Overview

CT Automotive design, develop and manufacture automotive interior finishes, comprising of static parts and complex kinematic assemblies for the most well-known automotive brands on the planet. There are very few global players in the world that have the expertise, technology, and recognition from automotive companies to develop such crucial mechanical assemblies. With interior content set to increase significantly over the medium term as electric and autonomous vehicles evolve; CT is a net benefit company from such technological innovation. 

CT Automotive is UK headquartered with a global manufacturing footprint and wholly owned production infrastructure with facilities in China (three), Turkey, Czechia, and the UK, employing 2,700 people. The group also has an engineering design office in India and sales and distribution capabilities in the US and Japan. CT Automotive was founded in 2000 and initially focused on European development tooling, CT was able to disrupt the industries status quo with its new low-cost, high-speed model. Within five years of inception CT became a major development tooling company in Europe. From 2007, CT began scaling the barriers to entry and began supplying its first kinematic components system; CT gained traction in the industry by deploying its innovative low-cost, high-speed model. Following on from this, CT Automotive became established as a full systems provider. From 2014, CT has been able to establish its modular low-cost factory footprint in China along with localised assembly facilities in Europe and Mexico.

CT Automotive has strong and long-standing relationships with a number of Tier One suppliers and OEMs including Marelli, Faurecia, Skoda, Ford and Tesla. The Group maintains strategic relationships with all of its key customers and will typically supply multiple platforms for each customer. Through the combination of long-standing customer relationships and the integration of the Group’s products to the vehicle design, CT Automotive aims to become embedded within customer supply chains and product development to progressively expand the range of products supplied. The embedded nature of the products and long production cycles also provides good revenue visibility.

Investment Case

Experienced Management Team

CT Automotive is led by an experienced executive management team with an aggregate of 45 years in the business, all of whom led a management buy-out of the Group from the other founding shareholders. The management team includes Simon Phillips who co-founded the Group in 2000 and Scott McKenzie who joined in 2007 and who was appointed CEO in 2014. Collectively with David Wilkinson, CFO, they have a track record of delivering long-term organic revenue growth.

Specialist market and high barriers to entry

The automotive interior components market is a niche sector supplying specialist components that are required to meet exacting technical and safety standards and are integrated into vehicle designs from the earliest development stages. The market is estimated to be worth $6.5 billion annually with three main global competitors to CT Automotive. The market is characterised by high barriers to entry as a result of customers’ stringent supplier on-boarding requirements and risk aversion resulting from the significant costs that could arise due to production line stoppages in the event that components were not delivered to the requisite quality standards and on time.

Low-cost operating model

Since its formation, CT Automotive has been dedicated to developing a lower cost alternative to longer established and Western based competitors. The core manufacturing and design operations are based in China through a Wholly Foreign-Owned Enterprise (“WFOE”) where the Group is able to benefit from lower cost production processes, labour and plant hardware and has over 50 senior western trained specialist engineers. CT Automotive’s integrated model further allows the Group to reduce the use of subcontractors, lowering costs, development lead times and increasing flexibility. This lower cost operating model provides a competitive advantage over the Group’s main competitors which are highly invested in developed economies.

Embedded relationships and visibility of earnings

The components produced by CT Automotive are designed into vehicles with the tooling required to manufacture each unit being bespoke to each part. Furthermore, the Group is typically the sole supplier of each component over the course of any given vehicle production cycle with significant cost implications of changing suppliers effectively preventing mid-cycle supplier changes. This gives the Group good visibility over future production revenue, subject to vehicle production volumes. The Group has a strong track record of customer retention, providing parts to subsequent model generations, and has long standing, embedded relationships having never lost an OEM client. New customer wins and the supply of increasing content to existing customers across a growing range of models and geographies drive long-term revenue growth.

Low market penetration and opportunity to gain market/wallet share

Despite strong growth to date, the Directors believe that there are significant growth opportunities with the Group currently supplying components to eight per cent. of vehicle platforms produced annually in 2020. Based on FY20 production, the Directors estimate that the Group currently has 2 per cent. of market share by total OEM spend on the types of parts it supplies. The Group has a track record of winning new clients and expanding its relationships to progressively supply an increasing number of components per car. On average, the Group currently supplies $20 of components per car with the potential to increase the value of components as the relationship expands. The Directors believe that there is potential to increase the average value per car to $75 based on existing longstanding relationships where the Group has progressively expanded the range of components supplied.

