Measuring TT Electronics plc’s track record of past performance is an insightful exercise for investors. It enables us to reflect on whether the company has met or exceed expectations, which is a powerful signal for future performance. Below, I will assess TTG’s recent performance announced on 31 December 2018 and compare these figures to its historical trend and industry movements. TTG’s trailing twelve-month earnings of UK£13m has declined by -17% compared to the previous year.
Well, let’s take a look at what’s going on with margins and whether the whole industry is feeling the heat. More In terms of returns from investment, TT Electronics has fallen short of achieving a 20% return on equity , recording 4.7% instead. Furthermore, its return on assets of 3.1% is below the GB Electronic industry of 7.4%, indicating TT Electronics’s are utilized less efficiently. And finally, its return on capital , which also accounts for TT Electronics’s debt level, has declined over the past 3 years from 5.1% to 4.5%.
This correlates with an increase in debt holding, with debt-to-equity ratio rising from 14% to 29% over the past 5 years. TT Electronics’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. Companies that are profitable, but have volatile earnings, can have many factors impacting its business. This may not be consistent with full year annual report figures.
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