TT Electronics says move of German manufacturing to Romania delayed

Tue Aug 19, 2014 6:05am EDT

* Pretax loss 400,000 stg vs profit 8.9 mln stg

* Revenue flat at 261.1 mln stg

* H1 net debt 14.9 mln stg vs net funds of 26.9 mln stg on Dec. 31

* Interim div raised to 1.7 pence per share from 1.6 pence

* Shares fall as much as 5.2 pct

By Aashika Jain

Aug 19 (Reuters) - British electronic components maker TT Electronics Plc said the transfer of its German manufacturing operations to Romania was taking longer than expected, helping to send its shares down as much as 5.2 percent on Tuesday.

The company, which provides electric-vehicle components and electronic sensors to customers such as BMW and Volkswagen, announced an operational improvement plan in its sensing and control business in January that included shifting manufacturing to low-cost Romania from Germany and the production lines from California to Mexico.

However, TT said that negotiations with trade unions were continuing and that the timing of the shift from Germany to an existing plant in Romania was uncertain.

TT said it was confident the move would proceed in 2015.

The company has said the reorganisation of the sensing and control business, its biggest, will save 8 million pounds ($13.3 million) annually.

Numis analysts said the delay would mean the expected 6 million pounds savings in Europe may not materialise until 2016.

TT, which also caters to the aerospace, defence and medical industries, reported a net pretax loss of 400,000 pounds for the six months ended June 30, compared with a profit of 8.9 million pounds in the same period last year.

Revenue was flat at 261.1 million pounds, with the sensing and control division contributing 143.6 million pounds, an increase of 1.5 percent.

The company's net debt increased to 14.9 million pounds, compared with a net cash balance of 26.9 million pounds as of Dec. 31 and funds of 9 million pounds a year earlier as the company invested in Romania and made a small acquisition.

The debt was much higher than expected, Canaccord Genuity analyst Harry Philips told Reuters.

TT announced an interim dividend of 1.7 pence per share, up from 1.6 pence last year.

The company's shares were down 4.1 percent at 179.25 pence at 1000 GMT. Up to Monday's close, the stock had fallen 5 percent this year. (Reporting by Aashika Jain in Bangalore; Editing by Ted Kerr)

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