Track record of profitable growth and cash generation

Over the 10 years to the year ended 31 December 2019, being the year prior to Covid-19, the Group’s Serial Production revenue grew at a CAGR of 30 per cent. Over this period the Group has a track record of winning new business both from adding new customers and new platforms. This growth has largely been self-funded from operating profits and the Group’s cash flow with an average operating cash conversion of 70 per cent. in the last 4 years.

Withstanding the impact from lower global production, the Directors believe that the Group is well positioned to continue to grow and win new market share as global production recovers over the next 12 months with an easing of semiconductor shortages with potential also for improved purchasing terms arising from additional balance sheet strength.

Regulatory News

Documents

Download Admission Document

Download Articles of Association Document

Download Term of reference for audit and risk committee

Download Terms of reference for remuneration committee

Download Notice of AGM 2022

Reports

Download CT Automotive Annual Report 2021

Presentations

2022

Download CT Automotive H1 2022 Results Presentation

2021

Download CT Automotive 2021 Results Presentation

Board of Directors

Simon Phillips – Founder & Executive Chairman

Simon co-founded CT Automotive in 2000 having identified an opportunity to disrupt the automotive tooling market. He led the business as Chief Executive Officer until 2014, developing the business model from its original tooling focus into the global Serial Production operation it is today. Following the appointment of Scott McKenzie as Chief Executive Officer, Simon has focused on driving the continued growth of CT Automotive and identifying new strategic opportunities.

Simon was a shareholder in an injection moulding company in the UK prior to exiting that business and co-founding CT Automotive. Simon has an engineering background having studied Mechanical Engineering at Portsmouth University, with a specific emphasis on sub-sonic to super-sonic flight.

Scott McKenzie – Chief Executive Officer

Scott joined CT Automotive from Magna International in 2007, following a career in automotive interior development and program management. Upon joining, Scott quickly progressed to Operations Director before being appointed as Group Managing Director in September 2014.

Scott’s background included specialisation in new product development and manufacturing operations in the Far East since 2001. Scott’s academic background was in Polymer Sciences and Technologies.

David Wilkinson – Chief Financial Officer

David is a Chartered Accountant and during his 11 years in practice worked across a range of disciplines including Audit, Tax, Business Services and Corporate Finance and dealt with a wide range of companies both large and small.

He began advising CT Automotive on strategy, M&A opportunities and funding in 2004, and was then invited to join CT Automotive as Group Finance Director in 2011.

Prior to CT Automotive he spent seven years as an M&A adviser at BDO, specialising in selling businesses and executing Management Buy-Outs for clients across a wide range of sectors.

Tracey James – Senior Independent Non-Executive Director

Tracey is a Chartered Accountant who has spent 26 years with Grant Thornton UK LLP, with the last 14 years as an Audit Partner. Tracey was a member of Grant Thornton’s Oversight Board and also served on the Audit & Risk and Pensions Committees. She was also previously Finance Director of Karl Storz Endoscopy Canada (1999-2000). Tracey is currently a Non-Executive Director and Chair of the Audit Committee at Gattaca plc, as well as a Non-Executive Director of ECO Animal Health.

Tracey has also previously held Non-Executive Directorships at Places for People Group Limited and Activate Learning, where roles included the Chair of the Audit Committee.

Francesca Ecsery – Non-Executive Director

Francesca has over 20 years’ experience as a director of both public companies and start-ups in the digital, retail, fast-moving consumer goods and leisure industries. She is a Harvard MBA, fluent in five languages and has special expertise in multi-platform consumer marketing, branding and sustainable commercial strategies.

Francesca is also a Non-Executive Director of Marshall Motors plc, Société Air France SA, F&C Investment Trust plc and the Association of Investment Companies. Her previous executive experience includes McKinsey, PepsiCo, Thorn EMI, Thomas Cook and STA Travel.

Raymond Bench – Non-Executive Director

Ray has worked in the global automotive industry for the past 30 years; 12 of which were spent working for a Chinese OEM. He is an experienced automotive design engineer with extensive knowledge of automotive design processes.

