TT Electronics revenue and adjusted run-rate margin back to pre-COVID-19 levels

TT Electronics plc (LON:TTG) has announced its results for the year ended 31 December 2021.

Financial Highlights  

·    Revenue and adjusted run-rate margin back to pre-COVID-19 levels

o  Full year revenue up 14% year-on-year at constant currency

o  Organic revenue growth of 10%

o  Adjusted operating margin up 90bps to 7.3%, run rate of 8.1% excluding Virolens costs

·    Adjusted operating profit up 31% reflecting benefits of growth and self-help actions

·    Statutory operating profit increased to £19.3m, statutory basic EPS of 7.3p

·    Balance sheet strength maintained while investing to support future growth, margin enhancement and to manage supply chain constraints

·    Record order book into 2022 with increased visibility into H2 (2021 book to bill of 137%), including GMS fully booked

·    Total dividend increase of 19% to 5.6p, reflecting strong performance and positive outlook

Operational Highlights

·    Pricing and operational improvements, including self-help programme, offsetting cost headwinds

·    New commitment to deliver a 50% reduction in Scope 1&2 emissions by end of 20232, Net Zero Scope 1&2 by 2035. 25% tCO2e reduction over last year

·    Strong levels of employee engagement evidenced by results of our most recent survey3

·    Torotel integrated ahead of plan and pipeline building

·    Margin enhancing Ferranti acquisition in January 2022 expands technical capabilities

Richard Tyson, TT Electronics Chief Executive Officer, commented:

“I’m really pleased with our strong organic growth in 2021, with revenue and adjusted run rate margins back to pre-pandemic levels. Significant increases in profits and EPS reflect the benefits of this growth, combined with our self-help initiatives, the successful integration of Torotel and excellent execution by the team.  Our strategy is delivering, and we continue to invest for our future.

We continue to enhance the quality of our businesses and are making tangible progress towards double-digit adjusted operating margins. We have started 2022 with a record order book, which gives us the confidence and the visibility to achieve our growth plans for the year whilst continuing to manage the ongoing cost and supply chain challenges in partnership with our customers.

As a result, we are confident that TT’s momentum will continue, with the outlook for financial performance in 2022 in line with management expectations, although we are mindful of increased geopolitical uncertainty. With good customer wins, strength in our target markets, and the commercial aerospace recovery still to come, we believe the Group is in a strong position for the future.”


1.   Throughout this announcement we refer to a number of alternative performance measures which provide additional useful information.  The Directors have adopted these measures to provide additional information on the underlying trends, performance and position of the Group with further details set out on pages 17 to 19.  The adjusted measures used are set out in the ‘Reconciliation of KPIs and non IFRS measures’ section on pages 40 to 48.

2.   Against our 2019 baseline. We have improved the precision of our 2019-2021 Scope 1&2 carbon emissions data by using regional emissions factors rather than an emissions factor for the UK. This has led to a change in the data disclosed in 2019 and 2020.

3.   Best Companies Ltd survey in which we maintained our excellent 2* rating



We delivered a strong trading performance in 2021 with very good revenue and profit growth and as expected, a meaningful step forward towards double-digit adjusted margins. The growth in revenue and the strong order intake across all divisions reflect our strong customer relationships, momentum in our pipeline and the positive structural trends evident in our end markets. This performance has been delivered despite further COVID-19 disruption and significant supply chain and cost headwinds, and is thanks to our teams who have worked tirelessly throughout. We are proud and appreciative of their support and engagement.

Alongside a strong trading performance, particularly in our Sensors and Specialist Components and Global Manufacturing Solutions businesses, we have continued to execute our strategy and invest for future growth. During the year we have invested £11.4 million in research and development (R&D), continuing to develop and enhance our pipeline of new products.  

We have also completed, ahead of plan, the integration of the Torotel acquisition. Torotel and Covina, have significantly advanced our power electronics capabilities and market reach in the US and the resulting increase in new customer opportunities is a direct result of our strategic approach to M&A. We now expect to deliver £13-14 million of full run-rate benefits in 2023 from our investment in the self-help programme which contributed £6 million benefits in 2021, in addition to the £2 million delivered in 2020. We are pleased with the progress made so far to deliver this significant programme, which is an important component of our path to double-digit operating margins. 

Environmental, social and governance (ESG) matters are central to our purpose and deeply embedded in our business model and strategy. We have made further excellent progress in 2021 to reduce our Scope 1 and Scope 2 carbon emissions. These have decreased by 25 per cent to 15,740 tonnes CO2e down from 20,875 tonnes CO2e in 2020 and down 41 per cent from 26,657 tonnes CO2e in 2019. This improvement has been achieved due to our energy efficiency actions and further switching to the use of electricity from renewable sources.

