TT Electronics faces challenges at US factories in August

TT Electronics, a manufacturer based in Woking, has encountered significant challenges at its US factories, leading to a sharp decline in its share price by over 30%. The company reported operational efficiency issues at two of its American sites, which have resulted in higher production costs than anticipated. This situation has adversely affected the company's trading performance in August, prompting a downward revision of its sales and profit expectations for the year. The operational difficulties have caused a delay in fulfilling recent orders, pushing them into 2025 instead of the originally planned 2024 delivery. As a result, TT Electronics anticipates a reduction in its North American operating profit by between £13 million and £18 million. Additionally, revenues for the second half of the year are expected to be lower by approximately £15 million to £20 million compared to previous forecasts. The company, which serves various sectors including healthcare and aerospace, is taking steps to address these operational challenges. It is focusing on identifying the root causes of the issues and improving factory layout and planning. However, TT Electronics has cautioned that these measures may not fully alleviate the impact of the problems within the current year. Investors have been reassured that the company is committed to resolving these issues and will provide updates on its progress and cost-saving initiatives later in the year. The ongoing recovery in the American components business is described as slow and steady, indicating that the company is navigating a challenging environment.