Ray has significant experience of business and departmental management, including having been part of Shanghai Motor UK Technical Centre’s UK senior leadership team. Ray’s experience also includes leadership roles at MG Rover Group, Rover Group, and Land Rover.

Governance

CT Automotive manages its operations with the future in mind and adheres to the highest levels of corporate governance and responsible conduct practices. The board leads the company and ensures it is on the correct track to grow sustainably and benefit all its stakeholders as well as the communities it operates in. The Directors support high standards of corporate governance and have decided to comply with the QCA Code. Details of how the Company will comply with the QCA Code are detailed in the Principles page.

Audit and Risk Committee

The audit and risk committee will, among other things, determine and examine matters relating to the financial affairs of the Company including the terms of engagement of the Company’s auditors and, in consultation with the auditors, the scope of the audit. It will receive and review reports from management and the Company’s auditors relating to the half yearly and annual accounts and the accounting and the internal control systems in use throughout the Company. The audit and risk committee will also advise the Board on the Group’s overall risk appetite and strategy including, inter alia, regularly reviewing and updating (if appropriate) the risk assessment processes in place, including in relation to remuneration and compliance functions, and assisting in overseeing implementation of the adopted strategy.

Members: Tracey James (Chair), Francesca Ecsery, Raymond Bench

Remuneration Committee

The remuneration committee will review and make recommendations in respect of the Executive Directors’ remuneration and benefits packages, including share options and the terms of their appointment. The remuneration committee will also make recommendations to the board concerning the allocation of share options to employees under the intended share option schemes.

Members: Francesca Ecsery (Chair), Tracey James, Raymond Bench

The board consists of three executive and three non-executive chairmen / chairwomen. This diverse Board of Directors provide various perspectives through their different skills and experiences.

Principle 1: Establish a strategy and business model which promote long-term value for shareholders

The Group’s business model and strategy is set out in Part I of the Admission Document. The Board will hold  at least one session each year dedicated to strategy, which will include input from senior members of the CTAutomotive team and any necessary external advisers. A strategic report reflecting the outcome of such sessions will be included in the Company’s annual report and accounts.
The principal risks facing the Group are set out in Part II of the Admission Document. The Board will identify and deploy mitigation steps to manage these risks and confront day-to-day challenges of the business post-Admission. See in addition Principle 4 below.

Principle 2: Seek to understand and meet Shareholder needs and expectations

The Board is committed to open and ongoing engagement with the Shareholders. The Board will communicate with Shareholders through:

• the annual report and accounts;
• the interim and full-year results announcements;
• trading updates (where required or appropriate);
• the annual general meetings; and
• the Company’s investor relations website (in particular, the “RNSNews” and “AIM Rule 26” pages).

From Admission, David Wilkinson will be the primary contact for Shareholders and there will be a dedicated e-mail address for shareholder questions and comments.
Regular meetings will be held between the Executive Chairman, Chief Executive Officer, Chief Financial Officer and institutional investors and analysts to ensure that the Company’s strategy, financials and business developments are communicated effectively.
The Board intends to engage with Shareholders who do not vote in favour of resolutions at annual general meetings to understand their motivation.

Principle 3: Take into account wider stakeholder and social responsibilities and their implications for long-term success

The Group takes its corporate social responsibilities very seriously and is focused on maintaining effective working relationships across a wide range of stakeholders including employees, existing and new customers and supplies, in order to achieve long-term success.
The Executive Directors will maintain an ongoing dialogue with stakeholders to inform strategy and the day-to-day running of the business.

Principle 4: Embed effective risk management, considering
both opportunities and threats, throughout the organisation

The principal risks facing the Group and the industry in which it operates are set out in Part II of the Admission Document. These risks will be reviewed at least once a year and included in the annual report and accounts.

Principle 5: Maintain the board as a well-functioning, balanced team led by the chair

On Admission, the Board will comprise six directors:

• Tracey James, Raymond Bench and Francesca Ecsery as Non ExecutiveDirectors; and
• Simon Phillips, Scott McKenzie and David Wilkinson’s Executive Directors. The biographies of the Directors
  are provided in Part I of the Admission Document.

