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TT ELECTRONICS Looks Primed For Recovery. (TTG)     

goldfinger - 10 Dec 2003 12:52

TT ELECTRONICS Looks Primed For Recovery.

Im recommending TT Electronics after having this stock on my watch list for the last few months and have to say it really as a solid management, and a management that backs the company up with solid Director Buying. It’s a business that is in the early stages of recovery after the Bear market and Worldwide recession of the last three years.

What Does It Do?

The company has four main divisions, Automotive, Telecolm and Computer, General Industrial division, and Electrical Division.

Automotive is by far the biggest division and - represents 63 per cent of the electronic sector turnover. It designs and produces amongst other things a range of sensor and system technologies, and also produces a range of resistor and trimmer components. These products are sold worldwide.

Telecom and Computer markets - represent 15 per cent of the electronic sector turnover. The group produces magnets and resistors for mobile products including phones, and as set up a new manufacturing base in Southern china where new products are being designed for the mobile market.

Industrial market - represents 22 per cent of the electronic sector turnover .
In this division additional technical sales and engineering resources have been focused on the more diverse markets of aerospace, defence, medical and control instrumentation. A number of new programmes have been won in all these market areas.

Electrical sector which comprises of two divisions.
Power generation - represents 29 per cent of the electrical sector turnover
Here the company produces power generators mainly for the Chinese market and enviromental connectors for the North African market.

Power transmission - represents 71 per cent of the electrical sector turnover.
Specialist cables for naval vessels and wind farms are produced in this division, and interest is from a worldwide audience.


Latest results.

Interim Results for the half year ended 30 June 2003.

TT electronics, a world leader in resistor and sensor technology today announces its interim results.

KEY POINTS •
Group turnover on continuing activities grew by 4 per cent to 270.4 million (2002: 261.2 million).
•Profit before tax, goodwill amortisation and exceptional items was 9.1 million (2002: 11.3 million). •The interim dividend is maintained at 3.69p per share.
•Operations continue to generate cash and gearing remains low at 27 per cent.
•Sales to the automotive market grew by 11 per cent including a contribution from our French subsidiary acquired in March 2003. •
The strength of the balance sheet positions the group to finance both acquisition opportunities and future growth.
•Neil Rodgers has been appointed to the Board ahead of the retirement of Sheridan Comonte in April 2004.

John Newman, Executive Chairman said today: 'The results we have announced today reflect the strength of our automotive operations while some of our other markets continue to experience weakness. We have continued to implement measures to ensure our resources are aligned to likely future demand. As one of the world's leading producers of customer specific resistive products, we believe that we are well placed to benefit when markets recover. The 11 per cent increase in sales to the automotive market in the face of declining vehicle production underlines the inherent strength of our technologies. TT electronics continues successfully to design high quality new products to satisfy the needs of manufacturers who are committed to increasing the electronic content of motor vehicles. The automotive sensors and systems businesses remain on track to achieve internal forecasts of 25 per cent sales growth between 2002 and 2005.


Recent Developments.

TT as acquired US electronic sensor company Optek Technology for $51.3 million (30.2 million).
About 40% of Optek's sales are of Hall Effect sensors for the automotive market, which are already big business for TT in Europe where it sells somewhat more sophisticated versions.
The acquisition should increase the company's US turnover to about $70 million up towards its target of $100million and provide sales synergies.
Optek managed sales worth 40.4 million in the year to the end of January 2003 and produced profits before tax interest and goodwill charges of 2.4 million.
TT is buying the business in a debt free state and will pay cash.

One great advantage of the acquisition is that the acquisition of Optek will introduce fibre optics to TT electronics' range of technologies. Optek's fibre optic products include transmitters, receivers and transceivers which interface with the terminated end of a fibre optic cable. They are used to convert the light signal travelling through the fibre optic cable to an electrical signal which can be interpreted by a microprocessor. Applications include local area networks, fibre-to-the-desk, industrial data links and storage area networks.. Optek has also developed a 'Plastic Fibre Optic Transceiver' (PFOT) which can be used for fibre optic cable connections in entertainment systems of luxury vehicles. Optek believes that PFOT applications are likely to grow significantly. In particular, the replacement of copper wiring harnesses in vehicles with fibre optic cable significantly reduces weight and is therefore potentially highly attractive for the automotive industry.

