TI Fluid’s shares spike as firm outperforms soft EV market
Shares at automotive components manufacturer TI Fluid Systems spiked on Thursday despite a dip in revenue as it raised margin guidance and outperformed a weak market.
Revenue at the FTSE-250 listed firm, which designs and manufactures thermal management and fluid handling systems, declined by 1.4 per cent at constant currency in the six months ended June 30 to reach €1,719m (£1,490m).
The company’s share price rose more than 11 per cent in early trades, although it remains nearly 18 per cent below its starting price for the year.
The share price rise can largely be attributed to improvements in the company’s adjusted earnings before interest and tax (EBIT) margin and the fact it has outperformed a weak electric vehicle (EV) market.
The EV market as a whole has been soft in 2024 after a frenzy of activity and hype in the last few years. Manufacturers have blamed high inflation and energy costs.
Adjusted earnings before interest and tax (EBIT) at TI Fluid rose by 4.8 per cent on a constant currency basis, better than analysts’ estimates.
The adjusted EBIT margin rose by 0.4 per cent to 7.9 per cent on continued productivity and efficiency improvements, as well as continued commercial activities.
The fluid storage provider raised its EBIT margin guidance for the full year to 7.6 per cent.
It has also been aided by a varied portfolio: bookings rose by 11 percent to €1.5bn (£1.29), with only around a third of these EV awards.
“[Bookings] highlight the advantages of a product portfolio catering to all propulsions,” chief executive Hans Dieltjens said.
Peel Hunt analysts reiterated a ‘buy’ recommendation for the stock: “Our confidence increases as TI Fluids continues to outperform in a slower market”.
CEO Dieltjens added: “Our first half performance demonstrates strong operational execution, successful strategic delivery and the resilience of our propulsion agnostic portfolio.
“Through our productivity and efficiency measures, we have once again improved our adjusted EBIT margin, making progress towards our mid-term double-digit target.
“We have a strong pipeline of productivity initiatives and are agile to respond to changing market conditions… I am confident that our market-leading positions and ability to adapt to changing market conditions will continue.”