Last checked at 25 Oct 2011 07:00
Senior plc
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 2011 (the "period").
Trading and Financial Position
Trading during the period was healthy, continuing the performance seen in the first half of the year, 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 being below the £62.9m reported at the end of June. During the period, a new £60m revolving credit facility was put in place. The facility matures in 2016 and is currently undrawn.
Markets and Operations
Senior operates through two Divisions: Aerospace (60% of H1 2011 Group sales) and Flexonics (40% of H1 2011 Group sales). Overall, market conditions in the period were broadly as anticipated at the time of the Half Year Results announcement in early August.
Within the Aerospace Division's principal market, production of large commercial aircraft continued at healthy levels with Boeing and Airbus delivering a combined 723 aircraft in the first nine months of 2011 (nine months 2010: 726 aircraft). Their combined YTD net order intake of 1,464 aircraft (nine months 2010: 720 aircraft) was very strong, partially as a result of the recent decisions taken by Airbus and Boeing to put new, more fuel efficient, engines on their narrow bodied platforms in four or five years' time. Their resultant seven to eight year order books, at current build rates, bode well for the future. Importantly, the initial customer delivery of the Boeing 787 aircraft, a key future programme for Senior, took place in September and the initial delivery of the new Boeing 747-8 was made in October. Elsewhere in the Aerospace Division, build rates for the Group's main defence programmes, such as the Black Hawk helicopter and C130J military transport aircraft, remained strong despite increasing Governmental budgetary constraints. However, as anticipated, the regional and business jet markets, which are less important to Senior, remained weak, with Bombardier announcing build-rate reductions for its regional jets starting in early 2012.
The Flexonics Division performed well, and broadly as anticipated, in the period. In the land vehicle markets, increased production of heavy trucks, particularly in North America, helped offset a softening in demand for non-premium passenger vehicles in Europe and latterly Brazil. In the industrial markets, the strength of the Group's German operation and healthy emergency repair work for the Group's expansion joint business in Texas mitigated the effects of the slower than anticipated implementation of emission legislation in North America for coal-fired power stations. Looking forward, a solid order in-take in the period for the Group's industrial businesses helps underpin the anticipated performance for 2012.
The Board
After ten years on the Board of Senior, and over four years as its Chairman, Martin Clark has indicated his intention to retire from the Board at the next Annual General Meeting, in April 2012. During his tenure as Chairman, Senior has made significant progress and the Board would like to extend its thanks to Martin for his strong leadership and dedicated service on behalf of Senior over the years and to wish him well for the future. External recruitment has now commenced for a new Chairman.
Outlook
Whilst macroeconomic uncertainty has increased in the past few months, Senior has not seen any material change in underlying order trends since the end of June. The Group continues to perform strongly with Senior's most important end market, the large commercial aircraft industry, anticipating a long-term period of healthy growth. Consequently, the Board expects 2011 adjusted profit before tax(1) to be in line with its previous expectations and, assuming anticipated market conditions prevail, believes the Group remains well positioned for further progress in 2012 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 Aerospace Structures Division and the large commercial aircraft market. There will be no further update on current trading. In addition, the Group intends to issue a pre-close trading update on Thursday 15 December 2011, ahead of its full year results announcement on Monday 27 February 2012.
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 | +44 (0) 1923 714 738 |
Simon Nicholls | Group Finance Director, Senior plc | +44 (0) 1923 714 722 |
Philip Walters | RLM Finsbury Group | +44 (0) 20 7251 3801 |
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, diesel-engine, exhaust system and energy markets. It employs over 5,300 people worldwide. 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.