TT Electronics profits fall as North American challenges offset European growth

Investing.com - TT Electronics plc reported a 29.7% decline in adjusted operating profit to £13.0 million for the first half of 2025, as strong European performance was outweighed by challenges in North America and order delays in Asia.

The global electronics manufacturer saw its shares fall 1.3% following the announcement on Wednesday.

Revenue dropped 6.0% organically to £237.9 million, with the company implementing significant strategic actions to improve future performance, including the planned closure of its loss-making Plano, Texas facility and a strategic review of its components business.

"Our European region continues to perform well, driven by strong Aerospace & Defence markets and our positioning on long term programmes," said Eric Lakin, Chief Executive Officer. "Overall progress has been offset by the two site specific challenges in North America, at Cleveland and Plano, and order delays for our Asian business due to geopolitical related uncertainties."

The company reported a statutory operating loss of £5.1 million after £18.1 million in adjusting items, primarily related to the Plano site closure and Cleveland restructuring. Adjusted operating margin fell to 5.5% from 7.3% in the same period last year.

By region, Europe delivered 5% organic revenue growth with adjusted operating margin improving 330 basis points to 15.6%, driven by increased demand from aerospace and defense programs. North America saw a 10% organic revenue decline with a negative 6.0% operating margin, while Asia’s revenue fell 9% organically with margins slipping to 13.2%.

The company’s Cleveland turnaround plan is progressing with improved productivity and a strengthened leadership team. "These improvement actions in North America, further progress in Europe and a resilient contribution from Asia are expected to underpin the step up in second half profitability," Lakin added.

TT Electronics maintained its full-year adjusted operating profit guidance in line with market expectations of £33.7 million. The company continues to focus on debt reduction, with net debt excluding lease liabilities decreasing to £73.3 million from £80.1 million at year-end 2024.

The Board has decided to continue its pause on dividend payments given the ongoing economic uncertainty and business risks.

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