A CEO's Stake in a Turnaround: Eric Lakin's TT Electronics Gamble

When Eric Lakin stepped into the role of Acting CEO at TT Electronics (LON:TTG) earlier this year, he did more than just assume leadership—he placed a bet on his own ability to turn around the struggling engineered electronics firm. On April 10, Lakin acquired 65,886 shares of the company at £0.759 per share, a purchase totaling approximately £50,000. While the amount may seem modest, the timing and context of this transaction reveal a CEO doubling down on a company facing significant headwinds.

The Transaction: A Symbol of Confidence—or Desperation?

Lakin’s purchase marked the largest insider share buy at TT Electronics in the past 12 months, occurring just weeks after he took the helm following the abrupt resignation of former CEO Peter France. The price paid—£0.759—was slightly below the stock’s recent trading level of £0.76, suggesting Lakin viewed the shares as undervalued.

Yet the broader market has been skeptical. TT Electronics’ shares have fallen 21.5% year-to-date, with a market cap of £147.7 million as of April 2025. The stock’s decline reflects investor concerns over the company’s £22.2 million pre-tax loss in fiscal 2024 and operational challenges in its Components division, which contributes 15% of revenue.

Eric Lakin’s Incentives: Aligning Interests with Action

Lakin’s decision isn’t merely symbolic. His base salary as Acting CEO was raised to £550,000 annually, a 22% increase from his prior CFO role at the company. This compensation structure ties his financial fate to TT’s recovery.

The move also underscores a broader trend: TT insiders have only bought shares in the past year, with no sales, a rare display of unity in a sector riddled with leadership uncertainty. Lakin’s purchase, however, stands out as the most substantial, signaling his personal commitment to stabilizing the firm.

A Company in Flux: Strategic Overhauls and Uncertainties

TT Electronics is at a crossroads. Leadership has announced plans to overhaul its Cleveland manufacturing facility, a critical hub for electronics manufacturing services, and is exploring options for its struggling Components division—including potential divestiture or restructuring. These moves aim to address sub-scale operations and shift focus toward high-growth markets like healthcare and electrification.

Yet execution remains a risk. The Components division’s challenges stem from a downturn in North American manufacturing, and the Cleveland facility’s modernization could strain cash reserves. Meanwhile, the search for a permanent CEO and CFO adds to governance concerns.

Technical and Market Signals: Contradictions and Opportunities

Technical analysts have labeled TT a "Strong Buy", citing undervaluation relative to peers. However, daily trading volumes average just 850,000 shares, a sliver of the liquidity seen in larger firms. This lack of investor interest could amplify volatility if the turnaround falters.

Conclusion: A High-Stakes Gamble with Uneven Odds

Eric Lakin’s share purchase is a bold gesture, but it’s one that hinges on execution. On one hand, his financial alignment with shareholders and the insider buying trend suggest optimism. The company’s focus on high-margin sectors like aerospace and healthcare—markets where TT’s expertise in mission-critical electronics is unmatched—offers a clear path forward.

On the other hand, the stock’s steep decline and recent losses highlight real risks. With insiders holding only £762,000 in total shares (including Lakin’s purchase), the company lacks the broad ownership stakes often seen in successful turnarounds.

Investors must ask: Can Lakin’s financial incentives and operational experience translate into tangible results? The answer will depend on whether TT can swiftly restructure its underperforming segments while capitalizing on emerging markets. For now, the stock sits at a crossroads—a "Strong Buy" on paper but a gamble in practice.

In the end, Lakin’s shares aren’t just an investment; they’re a stake in his own legacy. The market will judge both accordingly.