Latest news with #GBP13
Yahoo
11-04-2025
- Business
- Yahoo
TT Electronics PLC (STU:7TT) (Q4 2024) Earnings Call Highlights: Navigating Challenges and ...
Revenue: Down 13% on a constant currency basis; 5% excluding divestments; 2% on a like-for-like basis. Adjusted Operating Profit: Declined by 17% on constant currency; 13% excluding divestments. Adjusted Operating Margin: Dropped by 60 basis points to 7.1% at constant currency; 7.4% excluding divestments. Earnings Per Share: Declined by 30% at constant currency. Free Cash Flow: GBP27.7 million inflow; cash conversion at 117%. Inventory Reduction: GBP13 million reduction in inventory. Leverage: 1.8 times, within target range of 1 to 2 times. Order Intake: Up 9% organically over 2023; book-to-bill ratio at 103%. Noncash Write-down: GBP52.2 million in goodwill and asset write-down costs. Adjusted Operating Profit Forecast: Expected to be in the range of GBP32 million to GBP40 million. Dividend: Final dividend paused due to macroeconomic uncertainty. Warning! GuruFocus has detected 7 Warning Signs with STU:7TT. Release Date: April 10, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. TT Electronics PLC (STU:7TT) reported excellent performance in Europe and Asia, with significant margin improvements driven by operational efficiency. The company achieved a 9% organic increase in order intake over 2023, with a positive book-to-bill ratio of 103%. Strong cash flow generation was highlighted, with a cash conversion rate of 117% and a GBP13 million reduction in inventory. The pension scheme issue was significantly addressed, resulting in a GBP11 million net pension surplus refund. Project Dynamo has been successful in driving operational efficiency, growth, and innovation across the company. TT Electronics PLC (STU:7TT) faced significant challenges in North America, with destocking in the components market leading to volume and revenue shortfalls. Operational issues in Kansas and Cleveland negatively impacted results, leading to noncash goodwill and asset write-down costs of GBP52.2 million. The company experienced a 13% decline in revenue on a constant currency basis, with a 17% decline in adjusted operating profit. The Board decided to pause the final dividend for 2024 due to macroeconomic uncertainty and associated business risks. The company does not expect revenue growth in North America in 2025, partly due to the deferral of some revenues into 2026. Q: With the change in management, will there be any alterations to Project Dynamo? A: Eric Lakin, Acting CEO, stated that Project Dynamo is a valuable tool for continuous improvement across the business. It encourages initiatives at all levels and helps offset business headwinds, including inflationary pressures. The project will continue as it is beneficial for driving improvement and initiatives. Q: Can you explain the main components of the profit bridge from 2024 to 2025? A: Mark Hoad, CFO, explained that the Albert divestment, which contributed GBP16 million in revenue in 2024, will have minimal profit impact in 2025. Efficiency improvements in North America and one-off costs in Asia related to moving production from China to Malaysia are expected. Overall, organic growth will depend on market conditions. Q: How are customer relationships in North America being maintained despite operational issues? A: Eric Lakin noted that customer relationships remain strong due to the complexity and long-term nature of the contracts. The operational issues impact TT Electronics' margins more than customer satisfaction, and no customers have been lost. Q: What is the percentage of US revenue manufactured domestically versus elsewhere, and how feasible is it to transfer manufacturing? A: Mark Hoad stated that while manufacturing can be moved globally, it takes time. The company is currently transferring production from China to Malaysia. The specific percentage of US-manufactured revenue was not provided, but the company has flexibility in its global operations. Q: Why is TT Electronics bearing the GBP2 million cost of shifting production from China to Malaysia? A: Mark Hoad explained that the cost is part of a contractual negotiation, and the overall economic benefits of the program justify the expense for TT Electronics. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus.
Yahoo
28-02-2025
- Business
- Yahoo
Metro Bank Holdings PLC (MTRBF) (FY 2024) Earnings Call Highlights: Strong Profitability and ...
