- Shares surge 16% on strong first quarter
- Revenue up 15.6%
- Company sticks with full-year guidance despite encouraging start
Combine a beaten down share price and a better-than-expected bit of news and you have the recipe for big share price gains and that’s exactly what has transpired at automotive fluid storage and delivery specialist TI Fluid Systems (TIFS).
The Oxford-headquartered company had already reported an easing of the supply chain problems which had dogged it coming out of the pandemic earlier this year and revenue for the three-month period to 31 March 2023 was up 15.2% year-on-year to €869.8 million.
The company said: ‘With light vehicle production (LVP) volumes increasing by 5.7% in the quarter, revenue outperformance, at constant currency, was 920 basis points (bps). This outperformance was supported by product launches, favourable regional mix as well as our inflationary recoveries which delivered the expected benefits in the first quarter.’
The shares were up 15.6% to 124.8p in response to the update. Both the Fluid Carrying Systems and Fuel Tanks & Delivery Systems divisions performed strongly, while most regions also saw double-digit growth apart from China.
TARGETING CHINESE ELECTRIC VEHICLE MANUFACTURERS
The company expects new platform launches to boost its performance in the country as it benefits from a strategy of targeting Chinese electric vehicle manufacturers.
Despite what CEO Hans Dieltjens described as an ‘promising start’ the company is sticking with the existing full-year guidance.
After a rocky first five-and-a-half years as a public company there may be understandable trepidation about the risks of over-promising and under-delivering. Even after today’s gains the shares are trading at around half the price (250p) at which they listed in October 2017.
Broker Peel Hunt noted that today’s update was ‘an encouraging and robust first-quarter trading update’ which ‘echoed the broader positive signs coming out of the sector through this reporting period’.
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