TT Electronics faces £35 million write-down over US business struggles

In February 2025, TT Electronics, a manufacturer based in Woking, UK, announced significant financial difficulties stemming from its US operations, which have been exacerbated by a decline in demand for components and operational execution challenges. The company revealed that it is preparing to write down as much as £35 million due to these adverse conditions. Additionally, a £6 million adjustment was disclosed relating to previous year results at their Cleveland site. This situation comes after previous warnings about production issues in their US facilities that are expected to affect sales and profit margins for the year ahead. The company's predicament has resulted in a sharp decline in share prices, dropping as much as 16% at one point before settling around 10% lower in trading. The deterioration in demand for components has led TT Electronics to predict that annual earnings for 2024 will likely be at the lower end of its guidance range, estimated to be between £37 million to £42 million. The company anticipates some level of recovery in operating profits for 2025, projecting an adjusted operating profit of between £40 million to £46 million. However, it remains uncertain how soon improvements will materialize. TT Electronics previously faced a failed takeover attempt from Volex, a power products provider. Volex indicated its interest in acquiring TT Electronics through two proposals, the last of which valued the company at approximately £248.6 million. This acquisition effort was terminated after TT Electronics rejected the offers as insufficient, leading to further declines in share price. As they continue to evolve their market strategy, TT Electronics' ability to navigate these challenges will be critical for maintaining investor confidence. The recent financial alert emphasizes the operational issues that TT Electronics has encountered within its North American division, complicating the company's growth outlook. Following an unexpected downturn in orders, the company now has to push certain contracts into 2025 for delivery, significantly impacting its anticipated earnings. A comprehensive improvement plan for the Cleveland site has been launched, acknowledging that the positive effects will take longer to achieve than originally forecasted, further complicating their recovery efforts.