Last checked at 13 Nov 2017 07:00
Trading Update and Appointment of Chairman-Designate
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 four months from July to October 2017 (the "Period") and also announces the appointment of Ian King as the Chairman-designate.
Trading and Markets
Trading in the Period has been in line with expectations.
In the Aerospace Division, revenue increased as anticipated, driven by the production ramp up on the newer programmes such as the 737 MAX, A320neo, A350 and C Series. This was partly offset, as predicted, by reduced volumes on mature programmes such as 777, 747, A380 and the current engine versions of the 737 and A320 as well as the business jet and military sectors. The Group continued to make good progress increasing shipset content as additional contracts were secured on the key large commercial aerospace platforms. For example, we have announced today a new long-term supply contract award to Senior Aerospace STEICO, from Boeing for fluid systems products across multiple platforms.
Trading in the Flexonics Division was also as expected, including the ramp up of new off-highway programmes. We are seeing some improved activity in North American heavy-duty truck and upstream oil and gas markets, while downstream oil and gas activity, as predicted, remains subdued.
Group margins in the Period were as expected, with Aerospace Division improvements resulting from increasing revenues and operational improvements as we continue our cost reduction focus, particularly on our newer programmes.
As previously announced, the Group was in the process of closing its Aerospace BWT Ilkeston site which was due to be completed by the end of 2017. We are pleased however, to confirm that during the Period, this site was sold for £0.4m. This is a good outcome for the Group, our customers and employees of the Ilkeston site.
Outlook
As a result of the sale of the Ilkeston site, Senior will not now incur the full site closure costs. Consequently, Aerospace performance is anticipated to be slightly ahead of previous expectations.
In Flexonics, some signs of recovery are evident in our end markets and therefore we continue to believe that the end of 2017 will be an inflexion point for our truck and off-highway and upstream oil and gas facing businesses. As previously indicated, we continue to believe that Flexonics performance will be marginally lower in 2017 compared to 2016.
The Board therefore expects the Group's 2017 full year adjusted profit before tax(1) to be slightly ahead of previous expectations, at current exchange rates.
Looking further ahead, Senior expects to make progress from 2018 onwards as Aerospace production programmes ramp up and Flexonics markets recover.
The 2017 full year results will be announced on Monday 26 February 2018.
Appointment of Chairman-Designate
Senior is pleased to announce the appointment of Ian King as its Chairman-designate. Ian brings extensive experience of the aerospace and defence sector and possesses the right skills, industry experience and values to lead the Board through the next phase of the Group's development.
Ian will join the Board as a non-executive Director on 13 November 2017, with the intention of taking over as Chairman from Charles Berry when he retires from the Board, as previously announced, at the conclusion of the Group's next Annual General Meeting in April 2018.
Ian King is a non-executive Director of Schroders plc, having been appointed to its Board on 1 January 2017, lead non-executive Director of the Department for Transport, and is a senior advisor to the Board of Gleacher Shacklock LLP. Ian was Chief Executive of BAE Systems plc from September 2008 until June 2017, having been originally appointed to its Board as Chief Operating Officer, UK and Rest of the World in 2007. He also served as a non-executive Director and senior independent Director of Rotork plc until June 2014.
No further information is required to be disclosed pursuant to Listing Rule 9.6.13R.
Conference Call
There will be a call for investors and analysts at 8.30am GMT 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 loss on disposal of business and amortisation of intangible assets arising on acquisitions.
Further information
David Squires | Group Chief Executive, Senior plc | +44 (0) 1923 714 738 |
Bindi Foyle | Group Finance Director, 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.