SNR (Guardian Stockbrokers report)22 Oct 2012 16:35
Senior Plc (SNR.L) Announced in its interim management statement for the period since 1 July 2012, that overall trading was positive during the period 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 of £68 million being £25 million lower than at the start of the year. The large commercial aircraft market, which accounts for half of the Aerospace Division's revenue, remains healthy, with Airbus and Boeing delivering a combined 841 aircraft in the first nine months of 2012. This represents an increase of 16% over the 723 aircraft delivered in the same period of 2011. 23 Boeing 787 aircraft have been delivered this year compared to one in the first nine months of 2011, with Boeing remaining confident of increasing production to ten 787 aircraft per month towards the end of 2013. Airbus and Boeing's combined year-to-date net order intake of 1,191aircraft (nine months 2011: 1,464 aircraft) was again well in excess of deliveries and their resultant order books, in excess of seven years at current build rates, continue to provide a strong foundation for future growth. Elsewhere in the Aerospace Division, demand for regional and business jets remained broadly stable with Senior's activity increasingly focused on supporting future programmes such as Bombardier's CSeries 110 to 130 seat passenger aircraft, Bombardier's L85 business jet and the Mitsubishi Regional Jet. Increased engineering resources are also being directed towards the new single-aisle Airbus 320neo and Boeing 737Max passenger aircraft, both representing more efficient derivatives of existing best-selling aircraft which are due to enter into service in a few years time. Unsurprisingly, given Governmental budgetary constraints, the level of shipments for some of the Group's military & defence programmes, such as the Black Hawk helicopter, eased down during the period and the outlook for other programmes, such as the C130J military transport aircraft, began to soften. The Flexonics Division delivered a strong profit performance in the period, despite weaker demand in its principal land vehicle markets in Europe and North America, as a result of lower material costs (principally stainless-steel), a healthy level and advantageous mix of non-European industrial sales and a continued focus on efficiency improvements. With market conditions largely as anticipated, although increasingly challenging in some areas, the Board continues to expect 2012 adjusted profit before tax to be in line with its previous expectations. Assuming no further deterioration in market conditions, the Board believes the Group is positioned to make further progress in 2013 and beyond.
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