Last checked at 17 Dec 2009 07:00
Senior plc
Trading 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 energy markets, issues this trading update ahead of its financial year-end on 31 December.
Trading
The positive trends reported in the Interim Management Statement on 19 October 2009 have continued, with adjusted profit before tax(1) being slightly ahead of the Board's expectations in both October and November. This was largely due to a stronger performance from the Flexonics Division and the ongoing benefits of cost reduction measures implemented in late 2008 and early 2009. Cash generation has remained strong, with net debt of £108.8m at the end of November being well below the £174.5m at the start of the year.
Markets and Operations
Senior operates through two Divisions: Aerospace (61% of H1 2009 Group sales) and Flexonics (39% of H1 Group sales).
In the Aerospace Division, the trends seen in the third quarter have continued as anticipated, with production of large commercial aircraft remaining strong but the regional jet and business jet markets weakening further. The Group's principal defence programmes have remained healthy and, last week, the Airbus A400M military transport plane flew for the first time. More importantly, given the significant content that the Group has on the aircraft, the Boeing 787 made its maiden flight on Tuesday of this week. Delivery of this aircraft to customers is scheduled to commence before the end of 2010.
Trading has been better than expected for the Flexonics Division in recent months. Previously reported increases in passenger vehicle demand have been sustained, driven principally by short-term Government incentive programmes and very strong demand for the production of North America commercial vehicle engines, ahead of tighter emission regulations coming into force on 1st January 2010. Industrial markets have remained relatively robust, with the Group's sales and orders of large expansion joints holding up better than expected.
Outlook
As a result of this stronger than expected performance, the Group's adjusted profit before tax(1) for the full year 2009 is anticipated to be slightly ahead of current market expectations(2). After making a further voluntary payment into the Group's UK final salary pension scheme in December, year-end net debt is expected to be at a similar level to that at the end of November.
Looking ahead, the Group's markets are showing some signs of stability, although the first quarter of 2010 is expected to see lower production volumes in the North American commercial vehicle engine market following the strong performance in the final quarter of 2009. Some industry commentators, but not the manufacturers themselves, are also anticipating a reduction in the build rates of narrow-bodied aircraft during the second half of 2010. In the medium to longer-term, the Group is expected to benefit from the significant content it has on the Boeing 787, Bombardier 'C Series' and Joint Strike Fighter programmes, as well as from the growing need for environmental solutions in the land vehicle and energy markets. Senior is strongly cash generative, financed for the long term and well positioned to benefit from the diversity of the markets in which it participates. Consequently, the prospects for the Group remain encouraging.
The preliminary announcement of the Group's 2009 Final Results is scheduled for Monday 1st March 2010.
| (1) | Adjusted profit before tax is that before loss/profit on sale of fixed assets and amortisation of intangible assets arising on acquisitions. |
| (2) | Market consensus, as reported by Bloomberg prior to release of this announcement, is for 2009 adjusted profit before tax of £43.7m. |
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 |
| Clare Hunt | 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, 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.