Components manufacturer TT Electronics has downgraded its guidance as it struggles with “operational efficiency issues” at two of its North American sites, it said today.
The London-listed company, which is headquartered in Woking, said it anticipated its revenue to be £15m to £20m lower in the six months ending December 30, 2024.
In turn this is set to impact TT Electronics’s North American operating profit by between £13m to £18m, bringing its forecast group operating profit to £37m to £42m.
It said the shortfall stemmed from delayed orders, previously scheduled for completion in 2024, now being pushed into 2025.
TT Electronics said that “plans had been put in place” to address the issues, including fixing the root causes, improving factory planning, and optimising factory layout.
However, it added that these measures were unlikely to fully offset the impact on the current financial year.
Additionally, TT Electronics said the situation had been further aggravated by a weaker-than-expected order book for high-margin components, although overall orders were line with expectations.
The problems follow a drop in demand earlier this year as a result of destocking in the US.
It previously said it was expecting these issues to resolve towards the second half of 2025, but this most recent update now means this is unlikely to happen.
In a statement published to the London Stock Exchange on Monday morning TT Electronics said: “The rest of the group continues to perform broadly in line with expectations.
“However, taking into account the performance impact of our North American business, group adjusted operating profit for FY 2024 is now expected to be in the range £37m to £42m.
“With the lower operating profit, there will be a reduction in free cash flow for 2024, resulting in net debt to adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) now expected to be around, or marginally above, the top end of our 1-2x range by December 2024.
“The company will update on the 2025 revenue outlook and rectification of the operating issues in the North American sites, together with further cost efficiencies, in the November trading update.”