We continue to prioritise the protection and safety of our employees, our customers, our suppliers and our wider communities. We have greatly appreciated how our employees have responded to another year of challenges. Their skill, dedication and hard work, which they have constantly demonstrated in uniquely difficult conditions, have resulted in them going above-and-beyond to get things done well and on-time. We were delighted to once again record a very high employee engagement score during the year, which was achieved despite the continuing challenging working environment. We encourage our teams to take an active role in their local communities, whether fundraising and volunteering for chosen charities or committing time and resources to promoting STEM education and careers.

Results and operations

Group revenue for the year at £476.2 million was 14 per cent higher than the prior year at constant currency and 10 per cent higher on an organic[1] basis. There was a strong improvement in our financial performance with adjusted operating profit up by 31 per cent compared to 2020, reflecting the benefits of growth and our self-help programme.

In common with the broader industry, we have experienced supply chain challenges with extended lead times, component shortages and notable cost inflation. These have been largely mitigated through price increases, although there can be a lag effect. During the year, we adapted software tools and data analytics to enhance visibility of parts availability and sourcing in certain areas, helping to mitigate the impact of cost increases and lead-time extensions for our customers.  We expect these cost headwinds and supply chain challenges to continue through 2022 but are confident of our ability to manage these, in partnership with our customers, and deliver on our growth plans.

There has been exceptionally strong order intake across the Group, reflecting underlying strength in our markets and new customer wins, as well as customers committing earlier to secure capacity.  Order intake for 2021 was 137 per cent of revenue. The order book at the end of February 2022 is at record levels.

Adjusted operating profit was £34.8 million, 31 per cent higher than the prior year at constant currency.  The adjusted operating margin was 7.3 per cent and, excluding the start-up costs related to Virolens, the adjusted run rate margin was 8.1 per cent. After the impact of adjusting items, including restructuring and acquisition and disposal costs, the Group’s full year statutory operating profit was £19.3 million.

During the year we invested in our self-help programme to support margin improvement, and in inventory to support our high levels of growth, our increased customer order book and supply chain constraints on certain component parts. Cash conversion of 65 per cent (2020: 130 per cent) reflected this investment and included a working capital outflow totalling £14.7 million. This investment was partially offset by realising £9.1 million of proceeds from property disposals.  On a statutory basis, cash flow from operating activity was £14.3 million (2020: £28.2 million). There was a free cash outflow of £1.3 million (2020: £14.4 million inflow). Dividend payments totalled £11.4 million (2020: £ nil).

We ended the year with net debt of £102.5 million (2020: £83.9 million), including IFRS 16 lease liabilities of £22.6 million (2020: £15.9 million).  We have a strong balance sheet, and this includes a defined benefit pension scheme fully funded on an actuarial and self-sufficiency basis.  At 31 December 2021 leverage was 1.7 times (2020: 1.6 times), within the Board’s target leverage range of 1-2 times.

Our return on invested capital improved to 9.1 per cent in 2021, increasing by 140 basis points due to the growth in adjusted operating profit.


Given our strong trading performance in 2021 and the positive outlook for 2022 and beyond, the Board is proposing a final dividend of 3.8 pence per share. The total cash cost of this dividend will be approximately £6.7 million. This, when combined with the interim dividend of 1.8 pence per share gives an increased total dividend of 5.6 pence (2020: 4.7 pence per share).  Payment of the dividend will be made on 20 May 2022, to shareholders on the register at 29 April 2022.

Our strategy

We solve technology challenges for a sustainable world, creating solutions that enable our customers to make products that are cleaner, smarter and healthier and that will benefit our planet and people for future generations. We create value through supplying products and services that meet our customers’ sustainability ambitions in our target markets of healthcare, aerospace & defence and automation & electrification. 

We have transformed the Group over the past seven years, aligning our business to structurally growing, higher added value markets with long-term customer partnerships and substantially reducing our exposure to lower-growth, cyclical areas.  Our strategy is designed to leverage our assets to unlock TT’s potential, delivering our deeply embedded capabilities and differentiators to our customers. This is enabled by strong capital discipline, a focus on cash generation and careful use of the balance sheet to facilitate continued investment.  

Our markets

Healthcare (25 per cent of Group revenue)

In healthcare we provide design and manufacturing solutions for a range of diagnostic, surgical and direct patient care devices critical to the identification, treatment and prevention of disease. Growth is driven by a combination of ageing populations, growing patient expectations and innovative solutions. We have steadily increased our exposure to this attractive end market from 13 per cent of Group revenue in 2015. Our focus areas include life sciences and laboratory equipment, surgical devices, medical implants, and diagnostics and imaging equipment. By supporting our life sciences partners, we are collectively improving laboratory automation systems and enabling samples to be collected and analysed with minimal human intervention, the benefits of which are improved data reliability and accuracy, minimised wastage, and time-efficient procedures. Through developing smaller, lighter, more precise surgical devices, we are enabling reduced size of incisions, shortened recovery times, and improved overall patient outcomes. In addition, by improving the portability and ease of use of diagnostics, we are increasing the availability of medical imaging to point-of-care facilities. This promotes earlier detection and better monitoring, hence supporting measures taken to address the rising prevalence of cancer, cardiac, neurological, and musculoskeletal disorders.

