TT Electronics has reported a sharp improvement in first-half profitability as restructuring and manufacturing changes carried out during 2025 begin to feed through to operating performance. Adjusted operating profit rose 37% on an organic basis to £18.5 million in the six months to 30 June 2026, while adjusted operating margin increased by 230 basis points to 8.1%. Revenue was £228.1 million, down 2.7% organically, although the company said underlying revenue increased by 4% after excluding the effects of the Plano closure and a major customer production transfer from Suzhou to Kuantan.
The figures give more weight to a manufacturing reset that has included closing loss-making capacity, stabilising underperforming operations, and reorganising the business around three divisions: Power, Electronic Manufacturing Services, and Components. TT said the turnaround of its Cleveland operation is complete and that the site was profitable throughout the period, while production at Plano ceased at the end of 2025. The transfer of a major EMS customer’s production from Suzhou in China to Kuantan in Malaysia has also been completed, with higher volumes expected at the Malaysian site during the second half.
That transfer distorted the half-year comparison. TT attributed a £14 million year-on-year revenue reduction to the move, reflecting safety stock built ahead of the transfer, while EMS revenue fell 8.3% on a constant-currency basis to £94.1 million. Excluding the transfer effect, EMS sales would have risen by about 7%. Adjusted operating profit for the division increased to £7.4 million from £4.1 million, lifting its margin to 7.9% from 4.0% as operational performance improved at Cleveland and scrap and rework reduced.
Components also returned to profit after the Plano closure. Revenue increased 5.8% organically to £36.7 million, while adjusted operating profit reached £1.0 million compared with a £1.9 million loss in the first half of 2025. Order intake rose 26%, or 37% excluding Plano. The board is still evaluating a potential divestment of the division after completing its strategic review, leaving TT to improve an operation at the same time as it considers whether Components remains the best fit for the group.
The cost programme is now substantially complete, with approximately £3 million of net savings expected in 2026 and annualised savings of more than twice that amount from 2027. Management has also been tightening sales discipline and pipeline management, producing a group book-to-bill ratio of 112% in the first half. That order position is important because the restructuring phase has removed part of the internal drag on performance; the next requirement is to keep the revised manufacturing footprint productively loaded across sites.
New programme wins are starting to add to that workload. TT has secured agreements across aerospace, defence, life sciences, and the semiconductor supply chain, including a multi-year agreement with Rolls-Royce covering high-reliability power electronics for large civil aircraft engines. After the period end, it also signed a letter of intent with MBDA. These are markets where qualification cycles and programme lives are long, making yield, delivery discipline, and manufacturing consistency as important as the headline value of the order book.
The Power division remained the group’s largest operation, with first-half revenue of £97.3 million and adjusted operating profit of £13.8 million. Demand from aerospace and defence customers remained strong, although delays in finalising customer agreements shifted some revenue into the second half. TT also reported progress implementing silicon carbide technology at its Bedlington site for next-generation electric aircraft systems, adding another production requirement to a business already balancing new programmes with restructuring.
Balance-sheet indicators improved alongside the operational work. Net debt excluding lease liabilities stood at £52.0 million at the half year, compared with £73.3 million a year earlier, while leverage fell to 1.1 times from 1.9 times. Free cash flow was slightly negative at £0.4 million as the group invested in inventory ahead of expected second-half growth, and management expects cash conversion to improve later in the year.
The board now expects full-year adjusted operating profit to exceed the market expectations in place before the results, with company-compiled consensus at £35.0 million. Organic revenue is expected to return to growth in the second half, supported by the order book and the ramp-up of transferred production. After a year dominated by closures, transfers, and remedial work, TT has reached the harder part of the exercise: proving that the revised footprint can deliver repeatable margins while new programmes move from contract announcements into factory output.
