Interim Management Statement

RNS Number : 9166Q

Senior PLC

21 October 2013

 



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 2013 (the "Period").

Trading and Financial Position

The Group's adjusted profit before tax⁽¹⁾ in the Period was in line with the Board's expectations.  Cash generation remained healthy, with net debt at the end of September, of £61m, being £10m lower than at the start of the year.

Markets and Operations

Senior operates through two Divisions: Aerospace (64% of H1 2013 Group sales) and Flexonics (36% of H1 2013 Group sales).

In the Aerospace Division, the large commercial aircraft market, which accounts for just over half of the Aerospace Division's revenue, remained healthy, with Airbus and Boeing delivering a combined 921 aircraft in the first nine months of 2013.  This represents an increase of nearly 10% over the 841 aircraft delivered in the same period of 2012.  40 Boeing 787 aircraft were delivered in the first nine months of 2013 compared to 23 in the same period last year, with Boeing remaining confident of increasing production to ten 787 aircraft per month in the first quarter of 2014.  Airbus and Boeing's combined year-to-date net order intake of 1,952 aircraft (nine months 2012: 1,191 aircraft) was twice the number of deliveries.  Their resultant order books, in excess of eight years at current build rates, continue to provide a very strong foundation for future growth.  The Airbus A350, one of the key aircraft for the future, flew for the first time in June and has now successfully completed over 10% of its test programme.  Senior increased its content on the A350 in the period.  Customer price pressure in the commercial aerospace sector, which was reported in the Half Year Results announcement, remains on-going and is being managed in line with expectations.

Elsewhere in the Aerospace Division, two key milestones were reached in September, with the Bombardier CSeries 110 to 130 seat passenger aircraft flying for the first time and the Airbus A400M military transporter being delivered to its first customer, the French Army.  These are both potentially important future programmes for Senior.  As expected, overall market conditions for business and regional jets remained relatively weak in the Period, whilst reduced Government spending and political indecision, particularly in North America, continued to impact the Group's military and defence volumes.  To-date, these impacts have been largely as planned and have been appropriately managed, with the Group's North American operation that supplies Sikorsky with Black Hawk helicopter parts most affected.

The Flexonics Division benefited from an advantageous mix of non-European industrial sales in the Period.  In addition, the Group's long-time focus on efficiency improvements, and customer diversification, resulted in a reduction in the losses of the Group's French automotive business.  However, the Division was impacted by weaker demand in the North American heavy-duty diesel engine market, where customer destocking took place in the Period as the anticipated market recovery did not materialise.  Continuing weakness was also seen in demand for passenger vehicles in Europe and India.  Testing of the Group's Exhaust Gas Recycling product continues for a number of new customers, mostly for potential introduction in 2016, when emission legislation is scheduled to tighten further.

Outlook

Given the financial performance of the first nine months of the year and the current levels of activity, the Board expects 2013 adjusted profit before tax⁽¹⁾ to be in line with its previous expectations, assuming no further deterioration in exchange rates.  With the commercial aerospace sector continuing to grow at a healthy rate and land vehicle markets anticipated by industry commentators to start to recover in the coming months, the Board believes the Group is well positioned to make further progress in 2014 and beyond.

Other

On Wednesday 23 October 2013, Senior is hosting a capital markets event at its Senior Aerospace Weston facility in Lancashire, UK, for investors and analysts.  The event will include a site tour and presentations by Operational and Divisional management focussing on Weston and the Group's Aerospace Fluid Systems Division.  There will be no further update given on current trading.

The Group intends to announce its 2013 full year results on Monday 3 March 2014.

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

Further information

Mark Rollins	Group Chief Executive, Senior plc	[phone]
Derek Harding	Group Finance Director, Senior plc	[phone]
Philip Walters	RLM 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 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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