COVID-19 has accelerated trends in the digital transformation and the automation/robotics of healthcare which can be served by TT specialisms including interventional healthcare devices, patient monitoring and laboratory equipment.

Pent-up demand, post the pandemic, for deferred elective surgery and for large installations for hospital or life science applications are expected to be supportive of market growth over the next few years. 

Aerospace and Defence (18 per cent of Group revenue)

In aerospace and defence we provide solutions for high-reliability applications across a broad range of platforms operating on land, air and sea. Growth is driven by increasing electrification of these platforms, which supports fuel efficiency and safety. Commercial aerospace demand has been stable in 2021 against levels experienced since Q2 2020, with continued lower passenger-driven demand due to COVID-19.  We anticipate a gradual recovery in aircraft production over several years, as long-term growth resumes. Fundamentally, the need for more efficient, safer, and environmentally friendly aircraft remains. This drives demand for increasingly advanced electronic systems and applications, complemented by demand from a growing, globalised middle-class population who exhibit greater propensity to travel.  

In defence, our central focus is on collaborating with our customers to reduce size, weight, power, and cost (SWaP-C), while simultaneously enhancing command, control, communications, computing, intelligence, surveillance, and reconnaissance (C4ISR) capabilities. We have been successful recently in providing more integrated, design-led solutions, demonstrating our ability to deliver SWaP-C improvements. A recent example is the delivery of a significant increase in the power density of DC-DC converters for a major defence prime. We expect this to drive favourable shifts in product mix moving forward.

Automation and Electrification (39 per cent of Group revenue)

In automation and electrification markets, we are continuing to invest in developing capabilities which exemplify our low-volume, high-mix approach to address the needs of sophisticated automation and connectivity applications. Customers rely on us to help solve their toughest automation and electrification challenges, increasing their efficiency and helping them bring smart, new products to the market. Growth is being driven by factors including demand for sustainable solutions to improve energy efficiency, the use of robotics to improve productivity and the increasing use of remote asset tracking.  Within electrification, our priority is in developing capabilities which will support increasing energy efficiency and connectivity. Core focus areas include complex systems integrations and AC and DC power conversion technologies. We are increasingly able to develop complete, high-value products and durable components featuring higher voltages. The positive long-term growth drivers in this market give us confidence that demand will increase for our power, sensing and connectivity solutions.

Creating value through technology investment

We prioritise organic investment in the business to maintain and drive differentiation in our markets and our offering to our customers. R&D is a key component of this, given its critical contribution to the ongoing health of the business, enabling us to stay ahead of customers’ needs and meet the challenges they set us. Our investment in R&D is focused on bringing higher growth, more sustainable products to market. These typically yield higher returns and development is often undertaken in partnership with our customers. Our investment strategy includes leveraging acquired complementary capabilities targeted through mergers and acquisitions (M&A). 

Our R&D cash investment in the year was £11.4 million (2020: £11.2 million), representing 4.5 per cent (2020: 4.8 percent) of the aggregate revenue of our product businesses.

We continue to bring a pipeline of exciting new products to market, including in areas where we have extended our technical capabilities through acquisition. Examples include:

·    Our Power and Connectivity business has been working on an Aerospace Technology Institute (ATI) funded project developing high power DC/DC power conversion for increased electrification of military aerospace, commercial aerospace and hybrid electric and fully electric aircraft.

·    We have also been investing in the surgical navigation and robotics market. This segment is experiencing sustained double-digit growth and is driven by several emerging clinical applications that provide the physician with exceptionally accurate catheter placement, often eliminating the need for harmful radiation. The miniaturised and highly accurate characteristics of our technologies enable access to parts of the anatomy that in the past were difficult to navigate including the lung, brain and heart. Additionally, new applications for improved navigation needs have emerged to diagnose breast cancer. 

·    We are currently investing in a combination of AC/DC and DC/DC power conversion technologies in direct response to demand from aerospace and defence customers, as well as ruggedised wire harness and magnetic capabilities. These investments build upon our existing capabilities and give us a wider platform to support major aerospace and defence customers, many of whom are requiring power solutions that feature higher voltages and/or efficiency improvements from legacy designs.

·    In the first half of 2021 the Virolens COVID-19 screening device achieved its first important regulatory milestone, gaining registration with the MHRA in Great Britain.

