Interim Management Statement

RNS Number : 1542P

Senior PLC

22 October 2012

 



Interim Management Statement

Senior plc ("Senior" or "the Group"), an international manufacturer of high technology components and systems, principally for the worldwide aerospace, defence, land vehicle and energy markets, issues this interim management statement for the period since 1 July 2012 (the "period").

Trading and Financial Position

Overall trading was positive during the period with the Group's adjusted profit before tax in line with the Board's expectations.  Cash generation remained strong, with net debt at the end of September of £68m being £25m lower than at the start of the year.

Markets and Operations

Senior operates through two Divisions: Aerospace (64% of H1 2012 Group sales) and Flexonics (36% of H1 2012 Group sales).  Overall, market conditions in the period were broadly as anticipated at the time of the Half Year Results announcement in late July.  The large commercial aircraft market, Senior's most important segment, was strong and shipments of industrial expansion joints were at healthy levels, whereas the aerospace military & defence, European passenger vehicle and North American truck markets became more challenging during the period.

The large commercial aircraft market, which accounts for half of the Aerospace Division's revenue, remains healthy, with Airbus and Boeing delivering a combined 841 aircraft in the first nine months of 2012.  This represents an increase of 16% over the 723 aircraft delivered in the same period of 2011.  23 Boeing 787 aircraft have been delivered this year compared to one in the first nine months of 2011, with Boeing remaining confident of increasing production to ten 787 aircraft per month towards the end of 2013. Airbus and Boeing's combined year-to-date net order intake of 1,191aircraft (nine months 2011: 1,464 aircraft) was again well in excess of deliveries and their resultant order books, in excess of seven years at current build rates, continue to provide a strong foundation for future growth.

Elsewhere in the Aerospace Division, demand for regional and business jets remained broadly stable with Senior's activity increasingly focused on supporting future programmes such as Bombardier's CSeries 110 to 130 seat passenger aircraft, Bombardier's L85 business jet and the Mitsubishi Regional Jet.  Increased engineering resources are also being directed towards the new single-aisle Airbus 320neo and Boeing 737Max passenger aircraft, both representing more efficient derivatives of existing best-selling aircraft which are due to enter into service in a few years time.  Unsurprisingly, given Governmental budgetary constraints, the level of shipments for some of the Group's military & defence programmes, such as the Black Hawk helicopter, eased down during the period and the outlook for other programmes, such as the C130J military transport aircraft, began to soften.

The Flexonics Division delivered a strong profit performance in the period, despite weaker demand in its principal land vehicle markets in Europe and North America, as a result of lower material costs (principally stainless-steel), a healthy level and advantageous mix of non-European industrial sales and a continued focus on efficiency improvements.

In line with the Group's strategy to grow its presence in Asia and to focus its business portfolio on niche growth markets, the Group's joint venture in China, to produce emission related products for the local heavy-duty engine market, was launched officially in August.  Furthermore, as previously announced, the Group's only construction-facing operation, Senior Hargreaves, was sold to the M+W Group on 16 October.  The Group continues to target a select number of complementary acquisitions, in both Divisions, to accelerate growth and enhance its overall asset portfolio, whilst maintaining a strong financial position.

Outlook

With market conditions largely as anticipated, although increasingly challenging in some areas, the Board continues to expect 2012 adjusted profit before tax⁽¹⁾ to be in line with its previous expectations.  Assuming no further deterioration in market conditions, the Board believes the Group is positioned to make further progress in 2013 and beyond.

Other

Later today, Senior is hosting a capital markets event for investors and analysts, which will include presentations by management focussing on the Group's Flexonics Division.  There will be no further update on current trading.

The Group intends to issue its 2012 full year results announcement on Monday 25 February 2013.

Note:
1.	Adjusted profit before tax is before loss/profit on sale of fixed assets, acquisition costs and amortisation of intangible assets arising on acquisitions.

Further information

Mark Rollins	Group Chief Executive, Senior plc	[phone]
Simon Nicholls	Group Finance Director, Senior plc	[phone]
Philip Walters	Finsbury Group	[phone]

About Senior

Senior is an international manufacturing group with operations in 13 countries.  It is listed on the main market of the London Stock Exchange (symbol SNR).  Senior designs, manufactures and markets high technology components and systems for the principal original equipment producers in the worldwide aerospace, defence, land-vehicle and energy markets.  Further information on Senior plc, may be found at: www.seniorplc.com

Cautionary Statement

This announcement contains certain forward-looking statements.  Such statements are made by the Directors in good faith based on the information available to them at the time of the announcement and they should be treated with caution due to the inherent uncertainties underlying any such forward-looking information.

 

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