Parts supplier Senior (SNR) continued to benefit from the commercial aerospace boom during the first half. Its automotive and industrial division grew, too. Strip out one-off items, including a £12.9m write-down at business jet unit Capo Industries, and underlying operating profit rose 5 per cent to £53.3m. However, big plane manufacturers are negotiating harder on prices and the company admits margins will come under pressure. With headwinds elsewhere, growth won't be quite so spectacular this year.
Chief executive Mark Rollins plays down the pricing issue as "nothing dramatic". It's not the first time Senior has mentioned it, either. These are long-standing issues for the aerospace industry and things tend not to happen overnight. Further efficiencies and a degree of resistance from suppliers should mitigate some of the impact, too, says Mr Rollins. Still, despite double-digit growth in large commercial aircraft work - 34 per cent of group sales - aerospace profit fell slightly to £36.8m, dragged lower by weaker defence revenue and £1.4m of extra costs. Still, the Flexonics automotive division made £20.6m - up 16 per cent - although half came from November's acquisition of GA Precision where margins are lower, and the rest from various cost benefits.
Broker N+1 Singer expects full-year adjusted pre-tax profit of £100.1m, giving adjusted EPS of 18.1p (from £91.1m and 17.3p in 2012).
SENIOR (SNR) | ||||
|---|---|---|---|---|
| ORD PRICE: | 266p | MARKET VALUE: | £1.11bn | |
| TOUCH: | 266-268p | 12-MONTH HIGH: | 288p | Low: 186p |
| DIVIDEND YIELD: | 1.8% | PE RATIO: | 16 | |
| NET ASSET VALUE: | 84p* | NET DEBT: | 19% | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 366 | 43.2 | 8.17 | 1.38 |
| 2013 | 399 | 37.1 | 8.04 | 1.52 |
| % change | +9 | -14 | -2 | +10 |
Ex-div: 23 Oct Payment: 29 Nov *Includes intangible assets of £237m, or 57p a share | ||||