Creating value through margin enhancement

The pursuit of higher margins through our self-help programme and organic and inorganic growth remains core to the Group’s strategy. We have made tangible progress to delivering double-digit adjusted operating margins with further improvement expected in 2022 and beyond. The actions we have taken this year bring the business closer to realising this, with key contributions from:

·    Operational leverage from organic revenue growth;

·    Improved efficiencies and reductions in overheads through our self-help programme; and

·    Inorganic expansion developing technology offerings and market positions.

Our significant self-help programme, designed to reduce our footprint and fixed cost base, is nearing completion. The decision to relocate our Covina business to the Torotel site in Kansas will extend the programme timeline slightly, but also increase the benefits, some of which we will re-invest in R&D to further grow the business. The programme delivered £6 million of benefits in 2021, in addition to the £2 million delivered in 2020. With the addition of the Covina transfer to the programme, the previously guided full run-rate benefits of £11-12 million in 2023 are now expected to increase to £13-14 million in 2023.

The programme comprises a number of different activities. In 2021 we closed sites in Barbados, Carrollton and Corpus Christi, Texas transferring the activities from those sites to Bedlington, UK and Mexicali, Mexico and Plano, Texas. We have also made good progress in transferring manufacturing from Lutterworth, UK to Bedlington, UK. In June, we completed the sale of the freehold property of the Covina business as an extension of our self-help programme and agreed to lease the site back for a period of 12 months while we prepared for relocation. We have recently made the decision to integrate the Covina business into the Torotel site in Kansas City which will deliver a further £2 million of benefits. In addition, we have taken certain products end-of-life in 2021, as well as relocating the manufacture of other products within our existing footprint. This has enabled us to serve customers better, as well as achieve an improved level of profitability. 

The total cash spend for the self-help programme is now expected to be £18.8 million. £10.2 million was spent in 2021, comprising restructuring cash spend of £2.3 million (net of £9.1 million after costs from property disposals) and project capital expenditure of £7.9 million (2020 spend: £3.8 million, including £1.5 of restructuring cash spend and £2.3 million of capital expenditure).  

Our acquisitions contribute to higher Group margins. The acquisitions completed in 2020, Torotel, Inc and Covina, have operating margins above the TT Group average and we have reconfirmed our expectations for cost synergies. Furthermore, our recent acquisition of the Ferranti Power and Control business is expected to contribute mid-teens margins over time.

Creating value from mergers & acquisitions

M&A is an important part of our growth strategy as we look to add higher margin businesses which build scale and enhance our technology capabilities and market access, consolidating fragmented but valuable niche areas.

We create value by realising revenue synergies, including leveraging customer access, and by optimising operations and the supply chain. We invest in attractive, growing and higher margin segments that the Group knows well, and where we have competitive advantage.

The recent Ferranti Power and Control acquisition highlights this as we gained access to an IP-rich business with skilled employees and positions on long-term defence platforms.

The two power electronics businesses acquired in 2020, Covina, the California-based power supply business of Excelitas Technologies Corp. (completed January 2020) and Torotel, Inc (completed November 2020), based in Kansas have been very successful. Following the positive impact of Covina, the integration of Torotel’s systems and processes into TT’s Power and Connectivity division was completed ahead of schedule.  We utilised our well-defined business integration model, which integrates major business processes including operations, procurement, finance, legal, IT and human resources.  This was completed against a backdrop of COVID-related travel restrictions and other constraints.  We are proud of the team and our new Torotel colleagues for undertaking this complex task so quickly and in challenging conditions.

We are very pleased with the performance and potential of Torotel.  The acquisition has increased our scale and capabilities in the very large and attractive US defence market, and it has enhanced our US power electronics presence. We are realising the benefits from integrating the products across the Group and the cross-selling opportunities that are being generated with new tier one OEMs. Torotel is also benefiting from our investment and is able to partner more closely with clients and expand its product offering.

We have secured a number of new contract wins including an order for complex cable assemblies with a major US defence supplier that commenced in 2021 and a win in the radar electronics space that will start deliveries in 2022.

Our attention is now focused on creating value from improving operational performance, delivering further benefits from integrating the Covina business into the Torotel site and integrating Ferranti and the Torotel customer proposition more closely with our other businesses. This will focus on increased customer cross-selling, the integration of products from across the Group to provide higher-value customer offerings and leveraging our business development capabilities.

We are continuing to look for opportunities to extend TT’s technology capabilities and market reach and currently see a good pipeline.

Environmental, social and governance (ESG)

Not only do we develop, design, engineer and manufacture products that enable reduced environmental impacts for our customers, but we are also optimising our own operations to reduce our impact on the environment.  We seek to have a wider positive impact on society by understanding and prioritising employee needs, doing business responsibly and reaching out to our local communities. Our products address resource scarcity, improve energy efficiency, support renewables and drive productivity, connectivity and health. We are positioned to benefit from megatrends that are driving sustainable growth.