Net Interest Margin (NIM): Exit NIM at 2.65%, up from guidance of 2.5%. Profitability: GBP 13 million profit for the second half of 2024. Loan Originations: 71% increase in corporate, commercial, and SME lending year-on-year. Current Accounts Opened: 110,000 personal and 36,000 business accounts in 2024. Cost Savings: GBP 80 million in run rate savings achieved. Cost of Deposits: Reduced to 1.4% from a peak of 2.29%. Asset Sales: GBP 2.5 billion residential mortgage and GBP 584 million unsecured loan book sales. Revenue Growth: 15% increase half-on-half. Statutory Profit After Tax: GBP 42.5 million for the year. Total Costs: Reduced from GBP 530 million to GBP 510 million. Headcount Reduction: Decreased by 100 colleagues in 2024. Store Openings: Three new stores planned for 2025 in Chester, Gateshead, and Salford. Warning! GuruFocus has detected 5 Warning Sign with MTRBF. Release Date: February 27, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Metro Bank Holdings PLC (MTRBF) outperformed its guidance with a net interest margin of 2.65%, exceeding the expected 2.5%. The company achieved profitability in the second half of 2024, generating a GBP13 million profit. New loan originations in corporate, commercial, and SME lending increased by 71% year on year. The bank opened 110,000 personal current accounts and 36,000 business current accounts in 2024, capturing over a 5% market share in business accounts. Metro Bank Holdings PLC (MTRBF) formed a strategic collaboration with Infosys to enhance automation, customer experience, and AI capabilities. The cost discipline measures led to difficult decisions, resulting in a reduction of headcount by 100 colleagues. The company faced increased costs related to fraud, which is a growing concern within the industry. Despite profitability, the bank's statutory profit after tax was GBP42.5 million, indicating room for improvement. The bank's stage 3 loans increased by 15% in the second half, raising concerns about credit quality. Metro Bank Holdings PLC (MTRBF) remains under the MREL regime, which imposes additional costs, despite its balance sheet being below the GBP20 billion threshold. Q: How do you expect the shift towards commercial lending to impact your retail SME deposit mix, and how will you retain retail depositors? A: We remain committed to the retail segment, providing excellent service with more average headcount per store and longer hours than any other UK high street bank. We opened 110,000 personal current accounts in 2024 and will continue to grow this market. The deposit mix will shift slightly over time, but we will maintain our focus on retail. Regarding the unsecured lending portfolio, it was in runoff, and its income profile was declining, so selling it was a strategic move to reinvest in higher-yielding commercial growth. Q: Can you clarify the impact of Treasury asset repricing and capital structure optimization on future earnings? A: The Treasury asset repricing will have a more significant impact in 2026 and 2027, as many assets mature towards the end of 2025. Asset rotation and cost of deposits will drive uplift in 2025. All actions related to optimizing the capital structure are included in our NIM and Rodi guidance. Q: What is your expectation for the longer-term cost of risk, given the changing mix of your book? A: We had a benign year with less than expected credit loss charges. Through the cycle, we anticipate a cost of risk between 40 to 60 basis points. This range accounts for the changing mix and economic conditions. Q: With your balance sheet below GBP20 billion, what are your expectations regarding MREL requirements and resolution strategy? A: We assume no changes to our MREL requirements and resolution strategy, despite our balance sheet being below GBP20 billion. Our guidance includes the cost of additional MREL, assuming we remain in the regime for the next five years. If we were released from the regime, it could add 5 to 7 points to Rodi. Q: Can you explain the implications of recognizing the deferred tax asset and the expected restructuring charges for 2025? A: Recognizing the deferred tax asset reflects our confidence in future profitability, which will shield our tax as we earn profits. We do not expect similar restructuring charges in 2025 as we have set up the bank for future growth. Our return on tangible equity guidance is fully inclusive of all costs. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus. Sign in to access your portfolio
