TT Electronics sales ahead of expectations

Sales for the full year ended 31 December 2009 were approximately 23% lower than 2008 at constant exchange rates compared with the 29% reduction reported at the half year. As previously reported, significant progress has been made during the year in restructuring the Group's businesses and reducing the cost base, with the measures taken expected to lead to an annualised cost reduction of over £30 million. As part of this programme, TT announced the transfer of manufacturing at Glenrothes in Scotland to Welwyn Components whilst retaining a warehousing and distribution facility.  TT also announced the further transfer of manufacturing activities to China from the UK plants of WT Henley and AB Electronics. Restructuring of the magnetics business within the General Industrial division is ongoing. The Key Account Management programme has been extended to 14 customers and the Virtual Market teams continue to make good progress resulting in additional customer wins. A new Divisional Chief Executive for Components was appointed to succeed the present incumbent on his expected retirement. The Group has entered into consultations with affected staff on the proposed closure to future accrual of its defined benefit pension scheme in the UK. The Group achieved a significant improvement in working capital performance in the last quarter of 2009, exceeding the upgraded annual target reduction in working capital of £17-20 million. As a result, net debt at the end of December 2009 was below £60 million, compared with £113 million at the start of the year. Although trading has been slightly ahead of the Board's expectations over the last quarter due to re-stocking by customers, the Board, taking into account the global economic uncertainty, remains cautious on the outlook for 2010. The implementation of the strategy, together with the measures taken to reduce the cost base, positions the Group to develop its business further in its selected markets.