Trading Statement

RNS Number : 0530L

Senior PLC

23 April 2015

 



Trading Update

Ahead of its Annual General Meeting on Friday 24 April, 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 trading update for the period since 1 January 2015 (the "period").

Trading and Financial Position

During the period, demand in the Group's principal markets was largely as anticipated at the time of the 2014 results announcement on 2 March 2015.  Overall, the Group's adjusted profit before tax⁽¹⁾ for the first three months of the year was consistent with the Board's expectations, as the impact of a number of near-term challenges was offset by beneficial foreign exchange rates.

In the Aerospace Division, activity in the Group's most important market, large commercial aircraft, remained healthy with Boeing and Airbus delivering a combined 318 aircraft in the first three months of 2015, 5% ahead of 2014.  Against this backdrop, progress was made in industrialising new aerospace programmes, although at a slower rate than anticipated.  The Group also saw lower aluminium prices in the quarter reduce the income received from machined metal waste compared to the prior year.

In the Flexonics Division, North America truck volumes continued to be strong, although there was some softening in the market for agricultural and mining vehicles, and industrial activity in Europe and Brazil remained subdued.

Net debt increased to £130m at the end of March, due to the normal seasonal increase in working capital and capital expenditure of 1.6 times depreciation.  As previously announced on 1 April, the acquisition of Lymington Precision Engineering ("LPE") resulted in net debt subsequently increasing by £55.8m, being the initial consideration of £45.8m and the payment, into escrow, of £10.0m of contingent "earn-out" consideration.  With net debt at 1.3 times EBITDA⁽²⁾ following the acquisition, the Group remains well funded.

Outlook

Overall, the Board's expectation for 2015 full-year adjusted profit before tax⁽¹⁾ remains unchanged at current exchange rates, although more second half weighted than historically.

Progress is expected to be made across the Group during 2015, albeit the previously announced decline in A330 build rates is now likely to impact the Group sooner than originally anticipated, a number of new aerospace programmes are taking longer to increase build rates and the lower oil price is adversely impacting the rate of conversion to natural gas engines in North America.  However, offsetting these, the North American truck market is ahead of the prior year and foreign exchange movements are currently beneficial.

Looking further ahead, aircraft build rates are scheduled to resume their upward trend in the near term, Senior's global footprint is providing encouraging opportunities to increase market share and improvements in operational efficiency can be expected as production rates regularise.  Accordingly, the Group remains well positioned to make further progress in 2016 and beyond.

Other

The results for the six-month period to 30 June 2015 will be announced on Monday 27 July 2015.

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.
2.	EBITDA is earnings before interest, tax, depreciation and amortisation.

Further information

Mark Rollins	Group Chief Executive, Senior plc	[phone]
Derek Harding	Group Finance Director, Senior plc	[phone]
Bindi Foyle	Head of Investor Relations & Leadership Development, Senior plc	[phone]
Philip Walters	Finsbury	[phone]

Note to Editors

Senior is an international manufacturing Group with operations in 14 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 trading update 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 trading update and they should be treated with caution due to the inherent uncertainties underlying any such forward-looking information.

 

END

 

 

TSTDMGZDVZMGKZM