Commenting on the acquisition, John Newman, Executive Chairman of TT electronics said 'I am delighted that after an extensive search we have identified an acquisition which both creates clear business synergies and satisfies our financial criteria. The acquisition of Optek will significantly expand our sensor activities in terms of technology, customer base and product range as well as increasing our low cost manufacturing capacity. The acquisition of Optek will enhance TT electronics' earnings per share in the coming year.

Director Share Buying.

Executive chairman J B Newman purchased 100, 000 shares at 124.2p on the 5th of December and director N A Rodgers purchased 10,000 shares at 122p also on the 5th of December, the directors backing the company on its way forward.

The Way Forward.

Executive chairman John Newman told Financial Specialists Citywire, tough conditions over the last few years have moved the acquisitions market in TT's favour as they have injected more realism into the expectations of vendors. He said: 'Times have changed. A few years ago people's aspirations were too high. Now they're more realistic.' following restructuring at Optek, which moved manufacturing to a low cost facility in Mexico, TT is buying the business in far better shape than it was a year ago. He believes Optek is capable of making net margins closer to TT's usual 10%.

Shareholders can also take heart from the fact that trading is at last showing signs of improvement.
Newman said: 'I'm now saying there is an upturn in orders and I think it is sustainable.

The company claims that more than one in two cars made in Europe and North America contain at least one of its products boosted by the move from luxury to volume cars. TT expects growth rates of auto electronics to be well over 6% per year boosted by the new acquisition and this to continue for at least the next 5 years.

Newman's comments about trading are also most encouraging as until recently he was sceptical about any signs that business had picked up. The shares trade on a p/e circa of 13.5 and yield a massive 8.2%.

I look upon this as a long term investment and feel that when the Telecolm division picks up and there are signs Globaly that this is happening in the telecolms Industry, that this will turn out to be a good investment.

Cheers Goldfinger.

Please DYOR, and remember you are responsible for your own buying and selling actions.








goldfinger - 10 Dec 2003 12:56 - 2 of 73

The short term chart.

ttg.l.gif

cheers gf.

goldfinger - 10 Dec 2003 13:01 - 3 of 73

The longer term 3 year chart.

draw_chart.php?epic=TTG&type=1&size=1&pe

cheers gf.

Andy - 10 Dec 2003 14:06 - 4 of 73

GF,

Don't TT manufacture for Motion Media?

goldfinger - 10 Dec 2003 15:42 - 5 of 73

Not sure Andy, they just about manufacture for everyone in the world.

cheers GF.

Andy - 10 Dec 2003 19:02 - 6 of 73

GF,

This comes from the Motion Media results 2002;
-----------------------------------------------------
MANUFACTURING
Through TT Electronics Manufacturing Services Ltd in the UK, formerly AB Electronic Assemblies Ltd, we have established a fully turnkey relationship that has borne fruit through the production of high quality products, notably the mm745.

--------------------------------------------------------

Source : http://www.motion-media.com/html/about/pressoffice/news/2003/030325.htm

goldfinger - 11 Dec 2003 11:38 - 7 of 73

Thanks for that andy. yup looks like they just about sell products to everyone.

cheers GF.

goldfinger - 11 Dec 2003 11:39 - 8 of 73

Directors backing the company with buying.

TT bosses celebrate buy with buys

By Graeme Davies, Companies Correspondent
Email to a friend

Two top directors have shown their faith in Citywire tip TT Electronics following its acquisition of an American electronic sensor company on Friday.

Executive chairman John Newman spent 124,200 on Friday to add 100,000 shares to his holding at 124.2p per share. However this is barely a drop in the ocean compared with his total holding of 16.2 million shares or 10.5% of the 193 million company (TTG).


Joining Newman was Neil Rodgers, the chief executive-elect who joined the board in September. Rodgers, who was previously a divisional chief executive, spent a more modest 12,200 for his first 10,000 shares at 122p each. Rodgers will replace chief executive Sheridan Comonte in April.


