Set against weakness in the European automotive market and delays to Boeing's (BO.) 787 aircraft over safety concerns, results for aircraft and automotive engineer Senior (SNR) were solid enough to push the shares to a record high. The group's ability to generate cash by controlling working capital costs meant Senior generated higher free cash flow of £57.6m, which had a significant effect on cutting debt, as well as supporting plans to expand its civilian aerospace arm.
Build rates for civilian aircraft continued to rise last year with Boeing, Senior's biggest aerospace customer, delivering 46 787 Dreamliners before safety concerns grounded the fleet. However, build rates were maintained and translated directly into higher profits for Senior, helping offset a weaker defence market - excluding acquisitions, divisional operating profits rose by 10 per cent on sales up 7 per cent. The Flexonics business segment experienced weak markets in Europe, in particular, but cheaper raw materials and better growth in the US truck market meant operating profits here rose by 12 per cent to £37.3m.
Chief executive Mark Rollins said defence sales would be 10 per cent lower in 2013, but that this would not have an overall effect on the aerospace division. He expects capital expenditure this year of £35m-£40m as Senior rolls out its new plant, well above the £26m spent in 2012.
Investec expects to nudge up 2013's EPS estimate of 18p by 2-3 per cent (from 17.3p in 2012).
SENIOR (SNR) | ||||
|---|---|---|---|---|
| ORD PRICE: | 229p | MARKET VALUE: | £948m | |
| TOUCH: | 227-229p | 12-MONTH HIGH: | 229p | LOW: 170p |
| DIVIDEND YIELD: | 2.0% | PE RATIO: | 14 | |
| NET ASSET VALUE: | 76p* | NET DEBT: | 23% | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2008 | 562 | 51.3 | 9.9 | 2.60 |
| 2009 | 540 | 49.6 | 9.8 | 2.60 |
| 2010 | 567 | 52.1 | 10.1 | 3.12 |
| 2011 | 622 | 71.7 | 13.4 | 3.80 |
| 2012 | 712 | 83.4 | 16.3 | 4.65 |
| % change | +14 | +16 | +22 | +22 |
Ex-div: 01 May Payment: 31 May *Includes intangible assets of £239m, or 58p a share | ||||