We remain at the forefront of delivering technologies that meet the ever-increasing demand for cleaner energy, smart monitoring systems and home automation. Our products can be found in a range of applications including:

·    Renewable energy generation and smart grid metering

·    Power management and energy control systems

·    Water and wastewater measurement and monitoring

We have set ourselves a target to be Net Zero by 2035 for our Scope 1 & 2 emissions and we are undertaking a range of actions to deliver like-for-like reductions in our annual emissions, in accordance with our carbon reduction roadmap developed during the year. In the near term, we are making a new commitment to deliver a 50 per cent reduction in Scope 1 & 2 carbon emissions by the end of 2022, against our 2019 baseline, and a 55 per cent reduction by the end of 2023.

In 2021 we have reduced our Scope 1 & 2 carbon emissions by 25 per cent over 2020 levels, which themselves were 22 per cent lower than our baseline set in 2019.  Our intensity ratio, which measures our Scope 1 & 2 emissions against our revenue has reduced to 33.0, down from 48.3 in 2020 and 55.7 in 2019.  During 2021, five additional sites in the US transitioned to renewable energy contracts. As we look forward, further reductions in our carbon emissions will require other measures such as infrastructure and process projects to reduce electricity consumption and investment in solar power or a change in the approach of local Governments to provide renewables in Mexico, China and Malaysia. In 2022 we will undertake feasibility studies for possible solar projects.

For our Scope 3 emissions we have been assessing areas of materiality for the Group to better understand our emissions. Our top four most significant, and measurable categories are transportation (upstream and downstream), purchased goods and services, and waste, the last of which we are already measuring at certain locations. In 2021 we have made progress in improving the robustness of our reporting on the waste we send to landfill at site level.

TT has recently established a corporate partnership with the Carbon Disclosure Project (CDP) Supply Chain Management team to help measure our supply chain emissions. The data gathered will allow us to create a database, develop data gathering and measurement tools, assess the relevance and magnitude of each category, and put robust plans in place to reduce emissions. We will report on these plans once established.

In addition, we are focusing on reducing single-use plastics within the business; we have 10 sites that currently monitor this. We are in the process of verifying the data captured and will make a commitment to reducing this once we have established a baseline. Our continuing progress on ESG matters has been recognised externally, having received a rating of ‘AA’ in the latest MSCI ESG Ratings assessment and we have a ‘C’ rating from CDP.

ESG matters including culture, strategy, regulatory compliance, risk and internal controls are governed as part of our overall governance and risk management frameworks, ultimately overseen by senior management and the Board. An update on key health, safety and environmental (including sustainability) metrics is provided at each Board meeting and in-depth reviews are undertaken on at least an annual basis. 

Our teams are passionate about finding solutions to the world’s toughest technology challenges and delivering for customers. We champion knowledge, skills, innovation, problem solving and service in four key areas: power, connectivity, sensing and manufacturing &engineering. We set out to attract, promote and retain the best, diverse, talented people and we are focused on developing expertise at all levels of the organisation.


We continue to enhance the quality of our businesses and are making tangible progress towards double-digit adjusted operating margins. We have started 2022 with a record order book, which gives us the confidence and the visibility to achieve our growth plans for the year whilst continuing to manage the ongoing cost and supply chain challenges in partnership with our customers.

As a result we are confident that TT’s momentum will continue, with the outlook for financial performance in 2022 in line with management expectations, although we are mindful of increased geopolitical uncertainty. With good customer wins, strength in our target markets, and the commercial aerospace recovery still to come, we believe the Group is in a strong position for the future.


Group revenue was £476.2 million (2020: £431.8 million). This included a £15.2 million contribution from acquisitions and adverse currency translation of £12.7 million.  Group revenue was 14 per cent higher than the prior year at constant currency and 10 per cent higher on an organic basis.  Sales volumes in key markets, with the notable exception of commercial aerospace, have rebounded and the strength of our order book, at an all-time high, and pipeline of new business opportunities gives us confidence that this momentum will continue.

The Group’s adjusted operating profit was £34.8 million (2020: £27.5 million) and statutory operating profit was £19.3m (2020: £6.6m) after a charge for items excluded from adjusted operating profit of £15.5 million (2020: £20.9 million) including:  

·    Restructuring costs of £7.8 million (2020: £14.5 million) comprising £5.9 million relating to the restructure of the North America Resistors business, £1.5 million relating to the closure of our Lutterworth site, and £2.4 million relating to the other elements of our self-help programme. These costs were partially offset by a gain of £1.7 million from the disposal of freehold properties at Covina, and Corpus Christi (2020: £1.2 million property gain). In addition to this, there was a net gain of £0.3m relating to pension projects.