Shares in TT have risen 1.5p to 126.5p today in response to the confidence shown by the top brass. Earlier this year it dipped as low as 80p but has since bounced to 139p. Citywire tipped it more than a year ago at 116p and reiterated the advice at 96p in January.


A prime reason for Citywire's confidence was the healthy dividend yield, which stands at 8% and although it is not covered by earnings Newman told Citywire on Friday the board intends to honour it.


Concern was raised that the 30 million TT spent on US electronic sensor company Optek Technology would eat into the funds available for dividend payments. Newman said: It is not changing our thinking on our dividend payment.'


Hopefully for TT investors trading will start to improve to complement the extra revenue brought in by Optek and on Friday Newman told Citywire: 'I'm now saying there is an upturn in orders and I think it is sustainable.' Last year Optek made sales of 40.4 million in the year to the end of January 2003 and a profit of 2.4 million.

cheers GF.

goldfinger - 12 Dec 2003 03:22 - 9 of 73

Forgot to mention this one has a 24% holding in listed Pressac the mobile phone and fuel cell parts producer. Could we be looking at a take over and further growth when the telecolms markets recovery really gets under way?.

cheers GF.

goldfinger - 12 Dec 2003 11:28 - 10 of 73

Tip Update: TT expands as prospects improve

Published: 10:40 Fri 11 Dec 2003

By Algernon Craig Hall, Secret Buying Correspondent

Email to a friend |

TT Electronics has unveiled a 30 million US acquisition but assures that this will not influence its next dividend payment.

Executive chairman John Newman told Citywire tough conditions over the last few years have moved the acquisitions market in TT's favour as they have injected more realism into the expectations of vendors. He said: 'Times have changed. A few years ago people's aspirations were too high. Now they're more realistic.'


TT is acquiring US electronic sensor company Optek Technology for $51.3 million (30.2 million).


About 40% of Optek's sales are of Hall Effect sensors for the automotive market, which are already big business for TT in Europe where it sells somewhat more sophisticated versions.


The acquisition should increase the company's US turnover to about $70 million up towards its target of $100million and provide sales synergies.


Optek managed sales worth 40.4 million in the year to the end of January 2003 and produced profits before tax interest and goodwill charges of 2.4 million.


However Newman said following restructuring at Optek, which moved manufacturing to a low cost facility in Mexico, TT is buying the business in far better shape than it was a year ago. He believes Optek is capable of making net margins closer to TT's usual 10%.


TT is buying the business in a debt free state and will pay cash.


A key short term concern for shareholders is whether the cost of the acquisition could cause a reduction in the company's thinly cover dividend payment. The message from Newman appears to be that shareholders have little to fear on this front.


Newman said: 'It is not changing our thinking on our dividend payment.'


Shareholders can also take heart from the fact that trading is at last showing signs of improvement.
Newman said: 'I'm now saying there is an upturn in orders and I think it is sustainable.'


Citywire Verdict: This looks like a good acquisition for TT especially if the operational improvements at the business show through as expected.


Newman's comments about trading are also most encouraging as until recently he was sceptical about any signs that business had picked up.


The shares are up 2p today to 132.5p. At that price they are valued at 13.7 times existing forecasts for this year and are set to yield a mighty 8.2%.


Citywire tipped TT a little more than a year ago at 116p and again in January at 96p. Trading prospects now look better and payment of the enticing dividend looks highly likely. The stock is well worth holding on to at this price.

cheers GF.




goldfinger - 13 Dec 2003 00:12 - 11 of 73

Up another 3p today and going great guns.

cheers GF.

goldfinger - 15 Dec 2003 15:50 - 12 of 73

6 days up on the trot?, another 3p today so far.

cheers GF.

goldfinger - 17 Dec 2003 00:08 - 13 of 73

And up again 1p only but everthing else has been falling.

cheers GF.

goldfinger - 29 Dec 2003 23:41 - 14 of 73

Well a good day for this one and some heavy tipping over christmas.

cheers GF.

goldfinger - 05 Jan 2004 01:35 - 15 of 73

Broken into blue sky now and into a gap. 179p next resistance level to take out.

cheers GF.

goldfinger - 05 Jan 2004 11:43 - 16 of 73

Another one with strong TA formation.

di.php?CompanyID=44103388&fn=..%2F..%2Fw

Has risen 79% since the bottom on 25 Mar 2003 at 80.00. Has broken through the ceiling of a falling trend channel. This indicates a slower falling rate initially, or the start of a more horizontal development. RSI is overbought. The stock can still rise further, and we should see a decreasing RSI before this is used as a negative signal. The stock has broken up through the resistance at p 140. This predicts a further rise. In case of negative reactions, there will now be support at p 140.


