Latest news with #GBP32
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
26-03-2025
- Business
- Yahoo
Smiths Group PLC (SMGKF) (H1 2025) Earnings Call Highlights: Strong Organic Growth and ...
Organic Revenue Growth: 9.1%, including acquisitions increased to 10.2%. Reported Revenue Growth: 6.7%, impacted by adverse foreign exchange. Operating Profit Growth: 12.6% organic, 9.5% reported, with a margin expansion of 40 basis points to 16.7%. EPS Growth: 14%, enhanced by lower tax, interest charges, and share buyback program. Cash Conversion: 94%. Return on Capital Employed: 17.1%. Dividend Increase: 5% to 14.23p. Share Buyback Program: Increased to GBP500 million. Free Cash Flow: GBP143 million, up nearly 30% from last year. John Crane Organic Revenue Growth: 3.8%. Flex-Tek Organic Revenue Growth: 2.5%, with acquisitions adding 4.4%. Smiths Detection Organic Revenue Growth: 15.3%. Smiths Interconnect Organic Revenue Growth: 26.8%. Full-Year CapEx Expectation: Around GBP100 million. Acquisition of Duc-Pac Corporation: GBP32 million at 7.2 times EBITDA. Warning! GuruFocus has detected 6 Warning Sign with SMGKF. Release Date: March 25, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Smiths Group PLC (SMGKF) reported strong financial performance with organic revenue growth of 9.1% and operating profit growth of 12.6% on an organic basis. The company increased its dividend by 5% and expanded its share buyback program to GBP500 million, enhancing shareholder returns. Smiths Detection and Smiths Interconnect showed significant growth, with Detection's revenue increasing by 15.3% organically and Interconnect's revenue growing by 26.8%. The company is executing a strategic plan to focus on high-performance technologies, which includes the separation of Smiths Interconnect and Smiths Detection to unlock value. Smiths Group PLC (SMGKF) reaffirmed its fiscal-year '25 guidance, which has been raised twice since last September, indicating confidence in future performance. The company experienced a cybersecurity incident in January, impacting John Crane's performance and causing a 1% to 2% reduction in growth for the division. Adverse foreign exchange effects led to a lower reported revenue growth of 6.7%, compared to the organic growth rate. The mix of business and product lines led to a 60 basis point contraction in margins, particularly affecting John Crane and Flex-Tek. The US construction market remains uncertain, affecting Flex-Tek's growth outlook, with new housing permits and starts showing declines. The separation process for Smiths Interconnect and Smiths Detection involves complexities and potential costs, with the company needing to ensure a smooth transition. Q: Can you quantify the impact of the cyber incident on John Crane and discuss the recovery outlook? A: Roland Carter, CEO: The cyber incident impacted John Crane significantly, reducing growth by 1% to 2%. We expect a stronger second half as recovery progresses, but it will take time due to the vertically integrated nature of the business. Aftermarket recovery is underway, and we anticipate improved performance in H2. Q: What are the plans for the demerger or sale of Smiths Detection and Smiths Interconnect? A: Roland Carter, CEO: We aim to announce the sale of Smiths Interconnect by the end of the calendar year, with Smiths Detection to follow. We are open to both demerger and sale options, focusing on value creation. The processes are on track with governance and advisory structures in place. Q: How do you view the growth assumptions for FutureSmiths, and what are the margin improvement prospects? A: Roland Carter, CEO: We target a 5% to 7% organic revenue growth and a 21% to 23% margin. Both John Crane and Flex-Tek have opportunities for margin expansion through pricing, efficiency, and innovation. The focus on these businesses will drive technical and commercial advancements. Q: Can you elaborate on the performance and outlook for Flex-Tek, especially in the industrial segment? A: Roland Carter, CEO: Flex-Tek's industrial segment grew 2% despite a subdued construction market. We expect stronger growth in H2, driven by industrial heat and aerospace segments. The US housing market recovery will be a key driver, and we are well-positioned to capitalize on it. Q: What is the sustainability of the Interconnect margin, and how are you managing US tariffs? A: Julian Fagge, CFO: Interconnect's margin performance was strong, and we expect it to remain robust in the second half. Regarding US tariffs, our local-for-local approach mitigates impacts, and we have plans to address any changes in the tariff landscape. Q: How is the semiconductor segment performing within Interconnect, and what is the visibility on future growth? A: Julian Fagge, CFO: The semiconductor segment, particularly in high-performance GPUs and AI, performed strongly. Although the market is short-cycle, underlying conditions remain positive, and we are well-positioned with our advanced technology offerings. Q: What is the status of the M&A pipeline, and how are you managing capacity for acquisitions amid other initiatives? A: Roland Carter, CEO: We have a focused pipeline for bolt-on acquisitions, particularly in Flex-Tek and John Crane. Dedicated teams manage these acquisitions, ensuring we maintain capacity for strategic initiatives like demergers and the acceleration program. Q: Can you provide an update on the divestment process for Interconnect and Detection? A: Julian Fagge, CFO: The divestment process is proceeding as planned, with strong interest expected. We are confident in executing the transactions as committed, focusing on maximizing value. 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
