Shares in component maker TT Electronics (LON:TTG) jumped 12% after the firm upgraded its FY26 profit forecast. Improved margins and ‘stronger commercial momentum’ mean operating earnings will be ahead of current market expectations.
Turnaround and self-help measures
For the six months to June, the group posted a 37% jump in operating profit despite a 2% decline in revenue. The increase was thanks to a turnaround at the EMS (electromagnetic products) business in the US and a return to profitability in Components.
The firm completed a strategic shift during H1, moving to a product-led structure around Power, EMS and Components. It also strengthened its Asian manufacturing footprint ahead of higher production volumes expected in H2.
Behind the scenes, it pretty much completed its cost-cutting programme and now sees annual savings of around £6 million. Also, its investment in sales and business development drove stronger order intake, taking the book-to-bill ratio to 112%.
TT Electronics H1 results
| H1 2026 | H1 2025 | Change | |
| Revenue (£m) | 228.1 | 234.5 | -2% |
| Operating profit (£m) | 18.5 | 13.5 | 37% |
| Operating margin | 8.1% | 5.8% | +230bps |
| Pre-tax profit (£m) | 15.8 | 8.5 | 86% |
| EPS (p) | 5.7 | 1.9 | 200% |
Source: Company accounts
Raising FY profit guidance
Thanks to its progress in H1, the firm now expects FY26 operating profit to be ahead of market expectations. The current consensus is £35 million, with a range of £32.6 million to £38.5 million.
After dipping 2% in H1, revenue is expected to return to positive organic growth in H2 due to the strong order book. Cash generation is also expected to improve in H2 with a FY run-rate of 70% to 80%.
Moreover, after reviewing the Components business the board is weighing a potential sale and has received ‘encouraging indications of interest’. With the business demonstrating good momentum and returning to profitability, any deal will be subject to valuation.
TT is one of a number of companies raising guidance this week thanks to improving margins. In the company’s case, it achieved the improvement with a big dollop of self-help, but markets are also improving.
Investors who have stuck by management despite various bid approaches have been rewarded with a recovery in the share price. Having seen off DBAY and Cicor, today the stock is almost at the level of the latter’s 155p offer.
There’s more to come, however, as the firm may sell the Components business now it’s back in the black. That could mean a reduction in leverage or a handy cash pile to invest further in the other two businesses.