Tracey James, Raymond Bench and Francesca Ecsery are considered by theBoard to be independent Non-Executive Directors and were selected with the objective of bringing experience and independent judgement to the Board.
The Board has been constructed to ensure that it has the right balance of skills, experience, independence and knowledge of the business.
The Board is also supported by the Audit and Risk Committee and Remuneration Committee. Details of these committees are set out in Part I of the Admission Document.
The Board will meet regularly and at least eight times a year. Processes are in place to ensure that each member of the Board is, at all times, provided with such information as is necessary for him/her to discharge his/her duties.
The Group is satisfied that the current Board is sufficiently resourced to discharge its governance obligations on behalf of all stakeholders.

Principle 6: Ensure that between them the directors have the necessary up-to-date experience, skills and capabilities

The skills and experience of the Directors are summarised in their biographies set out in Part I of the Admission Document.
The Directors believe that the Board has the appropriate balance of diverse skills and experience in order to deliver on its core objectives. The Board is not dominated by one individual and all Directors have the ability to challenge proposals put forward to the meeting, democratically. The Directors have also received a briefing from the Company’s Nominated Adviser in respect of continued compliance with, inter alia, the AIM Rules and the Company’s Solicitors in respect of continued compliance with, inter alia, UK MAR.

Principle 7: Evaluate board performance based on clear and relevant objectives, seeking continuous improvement

The Chair is responsible for ensuring an effective Board. Post-Admission, the Company intends to establish a formal process for evaluating the performance of the Board, the committees, and the individual Directors against its objectives to ensure that members of the Board provide relevant and effective contribution.

Principle 8: Promote a corporate culture that is based on ethical values and behaviours

The Group promotes a culture of integrity, honesty, trust and respect and all employees of the Group are expected to operate in an ethical manner in all of their internal and external dealings. The staff handbook and policies promote this culture and include such matters as whistleblowing, social media, anti-bribery and corruption, communication and general conduct of employees.
The Board takes responsibility for the promotion of ethical values and behaviours throughout the Group, and for ensuring that such values and behaviours guide the objectives and strategy of the Company.

Principle 9: Maintain governance structures and processes that are fit for purpose and support good decision-making by the board

The Chair leads the Board and is responsible for its governance structures, performance and effectiveness. The Non-Executive Directors are responsible for bringing independent and objective judgement to Board decisions. The Executive Chairman is the primary contact for the Company’s Shareholders and is responsible for ensuring that the link between the Board and the shareholders is strong and efficient. The Executive Directors are responsible for the operation of the business and delivering the strategic goals agreed by the Board.
The Board is supported by the Audit and Risk Committee and Remuneration Committee. Details of these committees and their responsibilities are set out in Part I of the Admission Document. From time to time, separate committees may be set up by the Board in order to consider and address specific issues, as and when they arise.
The Board intends to review the governance framework on an annual basis to ensure it remains effective and appropriate for the business going forward.

Principle 10: Communicate how the Company is governed and is performing by maintaining a dialogue with Shareholders and other relevant stakeholders

The Company intends to use the following principal methods of communication with its Shareholders:

• the annual report and accounts;
• the interim and full-year results announcements;
• trading updates (where required or appropriate);
• the annual general meetings; and
• the Company’s investor relations website (in particular, the “RNS News”and “AIM Rule 26” pages which will go live on Admission).

The Company’s website is updated on a regular basis with information regarding the Group’s activities and performance. The Company’s reports, presentations, notices of annual general meetings, and results of voting at shareholder meetings will also be made available on the website.

Last Reviewed – 23rd December 2021

Shareholder Information

There are 50,933,289 shares in issue. 75.9 per cent. of shares are not in public hands.

Last reviewed – 25th August 2022

Advisors and Contact

Media Enquiries
media@ct-automotive.net
MHP Communications: CTAutomotive@mhpc.com
+44 (0) 20 3128 8540

ESG

Creating a sustainable business that allows each of its stakeholders to prosper. 

The Directors recognise the importance of Environmental, Social and Governance (ESG) and the Group is committed to adopting best practice actions and reporting. CT Automotive’s focus on a leadership strategy co-exists with a strong commitment to the safety and welfare of staff, a sustainable approach to environmental practices, and a strong governance framework.

