FY20 Post-close Market Update

RNS Number : 6141L

Senior PLC

14 January 2021

 

14 January 2021

Senior plc: FY20 Post-close Market Update

Senior plc ("Senior" or the "Group"), an international manufacturer of high technology components and systems, principally for the worldwide aerospace & defence, land vehicle and power & energy markets, today issues this market update for the year ended 31 December 2020 (the "Period").

Key Points

·	Q4 performance was slightly ahead of the Board's previous expectations
·	Strong cash inflow helped reduce net debt (including IFRS 16 leases) by approximately £23m
·	There is no change to our view of end market dynamics since our November 2020 trading update

Trading update

Q4 performance was slightly ahead of the Board's previous expectations, although the lower level of activity first seen in Q2 2020, due to the impact of COVID-19 on some of our key end markets, persisted for the remainder of 2020.  For the full year 2020, subject to audit, revenue is likely to be around £733m and we anticipate the adjusted loss before tax⁽¹⁾ to be slightly better than previous expectations.

In Aerospace, sales are expected to be around 37% lower year-on-year on a constant currency basis which reflects the impact of COVID-19 and the 737 MAX situation.  On a quarterly basis, Aerospace sales declined 22% in Q1, 40% in Q2, 45% in Q3 and around 39% in Q4 year-on-year.  On a sequential basis, Aerospace sales in Q4 improved by around 11% relative to Q3 as civil aerospace sales stabilised and Aerospace Division sales to other end markets (space and semi-conductor equipment) improved.

In Flexonics, sales are expected to be around 24% lower year-on-year on a constant currency basis.  On a quarterly basis, Flexonics sales declined 23% in Q1, 33% in Q2, 25% in Q3 and around 13% in Q4 year-on-year.  On a sequential basis, Flexonics sales in Q4 were around 10% above Q3.  The performance in Q4 benefited from the partial recovery in the heavy-duty truck and passenger vehicle markets.

There is no change to our view of end market dynamics in 2021 since our Q3 Trading Update on 3 November 2020.  Given the ongoing and unpredictable nature of the pandemic, our view remains that it is likely to be 2022 before we see a meaningful recovery in Group revenues and in 2021, Aerospace is set to be at least as challenging as 2020 given the current customer-announced production rates.

Management actions

Our restructuring programme is progressing to plan and is delivering the expected benefits.  We are continuously reviewing our plans and taking actions where appropriate in response to prevailing market conditions.  Since our last trading update, we have taken the decision to close our small Flexonics Upeca business in Malaysia which serves the oil & gas sector and we expect to have completed the bulk of closure activities during Q1 of 2021.

Liquidity

Throughout 2020 we maintained a relentless and effective focus on cash preservation and liquidity.  The Group generated around £23m net cash inflow in 2020: our actions on working capital management and controls over capital expenditure have, in particular, benefited this year's cash result.  This strong cash flow performance allowed the Group to reduce net debt and broadly maintain headroom whilst repaying the £15m ($20m) US Private Placement Note that matured in October 2020.  Net debt (including IFRS 16 leases of £77m) is expected to be around £206m at 31 December 2020, with headroom on our committed borrowing facilities of £157m.  We remain comfortably within our agreed covenant levels.

Notes

This announcement contains inside information.

⁽¹⁾ Adjusted loss before tax is before amortisation of intangible assets from acquisitions, goodwill impairment, restructuring and disposal activities.

Further information

Bindi Foyle	Group Finance Director, Senior plc	[phone]
Jennifer Ramsey	Director of Investor Relations, Senior plc	[phone]
Richard Webster-Smith	Finsbury	[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 power & 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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