Last checked at 9 Jul 2021 07:00
Senior plc - Post-close 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 power & energy markets, issues this trading update for the six months ended June 2021 (the "Period").
Trading Update
Trading in the Period has been ahead of management expectations.
In Aerospace, sales are expected to be modestly ahead of expectations. When compared to the equivalent period in the prior year, part of which was pre-COVID and included Senior Aerospace Connecticut for the full six months, sales in the Period are anticipated to be around 21% lower on a constant currency basis.
In Flexonics, sales in the Period are expected to be in line with our expectations, with growth of around 6% compared to prior year, on a constant currency basis. Growth from the recovery in heavy-duty truck and off-highway markets was partially offset by a decline in oil & gas and the closure of the Senior Flexonics business in Malaysia.
For the Period, Group sales are likely to be 13% lower, on a constant currency basis, than the equivalent period in the prior year, part of which was pre-COVID and also included Senior Aerospace Connecticut for the full six months.
As set out in the market update section of our 22 June 2021 announcement, the Group's end-markets are showing clear signs of recovery.
Financial Position
The Group's cash performance has been robust with a net cash inflow of £61m. Net debt at the end of June 2021 is expected to be around £71m (excluding capitalised leases of £76m), with headroom on our committed borrowing facilities increasing by £58m since December 2020 to £215m.
Outlook
Our current market assumptions for the full year 2021 are as follows:
● | Production volumes for civil aerospace will be lower in 2021 than 2020 based on the production rates that the aircraft and engine OEMs have announced. We also recognise that there are varying levels of inventory in different tiers of the supply chain. However, based on the most recent public updates from Airbus and Boeing, single-aisle production rates are expected to pick up towards the end of 2021 and into 2022. |
● | Defence markets are anticipated to remain stable. |
● | Based on independent industry forecasts, heavy-duty truck and passenger vehicle markets are expected to continue to recover in 2021. |
● | In power & energy markets, recovery in the oil & gas sector is likely to be at the end of 2021/start of 2022. |
In our 23 April 2021 trading update, we stated that we continued to expect overall Group performance to be broadly similar to 2020, prior to adjusting for the impact of the divestment of Senior Aerospace Connecticut. Despite the well-publicised headwinds associated with freight and commodity costs; semiconductor supply chain challenges for our land vehicle customers; as well as the divestment of our Senior Aerospace Connecticut business, we now expect overall Group performance for 2021 to be slightly ahead of our previous expectations.
Looking further ahead, our differentiated offering in fluid conveyance and thermal management products; our investment in low carbon and advanced manufacturing technology; our global footprint; our strong track record and commitment to the highest ESG standards; and our positioning in attractive and diverse end markets, means that the Board is confident we will make good progress as the recovery continues.
The interim results for the half-year ended 30 June 2021 will be announced on Monday 2 August 2021, where a full market and strategy update will be provided. Senior intends to host a Capital Markets Day in October 2021, the theme of which will be our fluid conveyance and thermal management strategy: further details will be provided in due course.
Notes
This announcement contains inside information.
Conference Call
There will be a call for investors and analysts at 8.30am BST today. The dial-in details are as follows:
International access number: +44 (0) 33 0551 0200
Password: Senior 2021
Further information
Bindi Foyle | Group Finance Director, Senior plc | +44 (0) 1923 714 725 |
Gulshen Patel | Director of Investor Relations, Senior plc | +44 (0) 1923 714 722 |
Richard Webster-Smith | Finsbury | +44 (0) 7796 708 551 |
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 and manufactures high technology components and systems for the principal original equipment manufacturers in the worldwide aerospace & defence, land vehicle and power & 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.