Last checked at 20 Oct 2016 07:00
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 for the nine months ended 30 September 2016.
Group Performance for the Nine Months ended 30 September 2016
Group revenue for the nine months ended 30 September 2016 increased by 7% to £682.2m (2015: £638.0m). This included a favourable exchange rate impact of £48.0m and a beneficial incremental impact from acquisitions of £26.1m. Underlying Group revenue from organic operations was down 4% on a constant currency basis as growth from the Aerospace Division (up 2%) was offset by lower Flexonics revenue (down 18%) due to weaker truck and off-highway, and oil and gas markets.
Adjusted profit before tax(1) decreased by 18% to £58.5m (2015: £71.6m).
Net debt at the end of September was £222.7m, as expected this was higher than at the end of June due to an anticipated increase in working capital, continued investment in capital expenditure in support of organic growth, as well as adverse currency impacts.
Third Quarter Performance: Markets & Divisions
In the Aerospace Division, activity in the large commercial aircraft and regional jet markets increased with the ramp-up in production of the A320neo, A350 and CSeries, albeit as we progressed through the third quarter, as widely reported, the increase was slower than previously anticipated. Activity in the business jet market continued to decline.
As previously reported, bid activity for new business remains high and important wins were secured in the third quarter for our Structures business on the 777X and A320neo; however, the performance of the Aerospace Division in the third quarter was below expectations due to slower than anticipated ramp-up of new production programmes. The Division's performance has also been impacted by certain supplier issues which have impacted some of our US and UK operations. These issues are currently being addressed and are largely expected to be resolved by the end of the year. Further, the Division has also been affected by some programme specific price increase discussions not yet concluding and discussions are continuing with customers to bring these to resolution.
Activity in the Flexonics Division continued to reflect the challenging market conditions in truck and off-highway and oil and gas markets. In particular, activity and the outlook for North American heavy truck production worsened in the third quarter, resulting in a further deterioration in the Division's performance. The Flexonics Division continues to focus on short-term cost management actions and good progress has been made in the third quarter with projects to transfer production to new facilities in cost competitive countries.
Outlook
Whilst the Board anticipates some improvement in the fourth quarter over the third quarter, the Group's performance for the full year 2016 is expected to be lower than previously anticipated.
Looking further ahead, the Group remains well positioned for the future with Aerospace production programmes continuing to ramp-up and many new business opportunities in discussion with key customers. In Flexonics, despite the challenging conditions, we have continued to secure positions on new programmes and platforms, and therefore are well positioned to resume growth when markets recover.
The 2016 full year results will be announced on Monday 27 February 2017.
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)20 3003 2666
UK toll free number: 0808 109 0700
Password: Senior
Notes
(1) | Adjusted profit before tax is before amortisation of intangible assets arising on acquisitions, acquisition costs and profit or loss on sale and write-down of fixed assets. |
Further information
Derek Harding | Group Finance Director, Senior plc | +44 (0) 1923 714 722 |
Bindi Foyle | Director of Investor Relations & Corporate Communications, Senior plc | +44 (0) 1923 714 725 |
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.