TT Electronics shares flop after warning over US factory troubles

Shares in TT Electronics have tumbled by nearly a third after the manufacturer warned about production issues at its US factories which are set to drag on yearly sales and profits.

The Woking-based business reported weak trading in August thanks to “operational efficiency issues” at two US sites.

It said this was leading to higher production costs than it had been anticipating.

Furthermore, the group said it was expecting to get less money from sales this year than previously thought.

This is because a string of recent orders in its American components business have been pushed into 2025, rather than for 2024 delivery, with the businesses continuing to see a “slow and steady” recovery.

The combination of higher production costs and fewer sales are set to impact its North American operating profit by between £13 million and £18 million, the group said.

Revenues over the second half of the year are also now expected to be about £15 million to £20 million lower than previously thought.

TT Electronics engineers and manufactures electronics to support sectors from healthcare to aerospace, with customers including BAE Systems and Thales, and factories and offices in the UK, North America and Asia.

The London-listed firm saw its share price drop more than 30% following the update to shareholders.

TT Electronics moved to reassure investors that it was taking action to fix the operational issues it will face during the remainder of the year and potentially into the first few months of 2025.

This includes addressing the root causes, and improving the layout and planning of its factories, although it is not expecting these changes to fully mitigate the impact this year.

The company said it will provide an update on how it is managing to fix the issues in the US and further cost savings it is making later in the year.