Last checked at 10 Jan 2018 07:00
Tax and Trading Update
Senior plc ("Senior" or "the Group"), an international manufacturer of high technology components and systems, principally for the worldwide aerospace, defence, land vehicles and energy markets, issues this tax and trading update for the year ended 31 December 2017 (the "Period").
Impact of new US tax legislation
Senior notes the Tax Cuts and Jobs Act ("US Tax Reform") enacted on 22 December 2017, reducing the statutory rate of US Federal corporate income tax to 21%. This is expected to give rise to an exceptional non-cash tax credit for the Group in the year ended 31 December 2017 as a result of the revaluation of US net deferred tax liabilities.
Over the medium term we anticipate the effect of the US Tax Reform to be broadly neutral for the Group as the benefit from the reduction in the US Federal corporate income tax rate is offset by a widening of the tax base.
We will continue working through and reviewing the full impact of these changes ensuing from a number of complex provisions in the new legislation.
Trading update
Senior is pleased to report that trading in the Period has been slightly ahead of previous expectations, driven by a good performance in November and December.
In addition the Group will also benefit from a one-off reduction in the effective tax rate for the year ended 31 December 2017. Subject to audit, this is anticipated to result in an adjusted tax rate of 17.5% for the Period which is 2.5 percentage points below the Group's previous expectations. The effective tax rate for 2018 is expected to revert to previous normal levels.
The Board therefore expects the Group's 2017 adjusted earnings per share(1) will also be proportionately ahead of previous expectations.
The 2017 full year results will be announced on Monday 26 February 2018.
Notes
(1) Adjusted earnings per share is before amortisation of intangible assets from acquisitions net of tax, loss on disposal net of tax and exceptional tax items.
This announcement contains insider information.
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 |
Philip Walters | Finsbury | +44 (0) 20 7251 3801 |
About Senior
Senior is an international manufacturing group with operations in 14 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.