Period Vol.bal. Volatility Liquidity +/- %
1 day - 1.13% 20.02 +1.06%
5 days -7.21 4.36% 13.00 +5.90%
22 days -39.03 13.32% 59.09 +24.24%
66 days 5.02 30.28% 40.60 +8.71%

cheers GF.






goldfinger - 08 Jan 2004 23:28 - 17 of 73

Up 5.5p today and going for the next resistance point of 179p.

cheers Gf.

goldfinger - 12 Jan 2004 11:24 - 18 of 73

Going great guns again this morning. Once through 179p look out for 250p fairly quickly.

cheers GF.

goldfinger - 12 Jan 2004 11:33 - 19 of 73

TT electronics PLC
12 January 2004


TT electronics plc
Trading update

The Board of TT electronics plc is confident that trading during 2003 has been
in line with current City expectations.

The reorganisation of the magnetics businesses referred to in the Interim Report
in September 2003 has now been substantially completed.

Optek Technology Inc, which was acquired in December, has significantly expanded
our sensor activities in the USA and has introduced new markets and technologies
to the group. This acquisition is now being integrated into the group's
operating and reporting structure and will benefit the group's earnings per
share in 2004.

The trading outlook is more encouraging than at the same time last year. TT
electronics enters 2004 with a broader customer base and an increased product
range. Currently demand for our automotive products remains strong and our
overall order intake for sensors and electronic systems continues to grow. The
markets for electronic components are now showing signs of improvement which we
anticipate will increase future demand for our products.

In the absence of a significant unforeseen event, the Board intends to recommend
a final dividend for 2003 at the same level as for 2002.
Enquiries:

TT electronics plc
John W Newman, Executive Chairman Tel: 01932 856 647

Biddicks
Zoe Biddick Tel: 020 7448 1000



This information is provided by RNS
The company news service from the London Stock Exchange

goldfinger - 12 Jan 2004 15:32 - 20 of 73

TT benefits from rising automotive demand

Published: 12:16 Mon 12 Jan 2004
By Algernon Craig Hall, Secret Buying Correspondent
Email to a friend

TT Electronics reiterated the positive trading comments it made in November in a trading update today.

Chairman John Newman, who up until November avoided stoking shareholders' recovery hopes now expects TT (TTG) to benefit from trading improvements.


The group's automotive electronics business continues to benefit from manufacturers' enthusiasm for high-end electronics as a way of securing sales in what many expect to be tough 2004 markets.


Demand for automotive products remains strong and order intake for sensor and electronic systems continues to grow. In addition TT says the markets for electronic components in general show signs of improvement.


In November TT bolstered its range of automotive sensors and its US penetration with the 30.2 million acquisition of Optek Technology. The acquisition is expected to enhance earnings in 2004.


The group should also benefit from the reorganisation of its magnetics businesses, which is now substantially complete.


The board intends to maintain the final dividend, which will mean a fat 10.1p payment for the year.


Citywire Verdict:


Citywire tipped TT on the back of a downbeat trading update this time last year that took the shares down to 96p. We had recommended the shares as a good dividend play with recovery prospects at 116p in November.


Thankfully today's trading news has taken the shares in the opposite direction to last year's update. The shares are up 5.5p to 154.5p.


Readers who followed our original tip should continue to benefit from the shares massive dividend yield and could well be in for capital growth should improved conditions in TT's markets persist.
today's price the shares are set to yield an impressive 6.5% and are valued at 16.4 times forecast earnings for TT's recently completed financial year and 12.9 times expectations for the current year. The stock is worth sticking with and could receive a boost when the full year results are published.ENDS.

Well worth buying in my opinion.

cheers GF.



goldfinger - 12 Jan 2004 23:58 - 21 of 73

Up another 5.5p and looking strong.

cheers GF.
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