therefore offer necessary extreme survivability for

TT Electronics

TT Electronics to showcase at electronica 2022

TT Electronics, a global provider of engineered technologies for performance critical applications, will highlight its extensive portfolio of sensing technology and resistors products at electronica 2022 in Munich from 15-18 November.  TT will display its wide range of resistor

TT Electronics

​TT Electronics introduces new resistors

Aluminum Nitride (AIN) Ceramic Substrate With the ever-increasing density of electronic components on modern printed circuit boards (PCBs) and applied power, the temperature of individual components and entire devices inevitably starts to rise, so thermal management is becoming

TT Electronics

Electromagnetics in Surgical Navigation: Accurate Object Tracking

Electromagnetic (EM) tracking systems enable real-time motion tracking when clinicians have no line of sight during a patient’s procedure. However, while these systems have long played a role in treatment and diagnosis, many came into existence before the

TT Electronics

Next-gen optical encoders uniquely monitor health of their system environment

Industry 4.0 starts with smart factories utilising smart sensing technologies, where digitised intelligent platforms enable best-in-class manufacturing processes.  Data-driven manufacturing relies on smart sensors which enable manufacturing processes and predictive maintenance with minimal downtime, maximum efficiency and sustainable

TT Electronics

TT Electronics to showcase at MD&M Minneapolis

TT Electronics, a global provider of engineered technologies for performance critical applications, will be exhibiting at MD&M Minneapolis, booth 3701, November 2-3, 2022, at the Minneapolis Convention Center. In addition to TT Electronics’ core offerings in power, connectivity

TT Electronics

TT Electronics to exhibit at Hardware Pioneers Max

TT Electronics to exhibit our connectivity solutions, S2-Connect Family and back end portal & data. Hardware Pioneers Max is the annual gathering of product innovators in IoT and electronics. It is dedicated to all engineers, as well as

TT Electronics

TT Electronics OPB735 Series

TT Electronics plc (LON:TTG) is a provider of engineered electronics applications for performance-critical applications. The Company works with customers in the industrial, medical, aerospace and defence, and transportation sectors.

TT Electronics

TT Electronics to exhibit Medical Solutions

Minneapolis Convention Center Minneapolis, MN – 11/2/2022 9:00:00 AM Medtech moves fast… especially in a healthcare hub like Minnesota. Keep the pace with the latest innovations and immerse yourself in a community of visionaries and industry leaders. Our

TT Electronics

Manufacturing traceability in healthcare

For any manufacturer involved within the healthcare sector, traceability is a critical requirement.  Traceability enables you to see the movement of medical devices and parts across the supply chain. You can trace the history of the transfers and

No more posts to show