There are three key areas that comprise CT Automotive’s strategy on sustainability:

• Taking care of the environment and reducing our carbon footprint
• Looking after of our people and the communities around us
• Forward-thinking management to ensure longevity for the business

ESG considerations and reporting currently fall under the remit of the Audit and Risk Committee of the Board. The Directors intend to monitor progress and may implement a formal ESG policy, strategy and committee. The Directors recognise that the Group’s ESG reporting will evolve over time and the Group is collecting data from across the Group as it develops its strategy. CT Automotive has also engaged EcoVadis to undertake a full sustainability report of the Group’s operations.

Governance:

CT Automotive manages its operations with the future in mind and adheres to the highest levels of corporate governance and responsible conduct practices. The board leads the company and ensures it is on the correct track to grow sustainably and benefit all its stakeholders as well as the communities it operates in.

The board consists of three executive and three non-executive chairmen / chairwomen. This diverse Board of Directors provide various perspectives through their different skills and experiences.

Social:

CT Automotive has been built upon the values of passion and excellence, these values remain at the core of the company’s culture today; this is made possible by the tireless team effort from all of CT employees. CT Automotive understands how integral its staff are to the business, this is why during the UK lockdowns CT initially supported its staff with full pay and has continued its support of working from home, ensuring staff are as comfortable as possible. As for those coming into the office, CT has taken the appropriate steps to implement new health and safety directives to prevent the spread of the COVID-19 Virus.

CT Automotive is also a proud sponsor of Wyvern Under 10 Youth Teams; providing the equipment that the teams need to train and play. As well as sponsoring the teams, on the weekends CT Automotive’s CFO, David Wilkinson, coaches one of them. With grassroots football being such a big part of the local community and so many of its teamworking skills and values resonating with CT Automotive, it is something the Group takes great pride in being a part of.

At CT Automotive there is a diverse range of staff, with all ages, genders, ethnicities, and religions being employed; all working together as one big team. CT also operates an apprenticeship scheme and offers staff the chance to progress their learning with further qualifications such as ACCA.

Employee gender split:

• UK: 34% female, 66% male. 97% full-time, 3% part-time.
• US: 50% female, 50% male. 83% full-time, 17% part-time.
• TK: 63% female, 37% male.
• SZ: 40% female, 60% male.
• GZ: 48% female, 52% male.
• Total: 46% female, 54% male.

Environment:

CT Automotive is aware of its impact on the environment and is striving to reduce it at all levels of the of the business. CT Automotive currently does this through recycling, offering remote working where possible, regrinding materials, and using an energy provider with 50% renewable energy.

• Remote working is offered to employees to reduce the emissions produced through commuting daily into the office.
• Materials are reground and recycling practices are followed to reduce waste and become a more circular business.
• Our UK energy provider uses 50% renewable energy, more than the UK average; this is another effort in CT Automotive’s journey to becoming more circular.

CT Automotive is currently looking into how it can offset its carbon footprint to reduce its impact on the environment; and, in a further effort to become a more circular business, CT Automotive is looking to switch to a 100% renewable energy provider in the UK. CT Automotive has also engaged EcoVadis to undertake a full sustainability report of the Group’s operations.

AIM Rule 26

The information contained within this section of this website is disclosed for the purposes of AIM Rule 26.

• Business description:
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• Board of directors:
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• Responsibilities:
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• Country of incorporation
  • United Kingdom
• Main country of operation
  • China
• Constitutional documents
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• UK City Code on Takeovers and Mergers:
  • The Company is subject to the UK City Code on Takeovers and Mergers
• Securities Information:
  • The securities of the Company are traded on the AIM market operated by the London Stock Exchange plc. Its shares have not been admitted, nor have any applications been made, for any of its shares to be admitted or traded on any other exchanges or trading platform
• Number of shares in issue
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• Percentage of shares not in public hands
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• Details on any restrictions on transfer of shares
  • There are currently no restrictions on the transfer of securities
• Significant shareholders
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• Notifications
  • All notifications the Company has made in the past 12 months can be found here
• Advisers
  • Details of the Company’s advisers can be found here