·    Acquisition and disposal costs totalled £7.7 million (2020: £6.4 million) comprising £2.6 million (2020: £3.2 million) of integration and acquisition costs relating primarily to the Torotel integration and the Ferranti acquisition, which completed early in 2022. Amortisation of intangible assets arising on business combinations was £5.1 million (2020: £4.2 million). In 2020 there was a £1.0 million credit due to the release of the warranty and claims provision relating to the Transportation business.

The adjusted operating margin of 7.3 per cent (2020: 6.4 per cent) includes the start-up costs to establish the Virolens product line. Excluding these costs, the adjusted run-rate operating margin was 8.1 per cent. This improvement reflects operational leverage on our sales growth and the benefits of our self-help programme and was delivered despite increases in input costs linked to supply chain constraints, which we are in the process of recovering through price increases.

The net finance cost was £3.3 million (2020: £3.7 million).  The Group’s overall tax charge was £3.2 million (2020: £1.6 million), including a £3.0 million credit (2020: £2.7 million credit) on items excluded from adjusted profit.  The adjusted tax charge was £6.2 million (2020: £4.3 million), resulting in an effective adjusted tax rate of 19.6 per cent (2020: 18.1 per cent). 

Basic earnings per share (EPS) was 7.3 pence (2020: 0.8 pence) reflecting the increase in operating profit and the reduction in adjusting items set out above.  Adjusted EPS increased to 14.5 pence (2020: 11.7 pence), reflecting the improved adjusted operating profit in the period.

The total net accounting surplus under the Group’s defined benefit pension schemes was £74.5 million ( 2020: £30.5 million). The main driver of this was a rise in corporate bond yields reducing the Scheme’s benefit obligation and an increase in the fair value of assets due to investment performance. The surplus also increased due to company contributions paid of £5.5 million, as the contribution plan continued as we work towards the buy-out of the UK scheme over time.

Adjusted operating cash inflow was £39.5 million (2020: £49.0 million inflow).  Improved profitability was more than offset by a working capital outflow of £14.7 million (2020: £3.6 million inflow), including a £42.6 million investment in inventory to support the strong order book and to deal with supply chain constraints. Capital and development expenditure increased to £16.8 million (2020: £13.2 million) reflecting investment to support growth and as part of the self-help programme. This resulted in adjusted operating cash conversion of 65 per cent (2020: 130 per cent). On a statutory basis, cash flow from operating activity was £14.3 million (2020: £28.2 million).

There was a free cash outflow of £1.3 million (2020: inflow £14.4 million), net of £5.9 million of restructuring and acquisition related costs (2020: £8.1 million), relating to the self-help programme and acquisition costs associated with the Covina and Torotel acquisitions.  Cash restructuring costs were net of £9.1 million of property disposal proceeds. Pension contribution payments in the year totalled £5.5 million (2020: £5.4 million).

Investments in acquisitions totalled £0.5 million (2020: £48.7 million) relating to deferred consideration on a prior year acquisition. The spend in 2020 reflected the acquisition of Covina, the acquisition of Torotel, Inc, including £3.0 million of debt acquired with Torotel, Inc and £3.8 million of debt like items, as well as £0.5 million of deferred consideration relating to a prior year acquisition.  In 2020 there was £20.2 million of equity issuance, which primarily related to the Torotel acquisition placing. Dividend payments totalled £11.4 million (2020: £ nil).

At 31 December 2021 the Group’s net debt was £102.5 million (31 December 2020: £83.9 million), including £22.6 million of lease liabilities (31 December 2020: £15.9 million).  Leverage at 31 December 2021, consistent with the bank covenants, was 1.7 times (31 December 2020: 1.6 times).



The Power and Connectivity division develops and manufactures power application products and connectivity devices which enable the capture and wireless transfer of data.  We collaborate with our customers to develop innovative solutions to optimise their electronic systems.

                20212020ChangeChange constant fx
Adjusted operating profit1£7.8m£10.3m(24)%(21)%
Adjusted operating profit margin15.6%8.2%(260)bps(250)bps

See note 1 on page 3 for an explanation of alternative performance measures.  Adjusting items are not allocated to divisions for reporting purposes.  For further discussion of these items please refer to the section titled ‘Reconciliation of KPIs and non IFRS measures’ on page 40 of this document.

Revenue increased by £15.1 million to £140.2 million (2020: £125.1 million).  There was a £15.2 million revenue contribution from Torotel which we acquired in November 2020 and there was an adverse currency effect of £3.4 million.  Organic revenue was 3 per cent higher with growth in defence, healthcare and automation & electrification whilst aerospace volumes declined, particularly in Q1 2021, against Q1 2020 which was not impacted by COVID-19.  

