Interim Management Statement

RNS Number : 5896U

Senior PLC

19 October 2010

 



Senior plc

Interim Management Statement for the three months ended 30 September 2010

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 three-month period ended 30 September 2010 (the "third quarter").

Trading and Financial Position

Trading during the third quarter was healthy with the Group's adjusted profit before tax coming in slightly ahead of the Board's expectations, largely because of a stronger profit performance from the Flexonics Division.  Cash generation remained strong, with net debt at the end of September being below the £87.4m at the end of June, despite the acquisition of WahlcoMetroflex in the quarter for £8.5m.  The improvement in the level of net debt was assisted by the sale of excess property at the Group's Senior Hargreaves operation for £1.7m in September.

Markets and Operations

Senior operates through two Divisions: Aerospace (59% of H1 2010 Group sales) and Flexonics (41% of H1 2010 Group sales).

Within the Aerospace Division's principal market, production of large commercial aircraft remained healthy with Boeing and Airbus delivering a combined 726 aircraft in the first nine months of 2010 (nine months 2009: 717 aircraft).  Encouragingly, the combined Boeing/Airbus gross YTD order intake of 824 aircraft was ahead of deliveries and well above the 330 aircraft ordered during the same period of 2009.  This renewed market strength has led Boeing and Airbus to announce future build-rate increases for many of Senior's key aircraft programmes.  In addition, Boeing announced that its 787 aircraft, an important future programme for Senior, is now scheduled to start to be delivered to customers during the first quarter of 2011, albeit a couple of months later than previously expected.  Elsewhere in the Aerospace Division, markets also followed the anticipated trends: the Group's main defence programmes, such as the Black Hawk helicopter and C130J military transport aircraft, remained strong, the regional jet market weakened further, whilst the business jet market was more mixed, with demand for larger business jets more robust than for smaller aircraft.

The Flexonics Division performed better than anticipated during the third quarter with the improvement, from a very low base, in the European and North American heavy truck markets benefiting the Group.  However, the benefits were modest, due to the continuing unwinding in North America of the emission legislation led spike in engine build-rates seen in the final quarter of 2009 and the relatively low, but growing, presence the Division has in the European truck market.  Overall, industrial markets were satisfactory with an improved order intake for the Group's important large expansion joint business resulting in a more moderate decline in profitability than had been anticipated for this operation.  Passenger vehicle demand was broadly as predicted with the Group's main, largely French, end customers experiencing a weakening in demand during the quarter.

Outlook

The stronger than expected third quarter contribution from the Flexonics Division and a solid outlook for the final quarter, now lead the Board to expect 2010 adjusted profit before tax⁽¹⁾ to be at the top end of current market expectations⁽²⁾.

Other

Later today, Senior is hosting a capital markets event for investors and analysts, which will include presentations by management on the Group, its markets and its strategy.  There will be no further update on current trading.  In addition, the Group intends to issue a pre-close trading update on 15 December 2010, ahead of its full year results announcement on Monday 28 February 2011.

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.	Market expectations, as reported by Bloomberg prior to release of this announcement, are for 2010 adjusted profit before tax to be in the range of £59.2m to £63.0m with a weighted average of £61.2m.

Further information

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

About Senior

Senior is an international manufacturing group with operations in 11 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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