Last checked at 30 Jun 2008 07:00
Senior plc
Pre-Close Period Statement
Senior plc ("Senior" or "the Group"), an international manufacturer of high technology components and systems, principally for the aerospace, diesel-engine and energy markets, issues this trading update for the six month period to 30 June 2008.
The Group continues to trade strongly, with trading conditions being better than expected during the second quarter. Consequently, the Group's adjusted profit before tax, for the first six months of 2008, is now expected to be comfortably ahead of the Board's previous expectations. Cash generation has been healthy, with net debt falling ahead of expectations during the second quarter, from the £142m previously reported at the end of March.
Aerospace
As anticipated, strong markets, operational improvements and the contribution, for the first time, of Absolute Manufacturing (acquired December 2007) and Capo Industries (acquired January 2008) mean operating profits for the Aerospace Division are expected to be significantly higher for the first six months of 2008 than in the first half of 2007.
Demand for new wide-bodied commercial aircraft, (43% of Aerospace Divisional sales) has remained strong, particularly from airlines based in the Middle East and Asia. Boeing and Airbus reported a combined net order intake of 848 aircraft for the five months to May, more than twice the level of deliveries during the period (396 aircraft). Accordingly, their combined order book grew to 7,300 aircraft at the end of May 2008 from 6,848 aircraft at the end of December 2007. Further, during the middle of this month, Boeing announced that they had achieved the key programme milestone of "power on" for their new 787 aeroplane, the fastest selling new commercial aircraft in history. With around 900 aircraft already ordered, and a sales content of over £400k per aircraft, Senior is well placed to benefit when deliveries to customers start in late 2009.
Markets for smaller commercial aircraft (21% of divisional sales) have also been strong, particularly the market for business jets, with many manufacturers reporting record order books and increasing build rates. Military and defence markets have continued to operate at satisfactory levels.
Flexonics
In the second quarter, the Flexonics Division experienced trading ahead of the Board's previous expectations. This was principally due to the strength of the global energy and chemical processing markets, as well as the operational improvements made in manufacturing the Group's North American heavy duty diesel-engine products. As a result, the Division's operating margin for the first half of 2008 is expected to be above 10.0%, a marked improvement over the prior year (H1 2007: 7.1%). Whilst the high price of fuel is adversely affecting the total demand for new passenger vehicles, particularly in North America, the resultant trend away from larger vehicles, such as SUV's and pick-up trucks, to smaller more fuel-efficient vehicles benefits the Group, as Senior's sales content is much higher on this latter product group.
Outlook
The Group's outlook remains healthy. Aircraft build rates continue to increase as a result of record order books and new programme introductions, such as the A380 and B787. Energy markets remain strong and tightening emission legislation is providing good opportunities for Senior's products.
The results for the six-month period to 30 June 2008 will be announced on Monday 4 August 2008.
Further information
Mark Rollins Group Chief Executive, Senior plc +44 (0) 1923 714738 Simon Nicholls Group Finance Director, Senior plc +44 (0) 1923 714722
Adrian Howard PR advisor, 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 5,800 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.