Adjusted operating profit reduced by £2.5 million to £7.8 million (2020: £10.3 million).  Included within this was a profit contribution of £1.5 million from the Torotel acquisition.  The adjusted operating margin was 5.6 per cent (2020: 8.2 per cent) which was impacted in part by a lag in the recovery of higher material and freight costs, given the longer cycle nature of the division.  Run rate divisional margins were 8.3 per cent excluding the start-up costs incurred in relation to the Virolens project.

Operational excellence initiatives included the closure of the division’s Lutterworth, UK site, and manufacturing has been transferred to Bedlington, UK. The closure consolidates the division’s operations further within its existing operational footprint. We also initiated the footprint rationalisation at Covina, with the business being consolidated into the Torotel site at Kansas City, as one power business. The full benefits of these actions will be realised in 2023 and will support additional investment in R&D.

The Virolens production line was completed during the year and the product received its first regulatory approval from the MHRA in Great Britain. While we understand dialogue continues with other regulators there have been no further approvals.

There have been some notable contract awards during the year, including:

·    Our engineering team in Minneapolis, Minnesota collaborated with Radwave Technologies, an innovative surgical navigation tracking technology company to develop smaller, more accurate sensor coils which support new procedures in structural heart and orthopaedic healthcare. This example is evidence of the success of our cross-selling efforts as our GMS business will also provide complete system manufacturing under an exclusive five-year contract. We also reached an agreement to become Radwave’s exclusive provider of navigation sensors and early in 2022 further extended our partnership to the manufacturing of control unit and field generating antenna.

·    In aerospace and defence, a cross selling opportunity that TT brought to the Torotel business generated over $2 million (over £1.5 million) in orders in 2021 for complex, ruggedised wire harness assemblies. We won through partnering with a major customer and investing in the capabilities needed to succeed in this market. We are now positioned to partner with other aerospace and defence customers to provide this product.  With a second aerospace and defence prime, TT used its supply chain expertise to significantly reduce lead times and was the only supplier positioned to secure critical materials and meet programme requirements.  

·    In October, we were awarded a contract with a major defence prime, RBSL, for the main UK army vehicle programme for the next 10-20 years. We will provide complex high reliability power electronics assemblies to the Boxer vehicles. The multi-year contract worth over £5 million is centred around the development of two types of primary power assemblies and secures us a spot within the mechanised infantry vehicle supply chain. We will lead the design, production and delivery of the battery control units enabling increased efficiency of the vehicle power management system as well as the command display units providing signalling and communications functionality on every Boxer vehicle.

In January 2022 we were delighted to complete the £9 million acquisition of Ferranti Power and Control (P&C), based in Greater Manchester, which designs and manufactures mission-critical complex power and control sub-assemblies for blue chip customers in high-reliability and high-performance end markets, primarily aerospace and defence. One of the principal benefits of the acquisition is that it brings highly skilled employees who provide full-service capabilities from design, assembly, manufacturing, and testing including environmental stress screening and inspection through to service.

Ferranti P&C adds further technology capability, IP and scale to our Power business with valuable long-term customer relationships and programmes with leading global aerospace, defence and industrial OEMs operating in highly regulated markets with significant barriers to entry through necessary industry accreditations and customer approvals.

The acquisition is expected to be modestly earnings enhancing, to generate mid-teens operating margins and to generate a return on invested capital in excess of the Group’s WACC in year one. We expect to generate cost synergies of circa £0.4 million by year three.


The Global Manufacturing Solutions division provides manufacturing services and engineering solutions for our product divisions and to customers that often require a lower volume and higher mix of different products.  We manufacture complex integrated product assemblies for our customers and provide engineering services including designing testing solutions and value engineering.

                2021                2020          Change          Change         constant fx
Adjusted operating profit1£18.3m£15.0m22%24%
Adjusted operating profit margin18.3%7.6%70bps60bps

See note 1 on page 3 for an explanation of alternative performance measures.  Adjusting items are not allocated to divisions for reporting purposes.  For further discussion of these items please refer to the section titled ‘Reconciliation of KPIs and non IFRS measures’ on page 40 of this document

Revenue increased by £22.6 million to £220.1 million (2020: £197.5 million) including an adverse currency effect of £4.1 million, with organic revenue 14 per cent higher.  The organic revenue performance reflects good growth from our existing customer base and a particularly strong performance in the Asia region, particularly from our healthcare and automation & electrification end markets. 

This division has performed incredibly well in 2021, reflecting our robust platform and targeted move towards customers who value our partnership and who are winners in their own growth markets. Work on positioning this business as a partner to our customers to win long-term incremental business is reflected in our order book growth. The addition of GMS capability to the Kuantan site in Malaysia, back in 2020, has added value through the expansion of our high-level assembly capabilities to a variety of key customers. The order book is such that the division is fully booked for 2022.

