Companies: TTG   

Impatient with the lack of any sign that telecoms markets may be improving, TT has decided to act, transferring the manufacture of ferrites from the UK and US to India, and consolidating printed circuit board manufacture into one factory. Because of the costs associated with the changes, pre-tax profits for the year to December 2002 will be at the bottom end of broker expectations (around £22m), excluding impairment provisions on the company's tangible and intangible asset base. This is slightly disappointing, though the news is not as bad as it might have been. Automotive electronics sales continued to march forward strongly, despite the difficult conditions for car manufacturers worldwide. The company is well positioned in this niche growth market, partially balancing its exposure to telecommunications and enabling it to keep on giving large slugs of its profits out in dividends. This time around the final dividend should be unchanged, so investors should expect a total payout of 10p for the year, out of around 11p of EPS, giving a very attractive yield of 10%. Net debt has been reduced since June, when the balance sheet looked in good shape. The company has sold its stake in Johnston to Tarmac but increased its Pressac holding to 23%, causing predictable bid rumours.