TT Group results beat expectations

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The Independent Online
TT Group, the acquisitive electronic engineer headed by two ex-Hanson executives, impressed the stock market yesterday with better-than-expected profit figures.

Pre-tax profit grew 14 per cent to pounds 16.6m, pounds 400,000 ahead of the prediction from Albert Sharp, the Birmingham broker.

John Newman, joint chief executive, said most of the growth came as it turned around Crystalate, the resistors and sensors manufacturer TT bought in 1990.

Earnings per share rose 11 per cent to 16.8p compared with 15.1p. Trading profit margins, however, fell from 11.4 to 11.3 per cent.

Last summer TT bought Magnetic Materials for pounds 12m and in January this year it acquired AB Electronics for pounds 13m. However, Mr Newman said the company would concentrate on maximising profits from its recent acquisitions, rather than looking for further purchases.

It bought stakes in two other engineers, ML Holdings and Renold, but has since sold most of its interests. It made pounds 500,000 from the Renold holding, but lost money on ML.

AB, which became part of the group only after the year end, could more than double turnover. Latest figures show it had sales of pounds 180m but lost money. TT's sales were pounds 171m in 1992 compared with pounds 158m.

Mr Newman said he was comfortable with borrowings at pounds 33m, equivalent to 54 per cent of net assets. The company also has pounds 10m worth of convertible preference shares.

The total dividend is up 9 per cent at 6p. The shares rose by 8p yesterday to 254p. Earlier this month they hit a record 275p. In the last three years the shares have outperformed the FT All- Share index by 70 per cent.