Adjusted operating profit increased by £3.3 million to £18.3 million (2020: £15.0 million). The increase reflects operational leverage on the organic growth delivered and benefits from our self-help programme, including factory efficiencies. The adjusted operating profit margin improved to 8.3 per cent (2020: 7.6 per cent).

During the year, in the face of increasing supply chain headwinds, we adapted software tools and data analytics to enhance visibility of parts availability and sourcing helping to mitigate the impact of cost increases and lead time extensions for our customers. Despite this intense focus, inventory levels at the year-end were impacted by increasing lead times on critical component parts.

There have been a number of significant new customer awards during 2021 which will impact future years, as follows:

·    GMS won a contract with a world-leading life sciences customer for machines used in spectrometry elemental isotope analysis to understand the chemistry and composition of materials in healthcare and life sciences. We won the contract from an underperforming competitor based on our service and product quality. Demand from this customer continues to be driven by post pandemic growth in healthcare and life sciences technology markets

·    We won a contract with a new customer, Azenta Life Sciences, based on our reputation with another medical prime. We are engaging on multiple services including value add and vertical integration. Azenta was looking for a manufacturing partner in Asia where a substantial amount of its life sciences revenue is realised, which could help mitigate global supply chain risks.

·    A contract has been awarded with a long-standing customer to create a complete end-to-end supply chain solution for a next generation silicon carbon (SiC) inverter, a key component used in high performance electric vehicles. TT collaborated with this customer through the early design phase of the project and has been appointed the exclusive manufacturing partner for the SiC inverter.

·    A new project with a renewable energy provider to provide solutions for voltage converters in offshore substations. This continues a ten-year collaboration to provide manufacturing solutions for multiple renewable energy projects.

·    We are providing complex high-level assembly solutions for a customer’s innovative micro-turbine generator technology that powers some of the largest mobile networks and TowerCos worldwide. TT is supporting this customer to provide cleaner, energy solutions that are transforming the off-grid telecoms power sector, providing clean, affordable and reliable power.


The Sensors and Specialist Components division works with customers to develop high-specification standard and customised solutions, including sensors and power management devices.  Our solutions improve the precision, speed and reliability of critical aspects of our customers’ applications.

 20212020ChangeChange constant fx
Adjusted operating profit1£16.4m£9.4m74%82%
Adjusted operating profit margin114.2%8.6%560bps550bps

See note 1 on page 3 for an explanation of alternative performance measures.  Adjusting items are not allocated to divisions for reporting purposes.  For further discussion of these items please refer to the section titled ‘Reconciliation of KPIs and non IFRS measures’ on page 40 of this document.

Revenue increased by £6.7 million to £115.9 million (2020: £109.2 million) net of an adverse currency effect of £5.2 million.  Organic revenue was 11 per cent higher, with the division’s exposure to the automation & electrification market the driver of increased demand. This business is in the sweet spot of enabling our customers to reach their sustainability goals with components for smart energy & city infrastructure and factory automation.

Despite usually having limited visibility, the order book in this division has increased significantly reflecting strong underlying demand but also in part, customers committing orders further ahead to protect their supply chains and responding to lead time extensions.

Adjusted operating profit increased by £7.0 million to £16.4 million (2020: £9.4 million).  Operating profit reflects the benefits of our self-help programme, some of which was achieved ahead of schedule, and the strong operational leverage on our revenue growth.  We benefited from our agility in adapting our pricing strategies including timely price increases to offset ongoing material and freight cost increases. The adjusted operating profit margin was up 560 bps to 14.2 per cent (2020: 8.6 per cent). 

As part of the Group’s ongoing self-help programme, the closures of the sites in Barbados, Carrollton and Corpus Christi, Texas were completed in the year and we moved to our new facility in Plano, Texas. We have invested in capacity and improved yields which are enabling volumes to be produced at higher rates and are focused on improving our customer experience.

There were a number of favourable developments during the year which will benefit the business, including:

·    We won a contract for defibrillator resistors which involved a collaboration between our engineers in the UK with our sales capabilities in Asia. The win includes production as well as test equipment charges

·    We recently launched a revolutionary optical sensory array FlexSenseTM designed to optimise optical encoder applications for evolving automation and healthcare markets. This product meets customer requirements for customised, high-end optical encoder sensors which can be configured for higher resolution, faster response and smaller footprint. It also enables acceleration of time-to-market and manufacturing throughput for our customers

·    TT Electronics have a proven track record for providing quality resistors for a technology and innovation customer. This customer awarded a contract for current sense and fusible resistors to ensure the safety of its battery pack for its industry leading, high-reliability and high specification products.

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