A reversal in components and systems manufacturer Senior's (SNR) fortunes, as envisaged in our January buy call, is unlikely to materialise on the back of these latest full-year figures. Although revenue linked to commercial aerospace give cause for encouragement, if you strip out the previous accounting period's impairments, adjusted operating profit was down 28 per cent at constant currencies. Strong free cash flows, although down a little on 2015, facilitated another rise in the full-year dividend. But defence business - where organic revenue was down 10 per cent - took the gloss off proceedings.
Increased sales of the Airbus A350 and A320neo models outweighed the continuing decline in production numbers for Boeing's 747, but with further rationalisation costs expected, year-end aerospace divisional performance is expected to be "broadly in line" with these results.
End-markets remained challenging through much of last year, with Senior's Flexonics business - which makes fuel tubes, exhaust products and other components - struggling in the face of a slack US heavy truck market and lower oil and gas expenditure. Management anticipates "late 2017 should be an inflexion point" for Flexonics before truck and off-highway markets recover the following year.
Prior to these figures, Canaccord Genuity was expecting 2017 cash profit of £127m, leading to adjusted EPS of 15.7p, rising to £139m and 18p in 2018.
| SENIOR (SNR) | ||||
|---|---|---|---|---|
| ORD PRICE: | 179p | MARKET VALUE: | £750m | |
| TOUCH: | 178.8-179.1p | 12-MONTH HIGH: | 245p | LOW: 161p |
| DIVIDEND YIELD: | 3.7% | PE RATIO: | 16 | |
| NET ASSET VALUE: | 119p* | NET DEBT: | 40% | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 712 | 83.4 | 16.3 | 4.65 |
| 2013 | 775 | 83.8 | 17.2 | 5.12 |
| 2014 | 821 | 80.6 | 15.3 | 5.63 |
| 2015 | 850 | 63.8 | 11.6 | 6.20 |
| 2016 | 917 | 55.5 | 10.8 | 6.57 |
| % change | +8 | -13 | -6 | +6 |
Ex-div: 27 Apr Payment: 26 May *Includes intangible assets of £379m, or 90p a share | ||||
